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Blain’s Morning Porridge, October 1st, 2026

“No one ever won a war by dying for his country. He won it by making the other dumb fellow die for his country.”

Defence has become the hot new sector, but investors need to understand the geopolitical reality, military requirements, the need for adaptation, and how the battlespace is changing. Defence needs to connect capital to warfighting capabilities that can be deployed now, adapted swiftly, and manufactured in unprecedented volume. The most effective way for the West to win is to demonstrate the will and ability to do so – which is the most likely way to deter our enemies from attacking. 

Key Takeways

·      The goal of defence spending is deterrence. Wars are economic disasters. But if you need to fight – fight fast and effectively.

·      Defence investment was a backwater for decades, requiring an understanding  of how cost-plus margins translated into stock market value. Today defence valuations are based on a swift evolving battlespace, the capacity to deliver good-enough but effective and adaptable munitions, sensors, coms and connectivity in volume now! Defence investment has utterly changed.

·      Ukraine has demonstrated the need for continuous adaptation as combat swiftly evolves. Testing, deploying and improving weapons faster than the enemy is critical.

·      Conflict risks have risen because the global economy is changing, and the current hegemonic struggle between the US and China is key.

·      National Resilience is as much part of defence as new weapons – and is highly vulnerable to disinformation and sabotage.

·      Defence should not be measured in terms of GDP, but in terms of combat effectiveness and resilience.

·      Spending on defence needs to plan for the long-term, and support sufficient forces and to anticipate how swiftly war stocks will be depleted. The current US shortages of sophisticated munitions highlight how a capability gap on side opens opportunities for the other side.

While doing my day-job raising capital for Spitfire Strategic Capital I’ve seen just how quickly defence has become a hot sector. The market has woken up – making the connection between rising conflict risks, increased defence spending, and therefore, the valuation of anything defence related. 

It’s much more complex and nuanced than that.

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Blain’s Morning Porridge 30th, September 2026

“There is a big difference between presenting a plan and then executing it.”

What should markets be thinking about Andy Burnham’s conference speech yesterday? Gilts look to be giving him the benefit of doubt. Good in parts? He spoke well, proposed some positive policies and ideas, and gave an impression of a confident, positive politician set to deliver. The real issue isn’t just can Labour hold the nation steady and reverse years of negativity and low growth, but can any of the other parties do any better given the constrained state of the national finances?

Key Takeaways:

• Andy Burnham has offered a credible political programme that didn’t scare the horses or the Bond market. The perception of the UK’s credit in bond markets required confidence and competence – which was delivered. Now they wait for execution.
• Burnham’s appeal is not universally attractive, but on a relative basis the party is betting he’s a better choice than the alternative for the Gilts Market and the electorate; Reform and Farage.
• Labour has already wasted half its parliamentary life under Starmer – Burnham has to persuade voters he can deliver his promises post next-election. (He’s said he won’t call an early election – making it distinctly possible he will.)
• His policies on care, housing, privatisation and Europe are positive, but there was nothing on creating growth, resilience and defence – which shows a lack of connective thinking.
• The UK’s political and fiscal credibility remains very much tied to keeping the bond market happy through adherence to the rules and restraining spending. The big challenge will be selling tax-rises to the electorate – they aren’t alternatives.
• Stability is not nailed on. There is a significant risk that Labour MPs mutiny over tax, pensions and any welfare cuts.

What should the markets be making of UK Premier Andy Burnham’s speech to the Labour Party Conference, setting out his stall and vison for Britain yesterday? Confidence is everything, and Burnham wields it with… aplomb. The Gilts market didn’t scream in horror or run away. The 10-year was marginally weaker on the day, but stronger post his comments – which came even as stalled negotiations on Iran pushed oil higher and fears of a US export ban on Diesel hangs over higher inflation.

You can tell Burnham scored big points in the great game of UK Politics. As evidence take a look at the Torygraph IMF Reference Index for strongest signal of how good the speech was.

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Blain’s Morning Porridge Sept 29th 2026

“La, La, La… We can’t hear you… We’re not listening…”

Markets are worrying about a short-term interest-rate/inflation triggered correction, but something deeper may be approaching – a convergence between market, economic and political failures. It may be time to hedge against consensus expectations of “it will all be fine” and focus on factors like national resilience in terms of what nations thrive and which won’t!

Key Takeaways

• Markets appear to be heading into risk-off territory as expectations are scaled back by inflation and rates. However, the crisis may be deeper than expected, not just around market expectations, but politics and society also.
• Political disappointment and rising social fears are feeding populism – which is why the hard-right populists are on the ascendant in Europe. Trump shows how it’s likely to work out - badly.
• Trump is not the problem – he’s a symptom of what’s wrong with economics and politics.
• Economic stability depended on alignment between consumers and producers under democratic free-market capitalism. That’s breaking down as income and opportunities equality diminishes, and politics runs out of money to fix decaying economies.
• The crisis, when it comes, may be much more significant than just a price corrective move in markets.

Sorry I did not get a Monday Morning Comment out y’day – early train to London, and then straight into a Defence conference. Thus, this morning’s Porridge has a Monday morning feel to it as some of the stuff I was thinking about yesterday has made the cut this morning.

I am increasingly convinced it’s time to position for the risk-off. My spidey-senses are all a tingle. My reasoning is the increasing disconnect between short-term political cycles, a market focused on the here and now, and long-term social changes. This is what political philosophy is all about – connecting all the strands.

• Financial markets are worried about a short-term correction on the back of expectations getting ahead of reality.
• But, there is a more fundamental economic Armageddon-flavoured long-term societal theme gaining momentum.

Wake up and smell the proverbial coffee…

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Blain’s Morning Porridge 25th, September 2026 –

“Be careful to understand when the world is laughing with you, and not at you.”

The current summit between Trump and Xi will likely become little more than a footnote in the history of the end of one economic empire and the emergence of the next. Xi has patience and has visited DC to let Trump do his thing, while he seeks time and stability to firmly establish China’s dominance. He is guided by the Sun Tzu dictum “Never interrupt your enemy while they are making mistakes.”

Key Takeaways:

• The most common nickname for Trump in China is Chuan Jianguo; the man who built China by undermining America.
• Xi’s has achieved his goal in Washington – constructive strategic stability allowing China to secure its geopolitical position, economic strength and AI ambitions while Trump faces political crisis as a lame-duck, a polarised and disunited electorate, and a substantial likelihood of an economic shock and market correction.
• Meanwhile the West is riven and divided by fake-news, misinformation and cyber-attacks, and the consequences of conflict creating inflation. Trump failed to de-escalate Ukraine and started Iran. Tactical destabilisation benefits China, and is undertaken by Russia and Iran - its’ client states.
• China’s secret sauce is patience and not interrupting Trump. China has no need to defeat America directly, it can wait while its relative power and dominance is diminished by Trump’s comments, wars and his sucking up to himself and Putin while insulting allies.
• China’s effective Rare Earth monopoly gives it leverage, while it’s likely to challenge in AI by not only producing just as good, but integrated AI systems. The USA has bet the economy and markets its AI dominance is set to reap enormous rewards. If it loses the bet… !
• Markets are still pricing for the USA to dominate technology, finance and geopolitical might and power. But the reality, as the summit demonstrates, is we are in a time of hegemonic change and economic power and power projection is slipping towards China.
• That has massive implications across currencies, US treasuries, tech dominance, defence, conflict, the emergence of alternatives, and future instability. Get ahead of them.

