The Decline & Fall Of Capitalism… With A Whimper

“The vicissitudes of fortune, which spares neither man nor the proudest of his works, which buries empires and cities in a common grave.”

As a difficult 1st Quarter-End approaches, markets look fraught, but so do the fundamentals of the Western Free Market Economies – Capitalism needs maintenance and repair work on dishonest politics, immoral companies and broken bureaucracies.

An interesting week’s play in prospect here in the global capital markets. Quarter-end coming up and the pain in the bond market will be causing more than a few WTF moments. If you need help shifting the unshiftable illiquid asset you were assured was more liquid than the Nile, then give me a shout. Difficult is what we do! If you’d been reading the Porridge – you would have known what was coming. The mood is turning distinctly bearish.

Excellent. Check your buying boots still fit.. when markets wobble it means the buy moment is coming.

After reading a headline about the end of an 800-year Treasury bull-run  (!?!)– trying to source pre-Columbus Fed Data must have been fun – I will be writing about what the current unravelling of the bond markets is really telling us – later this week! But first… I shall rant about the Decline and Fall of Capital this morning – see below.

The world is diverging. It feels like the western economy (note – not necessarily the global one), is caught in an inflationary gyre that is likely to get worse. Rates and inflation mean bonds are going to underperform massively, credit is going to take a pasting, and equities are so inflated by the effects of ultralow interest rates that they will also struggle. Markets are switching from the credulous belief in the “everything” that fuelled the tech bubble, to a much more defensive “show-me-the-money” fundamentals stance.

On the back of such a bearish assessment you will not doubt be expecting words of wisdom on what to buy. Really??? I’m still trying to work that out as the value of real assets in a stagflationary market might be. For instance – how do you recommend residential housing as a value safe when prices have never been so high relative to earnings? Or what about commodities – if only I knew…- READ MORE