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Blain’s Morning Porridge – March 20 March 20 20! Missed than one!

Blain’s Morning Porridge – March 20 March 20 20! Missed than one!

“How beauteous mankind is! O brave new world that has such people in it..”

This is a very strange world we find ourselves in. 

There is literally too much to write about in terms of how the Global Financial System is being roiled by the Coronavirus. It feels like everything I’ve ranted about over the last 12 years in the Morning Porridge is coming to roost. Another emergency rate cut. QE infinity plus 1. Oil prices everywhere. Massive

failure – Boeing is a great example: begging a bailout after years of greed and mismanagement, stock buybacks and failing to innovate better product – to the counter-intuitive assets moves we’ve seen in Gold and Government bonds. The credit markets are in lockdown and the bubble is blown on stocks. 

I’m convinced we are at the beginning of a chaotic reconstruction of markets rather than passing through a simple predictable correction to the current order. If you don’t think so, can I interest you in this basket of junk bonds going chirpy chirpy cheep cheep? (Corporate Bonds are going to really, really hurt. Lots.)

The big shifts in safe haven assets like government bonds and gold getting cheaper illustrate how we’re still in the first phase – when investors cover losses selling liquid assets. We’d don’t need to overly worry about government bonds: they will revert higher, fuelled by renewed flight to quality, and by the massive new QE programmes. Gilts and Bonds will trend through zero yields. But, what if the evil uncle, Inflation, turns up unexpectedly at the new world party? He may well do…

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Olduvai IV: Courage
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Olduvai II: Exodus
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