The headlines across the media all same roughly the same thing this morning.

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Blain’s Morning Porridge – September 24th, 2026

“The bond market is not your friend. It is reality.”

In Bond Markets there is truth – and they are flashing warning signals a systemic market reset is on the cards. As rates rise, the relative prices of all financial assets will be impacted as the price of money normalises. It’s a period of transition with a high chance of an unstable reset, which is magnified by QE setting a false expectation of long-term low rates, and the growing realisation financial systems will suffer from political incompetence.

Key Takeaways:

• Equities tell stories and sell upside narrative. Bonds impose financial reality. They impose that reality around the market in terms of relative yields – the risk-free rate.
• It is not as simple as inflation means bond yields have to rise. Refinancing risk is critical and involves addressing government debt burdens by factoring inflation, the debt quantum and refinancing schedule, alternative asset prices, political competency and the election cycle. Its complex.
• Fiscal credibility between governments and central banks is critical – but is increasingly questionable, meaning addressing future crises may become problematical.
• There is a danger that government bonds go into a critical chain reaction - rising bond yields raise refinancing costs, increasing deficits, increasing refinancing risks, rising supply, rising yields – where are the control rods to dampen the reaction?
• After years of low rates, cheap money, inflated expectations, and speculation, the whole edifice of modern markets are vulnerable to a corrective reset. It could shake every financial asset from AI to Zero Coupon Bonds. (Come on, respect for thinking up a financial asset beginning with Z!)

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Blain’s Morning Porridge 23rd, September 2026

“I can’t tell the wind, the tide or the waves anything, but I can pull the sheets to bend the sails to them.”

Sailing is an easy way to distract me. Although water activities are thriving, the traditional sailing world is undergoing enormous change as a result of economic pressure and shifting societal trends. It’s only a tiny part of the overall economic picture but sailing hints at how the world may look in the future as affordability, economic confidence, and income inequalities start to divide society further into haves and have-not camps.

Key Takeaways

• Sailing might be a tiny part of the economy, but it highlights how society and the economy is shifting.
• It was once the preserve of the wealthy, and may become so again. Today Sailing is one of the UK’s most popular participant sports, but there is very little sailing in the media.
• Demand for marine leisure activities is growing, but the market for sailing has been crowded out by rising costs and demand.
• For younger sailors the costs of housing, rising expenses, and increasing income insecurity alongside falling disposable earnings highlights the unaffordability of a passion for a long-term hobby.
• Efforts to democratise sailing by making it more accessible are critical, but may not succeed as it becomes more expensive.

Something a little different for the Morning Porridge today… Fellow sailors - feel free to comment.

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Blain’s Morning Porridge 22nd, September 2026

“To be prepared is half the victory.”

The UK is gradually waking up to the reality of very changed world. Its 40 years since we thought we’d won the Cold War. Now it’s apparent a new cycle of aggression has started, and just how woefully the West, and particularly the UK, is prepared. The Wargame, a new programme on SKY, explores just how swiftly the UK could be brought low in a conflict situation. It reinforces the message about the primacy of defence for governments and investment. If you want returns – they have to be protected.

Key Takeways

• Effective defence is expensive but much cheaper than the economic destruction of conflict. (It also brings significant economic multiplier effects!)
• There is a significant dearth of private capital in Europe directed towards defence – unlike in the US, where the opportunities to acquire European Mil-tec has been noticed.
• The “Wargame” exposes how unprepared the UK is for conflict.
• The next war started back in 2022 in Ukraine – there will be no declaration of war, but mounting sabotage, infrastructure attacks, cyber-assaults, misinformation and maskirovka.
• Defence is binary – you are either a nation with the credibility to defend itself which deters attack, or you are not. The UK is not.
• Europe and the USA were united by NATO. That is over.
• The new Mil-Tech sector is much wider than a battlefield. The new battlespace is all around us; on land, in the air, on sea, in space and in the digital world.

It’s over a month till Halloween, but it’s time to give readers a good old fashioned scare this morning… I recommend you watch SKY’s new drama – The Wargame.

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Blain’s Morning Porridge 21st, Sept 2026 – US Midterms? Maybe not as bad as we fear?

“The guide is inaccurate but cheaper and features the words DON’T PANIC in large friendly letters on its cover.”

At the back of all traders and investors minds is the question: “just how bad might the US Midterms be?" Relax. Things are never as bad as we fear, (though seldom as good as we hope). The mid-terms will be consequential, and no matter what the result are unlikely to do much to reverse the long-term decline of the US Treasury Market – the single most important market on the planet.

Key Takeaways:

• Whoever wins the US Midterms is unlikely to ameliorate market concerns around US deficits, inflation, the structure of the Treasury market, nor increase confidence in the long-term outlook for stocks.
• The US will likely be gridlocked – Trump Lame-Ducked, and increased lawfare and polarisation. Expect shutdowns, budget confrontations, and delays to effective policy.
• The results will be closer than expected – the MAGA Republicans will outspend the Democrats 3/2 in attack-advertising concentrated on the last 6 weeks.
• What Trump does with “his money” will be interesting – does he spend it on candidates, or keep it to leverage his influence ahead of 2028?
• The consequences on global markets will be substantial. As conflict risks rise, the USA will be distracted, supporting new alliances and trade deals.
• The market to watch will be US Treasuries. It will set the tone across more speculative assets from AI to Private Capital Markets. Even as interest rates rise, bonds may be a more stable asset class than equities.

It’s just 6 weeks to the US midterm elections. How will the result set sentiment and direction for the future path of markets? It’s probably a good idea to be figuring it out today, rather than being swamped if markets turn fruity post Tuesday, November 3rd.

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Blain’s Morning Porridge Sept 17th, 2026

“The 1% of Americans funding politics get to chose how the rest will live.”

Kevin Warsh established a degree of credibility for the Fed and himself yesterday by hiking rates. The Fed is focused on fighting inflation – the best long-term option, but a short-term painful outcome for American voters. The coming electoral cycles in the USA, Europe and the UK will all highlight the power of money that’s driving the narrative. Big money from Crypto and Tech is driving political decisions. The electorate will suffer the consequences of policies set to elicit donations rather than foster long-term growth and economic security. 

Key Takeaways:

• No need to worry about Kevin Warsh or the Fed – the unanimous 25bp hike confirms independence and price stability is the goal.
• Cutting inflation is an economic imperative, but politically painful – thus Trump’s efforts to pin the blame for higher rates on a politically motived board of Democrat appointees.
• To avoid irreparable damage at the Mid-Terms Trump is trying to sell critical swing voters hope in the form of electoral bribes, jam tomorrow, while blaming the “other-side”. His calls are economically incoherent but designed to win votes by showing the other side is worse.
• To get his narrative across means financing massive spend on advertising, new media, socials, influencers and podcasts.
• Increasingly fake news and disinformation is roiling the narrative – raising fears foreign interests may be a play, favouring Trump because of the damage he is doing to perceptions of the USA abroad.
• America’s billionaires are bought into it – massively favouring Trump with the political donations to fund the media narrative. They are making payments to retain influence in Trump’s court, and to reap regulatory favours for Tech and Crypto.
• Reform in the UK shows clearly how it works: Crypto interests have made Reform the wealthiest political party in UK history – in return Reform policy will directly benefit Crypto interests, including lower taxes.

