The FTSE 100 is at a record high this morning:
War. Oil shortages. The risk of recession. Climate breakdown. None of those matter apparently. All is hunky dory according to the London Stock Exchange.
This time it is different, they will all be telling themselves.
Time for this, I think:
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With (unelected) LabourLink/Labour Together advisers now packing Downing St. and uber-Zionist (Gentile) Ian Austen appointed as a trade envoy to Israel, this Burnham administration seems indistinguishable from the Starmer one. Like Ernie Wise’s toupe, I can’t see the join.
Or is it trade shifting to the what may be considered a more ‘resilient’ FTSE because of angst re AI going out of control and possibility of the AI bubble imploding, US interest rate rise worries, and ongoing geopolitics that is causing the “tech heavy” US stock markets to fall, and investors hedging their bets elsewhere?
A big gamble?!
A different story in Asia, where the first signs of the AI bubble bursting are starting to come through:
https://futurism.com/future-society/south-korea-stock-panic-kopsi-kosdaq-circuit-breaker
Add to this the estimated $1.6TRN of AI related debt currently being “hidden” through off balance sheet SPVs by the likes of Oracle and Microsoft along with their non-existent AI profits and negative unit economics (new customers increase costs rather than reduce them), things could get sticky very quickly.
https://futurism.com/artificial-intelligence/ai-companies-hide-debt-off-balance-sheet
Taking this into account and the likes of Musk, Ellison, Zuckerberg and Bezos, perhaps “Scary Monsters (and Super Creeps)” or “The Man Who Sold The World” are more apt!
Seemed a good day to sell most of my pension portfolio. Hope they are all as wrong as I think they are.
🙂
Don’t forget that today is also Earth Overshoot Day.
So remarkably 7 days later than last year!
This trend will surely continue because, as we all know, this day is closely linked to the stock market which will only ever go up.
And so in only 23 years we will even need less resources than in 1970!
So why bother about oil-shortages at all?
What an absolutely realistic possibility.
Yeah, we also could invest in Green New Deals, Diplomacy and such stuff that promise these things as well.
But, naaahh, that demands effort.
Just sitting it out will do nicely!
Meanwhile, the Bank of England is worried about second round inflation effects (basically wages catching up with price rises). It maintains the charade that higher interest rates are necessary to target inflation and for the good of the country.
Meanwhile, the G20 tables show all but one of the countries with a lower inflation rate have a lower interest rate as well, while all but one of the countries with a higher inflation rate have a higher interest rate. If you were to consider the implied correlation there, it would not be the inverse one the Bank of England uses to call for higher interest rates to combat inflation.
You might therefore conclude that the Bank of England is just as unwilling to recognise that there are significant downside risks to the economy, chiefly caused by external factors, and that the sensible thing to do is to support British households and businesses so that they are prepared for the eventual fall-out, not squeezed further in advance of it.
Agreed
A little off topic but worth sharing, The revolving door from government/ quangos to private enterprise and negligent mismanagement of public funds. Legislation was proposed but never enacted. Other countries have safeguards. Lots of examples :
How corruption became legal in Britian
https://chriscollins756.substack.com/p/how-corruption-became-legal-in-britain
Thank you
Mr Dalglish, the article you linked to is brilliant. As I read it I realised that the quangos that are responsible for 1/3rd of gov spending are the mechanism to allow tory &LINO govs to privatise gov services & systems – whilst claiming “hands-off”. The tories used to talk about abolishing quangos – they meant exactly the reverse.
I recommend any & all to read the article.
Absolutely agree, thank you for sharing this superb article, Mr Daglish.
“How are you going to pay for it”? Well, sort this level of corruption out, for starters!!
The sooner this becomes part of the mainstream discourse on funding, the better.
I recommend any and all to read the article.
How Corruption Became Legal in Britain
Thanks
Good choice of music!
I see that Lloyds Banking Group announced a £1bn share buyback today. What effect does that have on the FTSE index
a) very slight down
b) no change
c) very slight uptick in the index.
I read the investing for dummies book once and there’s a chapter that suggests that buybacks are a symptom of decline for there are no more opportunities to invest in with the same money. I wonder if the government makes it more difficult to create investment opportunities than before, Devon having a brilliant furniture maker being banned from benefitting the local freeport status because it’s non-maritime coming to recent mind.
They provide suppport for the share price.
And indicate either excess profits or a lack of imagination.
My question was not about the share price. It was about whether there was a small effect on the FTSE index.
Yes, because the index reflects the share price
-All is for the best in the best of all worlds’ is the panglossian approach of the financial world. Who can blame them?
Surely these pantaloons do not take themselves seriously, and now look upon the world as completely unpredictable. A major change from craving certainty. I fancy they have decided to carry on speculating because any downside might well reduce their wealth, but they will not be sleeping on park benches any time soon.
There used to be real fear in these markets and I really don’t know where it has gone. Who cares? – the rest of us.
Excellent Bowie album, that and Ziggy Stardust are my go to albums in troubling times.
Just reading a good report by the Balanced Econonmy Project called Too Big To Cool The Planet, which lays a lot of our current woes at the feet of Big Finance:
https://www.balancedeconomy.org/latest/big-financial-power-global-warming
No doubt therse big players will find a way to profit from a crash by buying up all the devastated businesses at bargain prices.