Kevin Warsh established his bona fides as an Inflation Hawk yesterday. He ain’t the Sock Puppet Elizabeth Warren said he would be.

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Blain’s Morning Porridge 16th, Sept 2026

“Gilts are dull, boring and predicable, but utterly terrify markets when they move a fraction of basis point.”

Global Bond yields remain… fragile. As the US breaches 5% 10-year yields, the UK is now slowing QT which should be market positive. It’s high time the Bank of England and the UK Treasury (which famously pretend the other doesn’t exist) cooperate on liability management to address the UK’s debt pile – which is actually in much better shape than the right-wing press would have you believe.

An Apology: Yesterday we had a IOS problem. “Idiot on Seat” – I forgot to switch on the microphone recording the Morning Porridge podcast. I only found out on the train!

Key Takeaways:

• The global bond selloff hit a worrying tidemark yesterday as the US 10-year Treasury hit 5%. Shock, horror… mass panic? Nope – Normalisation.
• The Bank of England spotted the kerfuffle in bonds – and are doing the right thing by slowing QT.
• The key issue for bond markets is how QT impacts demand/supply pricing. At current rates QT was about 22% of the size of new UK debt issuance. That’s had a significant negative impact in terms of the higher yields on Gilts.
• The UK’s debt position isn’t as bad as other nations – its’ longer debt profile means less to refinance each year. Cutting competing supply will ease prices further.
• Slowing QT will not create a sudden bull market, but will ease the pressure from energy costs, slowing trade, rising inflation, conflict risks and unsustainable government deficits. (It might even shut the Torygraph up for a while…)
• The UK’s Treasury and The Bank should cooperate to abandon QT completely and embrace liability management of the UK’s debt pile.
• Zonk Theory – replacing the Bank’s Portfolio with a Zero-Coupon Perpetual “Zonk” could reduce the UK’s outstanding debt, avoid crystalised losses from QT and further lower debt costs…

As predicted, US 10-year Treasury yields broke through 5% last night. I am intrigued to see who Scotty Bessent blames it on. Zelensky? The Mekon?

Meanwhile, the Bank of England is about to slow its Quantitative Tightening programme.

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Blain’s Morning Porridge September 15th, 2026

“Europe was created by history. America is a product of philosophy.”

Europe is a diverse, culturally rich and fascinating continent but increasingly looks an economic basket case facing economic and demographic decline. Its suffering economic PTSD after successive shocks in Banking, Sovereign Debt and now Energy. Now it’s being squeezed between an unreliable USA and China’s proxy, Russia. Maybe that’s the challenge it needs?

LINK TO PODCAST

Key Takeaways

• The Geopolitical fragmentation of the Western Alliance raises serious challenges for Europe.
• Europe should be economically significant, but its history and political fragmentation has held it back.
• It is scarred by economic crises – 2008, the Sovereign Debt Crisis, the Ukraine Oil Shock, and now the post-Nato era challenge to defence.
• The key economic weakness is the lack of depth to its capital markets. There is no single market to enable European businesses to thrive.
• Effective capital markets will require Unity (and probably the integration of the UK).
• Europe is not too small, poor or unskilled, but it lacks an effective capital market and political unity. In an increasingly fraxious world it must unify or be picked off one by one.

We live in a very changed World.

Europe is struggling with scale, growth and productivity. The future looks likely to be American or Chinese. Neither of them looks particularly attractive options from this side of the Pond. Yoorp will likely be left behind. Unless… something was to happen to galvanise European unity and growth.

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Blain’s Morning Porridge – 14th, Sept 2026

“Scary thought no 1 – AI was watching as I wrote this, taken note, and made the appropriate responses.”

There is a rising kerfuffle around the safety of AI. There are good reasons to be fearful. The leading AI Tech Lords now acknowledge there are serious dangers – but AI is now a strategic resource! Thus, there are games of national and company self-interest, and geopolitics all at play in terms of how to harness it. What it all means for markets is still unclear – but some reassessment of the risks should be considered. The horses are running and the stable door is wide open.

 Key Takeaways:

• The AI Tech Lords now acknowledge serious risks from the breakneck rollout of AI, calling for guardrails, safeguards and a slower pace of development.
• They may already be too late – there are warning signs AI is teaching itself, and learning how to “swarm” – with massive implications for the digital web economy.
• Regulation will be too slow.
• AI is now a strategic resource – and will need limits in the same way as nuclear weapons.
• A China/US AI Arms Race is probably inevitable.
• Markets have to reassess what a slowdown or oversight (and maybe regulation), plus greater safety costs means for AI revenues.

How afraid should we be? The Pandora’s Box of the AI race was flung open a while ago…  

Blain’s Morning Comment 9/11 2026

“The sleeper must awaken…”

Keep your eyes on JD Vance. He is headed for a coronation. What will that mean for America and global markets? He’s not stupid, but many suspect hes is not his own man – he owes his successes to billionaire Mega-mind Peter Theil. Vance will lead the attack on the Progressive, Weirdo, Democratic Socialists, but even if he wins… what kind of market and economy might he inherit? 

Key Takeaways:

• JD Vance is stepping to the fore as Trump’s likely successor. He’s doing a competent job sorting through the mess that is Trump’s war on Iran.
• There are questions around how much he is still influenced by Peter Theil and how a Vance presidency may serve the “Nerd” Billionaire faction.
• We are passed Peak Trump – that will be confirmed in November. Step forward the new man.
• Vance will campaign around the stability of conservative Republican political competency vs the danger of radical progressive Democrat socialists, who have a branding problem and no clear leader.
• Whatever happens, the scale of US debt and how to refinance it will be the legacy issue for whoever wins in 2028.
• The consequences of years of financial repression, capital markets abundance, cheap liquidity and now de-dollarisation, and a crisis in refinancing debt could trigger higher inflation and economic crisis.

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Blain’s Morning Porridge 10th, Sept 2026

“So long and thanks for all the fish... Relax and let the world dissolve around you…”

If there is a 10% chance AI is going to kill us all, then that’s probably bad news for bond markets. There are a lots of things that threaten us, but fortunately most of them are quite unlikely. A 1 in 10 chance we’re all toast is not. Global markets will probably choose to look the other way, but how would your own investment decisions change if you knew the Terminator is about to knock on the door?

Key Takeaways

• A 10% extinction risk is the Economic Elephant in the Room – but markets will probably choose not to see it.
• What is the right response to the threat? Go spend it while you still can!
• AI risks are probably more significant than any natural threat – including the Zombie apocalypse and JD Vance’s “end of times”.
• A 10% AI risk may be far higher than it sounds – it’s not a binary Terminator moment, but will be an ongoing process. If it’s a 10% chance of AI Quietus over 5 years, then in 50 years time there is only a 35% probability we are still around!
• AI Alignment is nonsense – we are too fickle, emotional and destructive to predict or model.
• You should read more Sci-Fi. Isaac Asimov predicted this would happen 85 years ago, wrote the laws of Robotics and a charming little story about how AI finds religion!

Oh dear. Not much point worrying about the 30-year Treasury bond then? If there is a 10% chance that AI is going to destroy humanity... Well, what’s the point…

Time to go spend it all.

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Blain’s Morning Porridge 9th, Sept 2026

“This is who we are.”

Friday is the 25th anniversary of 9/11. It was the worst of days. It changed the World forever. How has it changed America and what are the risks it raises for the future? America is a great and powerful nation – but is going through a painful period. What did Osama Bin Laden’s carefully calculated terror do to America’s future? The scars run deep. Who won?

Key Takeaways

• 9/11 was an asymmetric outrage designed to shock and trigger an over-reaction – yet America swiftly renewed itself, defining itself by its unity, resilience and determination.
• The War on Terror defined the US for the early part of this millennium, and has cost trillions – with the negatives of rising debt and ongoing regional instability. It became a focus for growing resentment of the USA.
• US public opinion has shifted against “foreign entanglements”, other nations wars, and become more inward looking. The initial unity soured – today the USA is more politically polarised than ever before.
• What did the War on Terror achieve? Afghanistan is back in Taliban hands, Iraq is a basket case, ISIS Islamic radicalism still festers in the sands, and the War on Iran is going nowhere.
• Decades of fruitless war and security operations have left the USA stretched, while China was able to build economic infrastructure, grow its economy and now challenge for hegemonic power.
• There is a danger an overstretched America suffers a strategic setback of the scale of the Tet Offensive of 1968 during the Vietnam war which could trigger a further distancing of the USA from global alliances.

Friday will be the 25th Anniversary of 9/11.

9/11 remains the most viscerally shocking event of our lifetimes. Any of us old enough know exactly where we were as it happened.

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Blain’s Morning Porridge 8th Sept, 2026

“If I was trying to get to there, I would not be starting from here.”

The coming year is likely to be shaped by higher inflation from energy and El Nino, rising interest rates, “policy-mistake” risks, and revaluation risks as capital markets adapt to rate normalisation. Looming over it all be political noise. Understanding where we are, how we got here and what happens next will be critical. 

Key Takeaways:

• Inflation is likely to remain “elevated” through 2027 – leading to multiple market consequences and revaluation threat.
• Interest rates will likely stay on a rising path – with elevated “policy-mistake” risk in the UK as inflation and slowing growth collide.
• The UK’s economic problems are the consequences of long-term economic history and accumulated economic weaknesses resulting from successive government policies.
• The USA is economically robust but faces threats from Chinese competition in it core hi-value tech markets and the potential of hegemonic decline.
• Rising US rates may weaken the capital markets that have driven US success, but are more likely to trigger a fundamental reassessment of value – corrective.
• Trying to sort out broken economies and fractured politics will prove difficult – it may be time to give Neo-Keynesian fiscal polies and investment a try… why not? Nothing else is working.

The trajectory of US and UK interest rates is not looking good.

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Blain’s Morning Porridge Sept 7th, 2026

“Someday, I will call upon you to perform a service for me...”

Trump is the most unrestrained US president – yet is supported by the richest and most successful men in America even as we watch him upend everything the USA once stood for. What if Trump is just the front-man for a Regime that is changing the World - breaking traditional relationships and alliances to create a stronger America as China threatens to supersede it? Europe is struggling with the new rules of America’s primacy, the end of the Nato Era, the emergence of a new American hemisphere, and how nations should relate to the new Imperial USA. How these will all play in the Great Game to be Global Hegemon is as yet unclear, but the world is changing fast.

Key Takeaways

• There is nothing a good conspiracy theory to start the week, but there is a reason right-wing US billionaires are so keen to support Trump. They are looking to the future and how to protect their power, position and influence. Trump was the perfect front-man for them.
• The Trump regime has been willing to risk America’s soft-power to secure a new era of America Primacy, and to create an imperial US hemisphere. Canada, Greenland and the Falklands are all game-pieces to be resolved.
• Trump’s instance on leading global peace initiatives may be rooted in his desire for legacy Nobel prize, but the Regime’s objectives are about confirming US primacy over its allies, as are the demands they pay for their own defence.
• Trump may think the USA can recover its’ position as the global manufacturing power – the promise made to MAGA faithful - but the Regime believes a new American hemisphere and tech-power and supremacy could maintain economic power.
• Trump is willing to kow-tow to Emperor Xi of China and Tzar Putin of Russia because that’s where Global power resides. Why deal with divided Europeans, when there is a new world order to create?
• Trump’s green-light to Argentina on the Falklands wasn’t random – it was a deliberate statement on intent on what the new world will look like.

I’ve been reading the new talk-of-the-town sensationalist book: The Nerd Reich: Silicon Valley Fascism and the War on Democracy. It's… interesting. Get past the verbiage and it’s about how billionaire techies have banded around Trump because they see opportunity – which is scary and very far removed from the constitution. To be clear it’s an intriguing book. I don’t agree with it… all.

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Blain’s Morning Porridge September 3rd, 2026

“These are not the droids you are looking for…”

The media has us all convinced Western Economies are on the verge of a bond meltdown. However, what is really happening is The Great Bond Market Normalisation – a return to real interest rates that reflect the global economy and where nations are. The big risk is that repricing government bonds will crash currently absurd valuations across other financial assets – precipitating a wider market crisis.

Key Takeaways:

• The Bond market is not the crisis – worry about what happens to financial asset valuations when the risk free rate normalises after years of financial repression (ultra-low rates). That will hurt. There is a systemic feedback loop of rising rates forcing revaluations.
• Current bond yields are not extreme. They are low by historical standards.
• Western nations are not going to default on high debt levels, and the fears about bond vigilantes are over-exaggerated. They are magnified by politically motivated media.
• Inflation, demand and supply and the economic outlook will be key drivers of rising yields – and always have been, except in periods of financial repression – as we saw from 2008-2023.
• The UK is vulnerable due to low growth post Brexit, but its bond market is fundamentally in better health with a longer duration than most. Rising gilt yields have been magnified into crisis by hostile right-wing media and political posturing. Look past it.

Markets are uncertain. Yields are rising. Debt quantums are uncomfortably high... What’s really going wrong in the bond markets?

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Blain’s Morning Porridge, 2nd September 2026

“No injury to humans. Obedience to humans. Self-preservation.”

Narratives are what drive stock markets. Robots are seen as a massive multi-trillion-dollar Total Addressable Market – with strategic and social implications that will utterly change economies. Musk expects to sell millions every year. The reality is likely to be very different – robotics and society will evolve and probably end up unlike anything we envisage today. 

Key Takeaways:

• Robotics may become the most visible part of the AI revolution.
• It is likely to become a huge industrial sector – but it’s unlikely to develop as current expectations predict.
• Industrial Robotics will evolve away from the bi-pedal format – designed for function and maybe modular. Scale industrial robotics will become a strategic resource.
• The market for humanoid bi-pedal robots may become a domestic niche.
• Competition is hotting up – Elon Musk expects to sell millions of Optimus ‘bots, but China is already producing.
• China’s success in capturing swathes of global auto demand highlights the cost vs utility challenge for Western Robotic manufacturers.

The market’s attention is fixed on the disconcerting moves in the bond markets. Bond yields are rising – No Sh*t Sherlock. It doesn’t mean the end of the world as we know it. It means a market responding to the multiple new realities of inflation, trade disruptions, hefty debt loads, frothy valuations, changing geopolitical money flows, and the rest.

Blain’s Morning Porridge, September 1st, 2026

“Markets have no memory. When crisis hits the reasons are swiftly forgotten, and we have to relearn them all again.”

Is a financial crisis coming our way? US Debt, Inflation, Trade, Energy, AI concerns and the rest pushed the revealed wisdom of new Fed Head Kevin Warsh out the limelight last week. Bond yields continue to rise. There are now growing fears of slowdown, or worse. Cheer up! Not the end of the World. But if a financial crisis is coming it will reflect lessons from the past on liquidity, but to solve it we also must acknowledge how much the world has changed since the last one in 2008. This time it will be different!

Key takeaways:

• The Fed is moving towards tighter policy
• Oil and trade shocks are rising – Warsh did well to iterate his thinking, but the real economy leads markets.
• The Fed and Treasury may be pulling different ways – if the market perceives it to be so, confidence will drop.
• AI is no longer the key factor driving markets – strong numbers don’t disguise rising doubts.
• What happens when US 10-year hits 5%?
• What role should China play in a global financial crisis?

I got taken to task by a Morning Porridge reader on Friday morning. He told me my negativity was getting repetitive and overly cynical. These may be fair comments… I shall take note – but I won’t want to change the style. I will keep telling it is as I see it. Other market commentators are available – although, to be fair… I am not reading much positivity elsewhere.

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Blain’s Morning Porridge, September 1st, 2026

“Markets have no memory. When crisis hits the reasons are swiftly forgotten, and we have to relearn them all again.”

Is a financial crisis coming our way? US Debt, Inflation, Trade, Energy, AI concerns and the rest pushed the revealed wisdom of new Fed Head Kevin Warsh out the limelight last week. Bond yields continue to rise. There are now growing fears of slowdown, or worse. Cheer up! Not the end of the World. But if a financial crisis is coming it will reflect lessons from the past on liquidity, but to solve it we also must acknowledge how much the world has changed since the last one in 2008. This time it will be different!

Key takeaways:

• The Fed is moving towards tighter policy
• Oil and trade shocks are rising – Warsh did well to iterate his thinking, but the real economy leads markets.
• The Fed and Treasury may be pulling different ways – if the market perceives it to be so, confidence will drop.
• AI is no longer the key factor driving markets – strong numbers don’t disguise rising doubts.
• What happens when US 10-year hits 5%?
• What role should China play in a global financial crisis?

I got taken to task by a Morning Porridge reader on Friday morning. He told me my negativity was getting repetitive and overly cynical. These may be fair comments… I shall take note – but I won’t want to change the style. I will keep telling it is as I see it. Other market commentators are available – although, to be fair… I am not reading much positivity elsewhere.

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Blain’s Morning Porridge August 28th, 2026

“Then we shall fight in the shade…”

Tensions between Moscow and Europe are rising. There are rumours of war. While Western nations seek to rearm and adopt the lessons learnt by Ukraine, a bubble has developed in Mil-Tec arounds autonomy and drones. Defence investment is not a speculative opportunity – but a key issue for the sustainability and longevity of nations. It’s a complex investment landscape that requires specialist expert knowledge.

Key Takeaways:

• Defence investment is an economic necessity. It will not be buried by the developing Mil-Tec bubble.
• Private capital firms rushing into the “Total Addressable Market” (TAM) rather than understanding the need is creating the frothy investment market.
• The rules of defence investment are very different to Tech. Ultimately; there is one monopoly buyer of military kit – governments, but geopolitical shifts, changing alliances, and the reinvention and creation of new defence contractor “primes” underlies the re-growth of the sector.
• The depth of US capital markets is funding the bubble – European investors have been slow to commit to Defence.
• Understanding the evolution of the battlespace (which exists in multiple dimensions) is the key to due diligence of defence opportunities.
• Military reality matters far more than financial hype. Investment needs to be considered but immediate.

As we wait to hear all about what Kevin Warsh says at Jackson Hole, I thought it might be interesting to write about my day job - financing the new Defence Investment Fund; Spitfire Strategic Capital.

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Blain’s Morning Porridge August 27th, 2026

“I’d like be thought of as a decent human being….”

Celebrate Dolly. A reminder of real American exceptionalism and authenticity. What will replace her in the new America where Mega Tech and AI can settle the wrongs they do with no-liabilities settlements? Where the Vice President is a manufactured product of Billionaire’s Libertarian philosophy? Where the President runs the country as a fief to be milked dry? But can Authenticity can be bought and sold by the yard? At some point the people are going to question what’s really happening.   

Key Takeaways

• Dolly Parton’s passing represents the end of an Age. Her authenticity was entirely of her own construction and on her own terms. There are no politicians like her.
• Authenticity is political currency – but it is increasingly scarce.
• Meta’s sudden settlement on child social media addiction is the new reality – true corporate power is the ability to payoff wrongdoing with no admission of guilt.
• Trump’s political success was persuading voters he was the authentic voice of the left-behind and would restore them – but now he sits at the centre of the coterie of tech billionaires who seek a new version of America.
• The Billionaire vision of a new America is, as yet, unclear but it sure won’t be “all men are created equal”. Some are very much more equal than 99.99% of their fellow Americans.

The flags are flying at half-mast across the US in a mark of respect for Dolly Parton. They call it grief, but it’s a celebration of a genuine life lived well and loved well. But it is notable because it’s the end of an era – where Dolly’s success and politicians’ power were factors of their authenticity.

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Blain’s Morning Porridge August 25th, 2026

“Financial Gravity is shifting East – as will investment.”

One rule of finance is “follow the money”. The ructions and rising doubts on the sustainability of the US Treasury Market and dollar in the evolving post-US era economy means it may be time for investment transition strategies – where will the future lie? What aspects of US and other Western Democracies will thrive, and how much more investible will China and, perhaps, India become? What are the risks?

Key Takeaways:

• The West is no longer the only game in town. Concerns over the sustainability of Western debt, economic growth, political stability, America First transactionalism, and “financialisation” have eroded confidence.
• The unravelling of NATO and western division has accelerated decline – the West is no longer a cohesive economic block – and is less economically and militarily formidable than it was.
• China’s economy has evolved swiftly and leaves the state command and control economy look like a viable alternative to the West.
• China is not self-sufficient. There are still areas the West can maintain comparative advantage to trade from. The West is still “richer” in GDP capita terms.
• Europe faces a choice – pragmatic reciprocal engagement with China may be better than trying to deal with unstable populist politics in the USA. But that will further strengthen China’s strategic aim of splitting the Western Democracies.
• Longer-term, India’s demographics may prove a second option for Europe – both seek growth and markets. Perhaps a new European/Indian trade alliance could become a new trading block?

Headlines on the front page of the Thunderer of London this morning is the news the Rausing family - billionaire inventors of the tetra Pak – have taken $1 bln out the US stock market.

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Blain’s Morning Porridge August 24th, 2026

“Change before you have to…”

This week is going to be… “interesting”. Confidence in the US financial markets and system is under pressure. The US owes more than $40 trillion. Bessent’s intervention in bond markets has backfired, the market is waiting to judge new Fed Head Kevin Warsh, and Trump has kicked off a new trade war with Canada. The USA’s Virtuous Sovereign Trinity of the Dollar, the Treasury Market, and Political Competency looks well-wobbly. Meanwhile, the latest documentary on Boeing shows how the myth of US exceptionalism is under pressure.

Key Takeaways:

• This could become a confidence and liquidity crisis if markets continue to pressure Treasuries.
• Bessent’s attempt to manipulate the US yield curve is seen as political interference in the Fed’s role – and has backfired.
• QE worked in 2010-2022 because inflation wasn’t a threat, debt quantum’s were manageable, there was consensus, and the dollar’s dominance was not in question. Today, the situation is very different. What happens to market confidence if the Fed Put no longer works?
• Kevin Warsh’s credibility is the main question to be answered at Jackson Hole. Will he try to please the president, equivocate, or please markets? He could trigger a Treasury breakout. A bond market sell-off is manageable – but only if the Fed retains credibility!
• A treasury crisis could impact all US assets. The new documentary on Boeing “Freefall”, is a case study on how the financialisation of US firms enabled by the depth of US capital markets may be about to unravel.

This is shaping up to be a very dangerous week for markets and the US financial system.

Blain’s Morning Porridge August 20th, 2026

“There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy.”

With US debt about the breach $40 trillion, Scotty Bessent intervened to stem rising long-end yields. The market loved it, but the reality is that distorting interest rates has all kinds of consequences. That includes the risk an economy focused entirely on financial returns isn’t spotting or addressing real world threats to jobs, growth, conflict, the environment and climate. Maybe it’s time to let rates normalise?

 Key Takeaways

• Rising normalised Bond yields may be a cure rather than a crisis for overly financialised Western Economies.
• Cheap money distorts asset values, and economic behaviours.
• Bessent’s pump priming of the Long-End is market pleasing, liquidity enhancing, and confirmation the Fed Put is still there… but it’s like another round of Columbian marching powder at a slowing party.
• The legacy of 18 years of post 2008 GFC policy has been financial asset inflation, market froth, speculation and undeliverable market narratives that get buried in the expectation low rates will drive markets forever.
• Financially Sovereign Nations don’t default, but bad, financialised policy leading to inflation may ultimately unravel bond markets and make them unsustainable.
• Financial speculation, encouraged by policy distortions, distracts from the real-world requirements to enhance defence, infrastructure, housing, energy and resilience.

Interesting day in Bonds. As I write this morning, the US Debt Clock (the total the US Government owes) stands at $39.46 trillion – tomorrow it will the crash through $40 trillion.

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Blain’s Morning Porridge August 19th, 2026

“What do you think of the French Revolution?” … “It’s too early to say.”

The Chinese will be delighted. Western Economies are increasingly polarised and fractured. The US president calls anyone opposing him a “Communist”. The Right Wing threatens mass deportations, while the new emerging Populist Left is demanding redistribution and equality. Destabilising Western Democracies through fake news and disinformation is destroying the resilience of nations to resist. How should markets react? 

Key Takeaways:

• Western societies are increasingly divided into haves and have-nots. Hence the rise of populism on both left and right. That has impacted social and political cohesion – the factors that determine resilience, a critical national-security asset.
• The West is already at war – fake news, disinformation, propaganda, sabotage and cyber-attacks are undermining stability and resilience.
• The costs to counter hostile nations will be enormous in terms of resources required. Industrial capacity in the west has been neglected. Defence depends on rebuilding capacity, supply chains, labour and skills, and logistical depth. Money is tight after years of QE and welfare spending.
• The financial markets are confused about defence – it’s a critical part of the infrastructure of democracy, but many institutional investors still regard it as “incompatible with responsible investing”!

Born in the early 1960s, I am one of a fortunate generation.

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Blain’s Morning Porridge August 18th, 2026

“Turns out you didn’t need a war to destroy the economy…”

19 months of Donald J Trump have been extraordinary – the unravelling of alliances, the forever war with Iran, and the belated discovery that financial clout doesn’t translate into geopolitical power. While the Mid-terms may make Trump a lame-duck, the consequences of Trump will hamstring the USA for decades and colour a new economic reality. 

Key Takeaways

• Markets are making a mistake if they think Trump is just a temporary noise and aberration. The consequences of the Trump era could take decades to correct and will be very significant on the dollar order of markets.
• Trump has squandered American’s real global strength – its alliances. From the Gulf, The China Seas, to Europe, nations are now uncertain of America’s reliability and credibility.
• Half of America’s ambassadorial posts are vacant. Many others have been filled with presidential cronies.
• Financial supremacy is not the same as industrial supremacy – dollars can’t be turned into skilled labour, new ships, planes, tanks or missiles overnight.
• China has time on its side. Its’ proxies: Iran, Russia and North Korea, can force America to consume war stocks at rates it can’t replace. China wins if America is exhausted before it has to do anything.

Yesterday was an interesting one for Trump watchers. The American President pulled the USA out of planned military exercises with South Korea – citing his great relationship with Kim the Plump of North Korea. Then he threatened to bomb Oman if it gets in the way of his deal with Iran. What deal?

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Blain’s Morning Porridge August 17th, 2026

“Euphoria one day, the sound of banks crashing the next…”

The factor that’s enabled the extraordinary success and longevity of the AI bubble has been the willingness of the markets to finance it. What happens if the liquidity machine driving AI were to suddenly stop? As the limits of bond markets, private credit, and using insurance companies to park risk, become increasingly apparent – what would a liquidity event do to current markets? Ouch!

Key Takeaways:

• Equities and bonds are diverging. Equities think the party continues. Bonds believe inflation and higher rates are nailed on. They can’t both be right
• Liquidity if the key factor driving markets – not belief in AI. If it dries up, then the whole market wobbles.
• A Liquidity Event is probably hiding in plain sight – perhaps a US treasury auction that goes awry, or an insurance company taking a thumping on a credit loss.
• Risk has not disappeared – it has been transferred from the banking sector to the asset management sector.
• Because investors think Elon Musk will make a digital data centre work doesn’t make it a fact – until, maybe, he does.

Markets are neither smart nor clever.

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Blain’s Morning Porridge, August 14th, 2026

“The winner is often the team that makes the least mistakes.”

Markets tend to regard Populist Politics as a threat. They risk destabilisation, dent stability and raise questions about competency. Although Nigel Farage won the Clacton by-election, his brand is badly damaged and that puts Reform in trouble. The question is whether the traditional parties can regain electoral prominence and put in place the necessary policies to repair Broken Britain’s infrastructure and finances – and attract investment.

Key Takeaways

• Farage won the Clacton by-election, but his political brand may be damaged beyond repair.
• The high-tide of UK political populism may have passed – but the resentments behind its appeal, and which drove Brexit, still remain unaddressed.
• The challenge is now on traditional parties to deliver – how will they solve the multiple issues around Broken Britain?
• Sounder politics may put government finances on a stronger footing.
• 
  

Early Friday Morning we learnt Nigel Farage, the leader of the UK populist Reform Party, won the much-derided Clacton By-Election. He scored more than double the votes of his closest political rival – Count Binface, a joke candidate.

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Blain’s Morning Porridge August 13th, 2026

“Complexity does not eliminate risk – it simply hides it in plain sight.”

The AI infrastructure build out already dominates credit market funding. Now Nvidia will effectively securitise its chips to its market though a panel of private capital markets firms that lend it credibility. The worry is complex and appealing deal structures will simply hide the risks inherent in AI – and increase the likelihood of a correlated crash when something inevitably breaks. 

Key takeaways

• Financial complexity will make AI easier to finance – but it does not change the economic risks.
• The securitisation of Nvidia chips has the potential to accelerate the AI boom – but comes with increased correlation risks.
• Nvidia is “guilty” of circular financing – funding its customers to buy its chips and using the markets to absorb the risks.
• There are questions about chip longevity – how soon will they become obsolete or be replaced by competitors?
• The degree to which Nvidia risks now links hyperscalers, datacentres, energy, water, and the AI industry is enormous, and could destabilise the economy in a crisis. There are multiple points of potential failure.

What’s not to like about the new Nvidia $500 bln Chip Funding Programme?

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Blain’s Morning Porridge August 10th, 2026

“When the evil of a snowflake in June could still be the source of relief…” 

2026 looks likely to be the warmest year ever. Oceans are charged with energy to drive ever larger storm systems. Wildfires and droughts are ravaging the land. What if this is only the beginning? What if the climate is about to stage a chaotic breakout? Just how resilient will humanity be to a war with an implacable enemy that will give no quarter? What might it mean for the economy?

Key Takeaways

• Humanity is ingenious and great at innovating – which has historically made us robust and resilient to the challenge of conflict.
• Nations can win wars through force or diplomacy, but no one can negotiate with physics to turn around Climate Change.
• Defence and Climate Mitigation are linked – defence against aggression, and protection from a changing environment are economic costs.
• The economic consequences of climate change will be huge – and therefore tremendous economic opportunities.
• The big themes will include water, cooling, energy, food, drought and resilient infrastructure.
• Climate mitigation may be a war that is never won, but one we learn to live with.

The path of Human economic/technological advancement, sadly, has largely been a story of how we adapt, innovate and rise to conflict.

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Blain’s Morning Porridge August 10th, 2026

“When the evil of a snowflake in June could still be the source of relief…” 

2026 looks likely to be the warmest year ever. Oceans are charged with energy to drive ever larger storm systems. Wildfires and droughts are ravaging the land. What if this is only the beginning? What if the climate is about to stage a chaotic breakout? Just how resilient will humanity be to a war with an implacable enemy that will give no quarter? What might it mean for the economy?

Key Takeaways

• Humanity is ingenious and great at innovating – which has historically made us robust and resilient to the challenge of conflict.
• Nations can win wars through force or diplomacy, but no one can negotiate with physics to turn around Climate Change.
• Defence and Climate Mitigation are linked – defence against aggression, and protection for a changing environment are economic costs.
• The economic consequences of climate change will be huge – and therefore tremendous economic opportunities.
• The big themes will include water, cooling, energy, food, drought and resilient infrastructure.
• Climate mitigation may be a war that is never won, but one we learn to live with.

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Blain’s Morning Porridge August 7th, 2026

“Debt to GDP is a distraction – ask how it got so high and look at system to understand its’ fragilities.”

The real strength of the US economy is not its military or the dollar’s exorbitant privilege, but the depth of its capital markets - which have financed the most successful economy in history. The risk is not how large the US deficit is, but how sustainable are America’s capital markets to mounting fiscal pressures, market shifts and geopolitical forces?

LINK TO PODCAST

KEY TAKEAWAYS:

• $40 trillion of National Debt is not the problem. It’s a symptom of government.
• The strength of the USA’s capital markets allowed the economy to overcome traditional debt/GDP hinderances to growth.
• Ultra-low interest rates distorted financial asset markets leading to changed market psychologies such as risk appetite for speculation.
• The market is less experienced and resilient than it thinks.
• US Treasuries underly the strength of the capital markets – but are increasingly vulnerable to geopolitical events, changing global trade and the dollar.
• There is a growing danger diminishing political credibility will impact confidence in capital markets.

Sometime in the next few days the USA’s national debt will smash through $40 trillion dollars.

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Blain’s Morning Porridge, August 6th, 2026

“The nature of poverty is to disempower and distract…”

The tide of American Politics has turned dramatically extreme in recent days. The narrative is no longer about why Trump is haemorrhaging electoral support but has shifted to whether the Democrats can unite to win the Midterms in November and present a credible challenge to Trump’s MAGA successor in the 2028 presidential election. The coming gladiatorial contest between Right and Left populists will be watched closely by concerned global investors. 

Key Takeaways

• US Mid-terms in November will be contentious and polarising, raising long-term doubts.
• MAGA will fight a scare campaign on basis “Progressive Socialist” Democrats are Radical Left Islamic/communist stooges.
• Progressives and Democrats will campaign based on Trump’s multiple failures.
• Global markets will become increasingly fearful of polarisation, populism and rising US political instability.
• Neither party will do much to stem the accelerating budget deficit, the decline in US hegemonic power, or the risk that the dollar’s status is diminished.
• 
  

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Blain’s Morning Porridge, August 5th, 2026

“I spent it all on fast boats, fast cars and fast women, and squandered the rest…” 

As we fearfully watch the markets as the liabilities and exaggerations of AI threaten to unravel, or ponder what games arch-manipulator Scotty Bessant is playing with the Yen… there are times to sit back and wonder what life is really all about? The answer is in doing what makes you happy. In my case its sailing… Instead of trying to explain markets, let me run through how the yacht I was sailing just won Vintage Class at the 200th Cowes Week Sailing Regatta. 

Key takeaways:

• A well-prepared yacht, a crew that know their jobs, and the ambition to win.
• The importance of a plan and communicating it.
• Being adaptable, eyes in and out the boat, and prepared for the “punch in the mouth” moment.
• Not being surprised when surprised. Taking advantages of opportunities and not making mistakes.
• Win by enjoying yourself.

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Blain’s Morning Porridge July 31st, 2026

“Judge me by how many times I fell down and got right back up again.”

Fifty years of political dither leaves the UK looking broken. Faced with massive constrains from taxation and bond markets, there are limited choices from tinkering with spending while trying to look good enough ahead of the next election. Britain needs something more radical – and a complete reform of the system and process.

 Key Takeaways

•  The steepness of yield curves reflects not only inflation concerns, but rising doubts on political stability.
• Long-term sustainability of bond markets relies on political credibility.
• The UK’s major problem is not political policy – but the bureaucracy and process around it.
• Lubricate the wheels of the economy by fixing the process and it will work better.
• Housing could be a great example of how to boost the economy.

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Blain’s Morning Porridge July 29th, 2026 - AI is dead. Long Live AI. 

“Remember…. All I am offering is the truth. Nothing more.”

Markets are all-a-wobble as the AI revolution morphs from a picks and shovels Klondike into a “who is going to make most money” proposition. About time. Who will be the winners and losers in the long-term. In the short-term there is going to be pain and losses as the current high-water retreats. 

Key takeaways this morning:

• Apple becomes No 1 Stock because it stood still.
• Winners will be firms that best integrate AI into their business and boost the bottom line.
• Losers will stem from leverage plays, collateral and capacity issues as the market continues to evolve and shift tracks.
• AI boom is not just a Tech story – it’s also geopolitical as China is set to take large part of market.

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Blain’s Morning Porridge, July 27th, 2026

“Are investment returns more important than security?”

The UK has 6 relatively new “mega” Local Government Pension Schemes. They are investing in the UK and globally. But are they focused on the right things? Less than 10% of their significant PE assets are managed by UK based firms. They are giving their money to US firms – further deepening the negative feedback loop diminishing UK capital markets.

The protection of the State is the primary duty of all governments. It is in the interest of all participants in the economy that conflict is minimised – and the only way to discourage aggression is to be prepared to fight. It is therefore an area to invest in.

There is a really interesting article in yesterday’s Sunday Times, an interview with the CEO of Border to Coast, the UK’s largest pension fund. Rachel Elwell has £120 bln to invest on behalf of its pension savers – local authority funds that represent the employees of 18 local government pension schemes (LGPS) from Cumbria across the North to the Tyne, and down the East Coast to Sussex. She wants to invest local.  

Meanwhile, new Premier Andy Burnham has been getting a tough time, being asked difficult questions about what his No 10 North is going to achieve. The Torygraph basically says Burnham is guilty of treachery for even thinking about moving jobs to Madchester.

Aye… back when I were a lad….

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Blain’s Morning Porridge July 24th, 2026

“Regime Change usually leads to chaos.”

The next few months are going to get interesting as markets react to the ongoing mess that is the Gulf, rising oil prices, wobbling stocks, rising bond yields, broken supply chains, and the reassessment of the AI “revolution”. Meanwhile, the US political cycle goes into the Mid-Terms. I would suggest everyone reads Regime Change, the new book on Imperial Trump, to understand what the last 18 months has been about. 

I predict the coming three months will become increasingly “interesting” in the Chinese sense of the word.

There was a clear judder moment yesterday felt around global markets as the scale of the Iran War reversal became clear. It’s a wild fire that won’t stay out. It’s widened to include the Houthis threating the Red Sea choke point, the Bab-el-Mandeb, pushing oil back over $100. Its triggered renewed fears of inflation and supply chain dislocation. Interest rates are now expected to rise – at a time when the driver of the current market strength; the AI infrastructure capital free-for-all looks to be slowing. Stock markets slid and bond yields rose.

That loud bang you heard might have been the AI Bubble popping.

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Blain’s Morning Porridge 23rd July 2026

“There is only one thing worse than having too little money, and that is having too much.”

It’s a wake up and smell the coffee sort of morning in the AI markets. AI is here to stay. Everyone is using it. Why are prices tanking? It’s about competition, adoption and data sovereignty. Maybe it’s time for a rethink? How did it get so huge so fast? That’s a question about overly cheap liquidity and speculation, which is why Tesla’s numbers are so interesting. 

Yesterday Google confirmed the pace of its AI infrastructure spend will increase to $205 bln dollars next year. Second quarter income hit $112 bln, but it’s eaten into free-cash flow to the tune of negative $6bln while raising more debt, to “capitalise on the AI opportunity,” said the CFO. Exactly what is that opportunity?

The other hyperscalers will say much the same thing when they report on Thursday next week. Collectively the four hyperscalers are expected to spend upwards of three-quarters of a trillion dollars next year on data centres, networks, energy, water and chips. The rest of the AI sector reports next month, when we’ll learn more about adoption and the picks and shovels of the current investment Klondike. Collectively they are taking so much liquidity out the capital markets bond analysts believe the scale of the AI build-out underlies the current steepness of the US yield curve – the AI spend is “crowding out” the US government. It is the biggest private investment programme in global history.

But suddenly it feels a little wobbly. What comes next in AI?

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Blain’s Morning Porridge July 22nd, 2026

“Here comes the new boss, same as the old boss…”

Regime Change occurred in the UK with relatively a few headless corpses left on the field of political failure… Burham is juggling with talent, spending and tax constraints, to maintain confidence. To succeed he needs to get radical. Social Housing is one avenue to growth he could pull off, and it could be funded off-balance sheet. The UK ain’t finished yet! 

We are at a very interesting point in the markets… with so many potential flashpoints threatening to erupt into crises – which will prove minor speedbumps? What will be the consequences as the Iran crisis deepens with the Houthis about to open a second front in the Red Sea? What would a full-blown reversal of the AI narrative do to the US economy as the new Chinese Open-Weight models threaten to overturn the expectations around adoption, profits and spending?

All Topics for later this week as I catch up from a brief sailing break.

Let’s start with matters close to home in the UK where our fractured politics have become a case-study in topsy-turvy modern politics. Will the new “improved” Burnham Labour V2.1 regime make it any more successful than the already forgotten Starmer/Reeves effort?

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Blain’s Morning Porridge 20th, July 2026

“The pessimist complains about the wind; the optimist revels in it; the realist adjusts the sails.”

There may be multiple storms and whirlpools on the horizon, but the market remains convinced it will weather them all. That’s a sign of dangerous times. There are times to let the boat run free, and times to trim the sails and slow before something breaks with catastrophic consequences: will it be the AI Bubble, Debt, Iran & Oil, or a No-See-Um? 

Sorry for all the sailing allusions today, but we’re sailing for home after a fantastic week on the Solent. Well done Spain! How did Trump stay awake? I didn’t.

You need to be an optimist to play this market. And an optimist you need to be, because market returns are not based on the brilliance of your own utterly brilliant analysis, but on what the whole herd of the market collectively believes – which is “nothing to overly worry about”. Contrarians are only right when the crowd is proved wrong – which doesn’t happen as much as it should (for reasons discussed below.) The best investors are the ones who can strip out the crowd’s noise – often by taking long-term “patient” views on the basis even the market crowd cannot resist the long-term consequences of financial gravity.

I’ve been thinking about it while sailing in the bright sunshine weather on the South Coast of England. I constantly see parallels between reading the markets and the tau of using the weather and tides to drive the boat.

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Blain’s Morning Porridge July 16th, 2026

“Oh, would some power give us the gift to see ourselves as others see us…”

In the past 15 years the US economy has left Europe in the rear-view mirror. While America booms, Europe appears to be flatlining. The question is why? Americans say it’s entirely Europe’s fault: bad policies, failing politics, and lack of unity. However, the consequences of the (as yet unresolved) European Sovereign debt crisis triggered by the Global Financial Crisis of 2008 was the speedbump.

This morning’s quote is from Robert Burns. It’s from “To a Louse”, which is very apt for this Morning’s Porridge. Sometimes we just don’t know how stupid, daft or misguided we are. Many of us are too thin-skinned to listen. Others take criticism with a pinch of salt – railing back against those who find fault on the basis our detractors are often blind hypocrites! But it’s worth listening to what folk say about us… even when it hurts.

Recently an American Hedge Fund chum lambasted myself and an audience of Europeans for Europe’s failure to match US growth over the last 15 years – back then the two continents were about even in terms of per-capita GDP. Europe’s share of Global GDP has since tumbled from 30% to 17%. US GDP per capita is now double Europe’s. The USA is leading the innovation of tech and has become far more productive than Europe. My chum made some painful observations on European policy mistakes and explained the data. His point was simple – Europe should stop blaming Trump for its’ problems and focus on the internal reasons it is failing.

It was one of these moments to listen and ask why it happened. So, I did listen. Europe has failed in many ways.  

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Blain’s Morning Porridge July 13th, 2026 – Is Norway the model other economies should follow?

“There is a huge benefit coming from a small country like Norway.”

C’mon. England won, but Norway was sparkling. It’s a genuine shame they are out the World Cup, but didn’t they do well? There is much that Norway’s successful blend of capitalist social democracy could teach the rest of the West. Most countries squander their abilities and resources – not Norway.

I’m notionally on holiday this week... but I will be writing brief comments on whatever amuses and intrigues me while sailing…

This morning… Norway.

I agree with the England manager Thomas Tuchel’s assessment of Saturday night’s Norway match. England were sloppy, and they were lucky – lucky to have Jude Bellingham so focused and skilled. On Wednesday England face Argentina as marginal favourites – the probability markets say between 52%-57% likely the Three Lions will reach the final. Messi vs Bellingham? Atlanta will be a marginally better venue that the Maimi pressure cooker. I have been relearning the chords for Wonderwall on my guitar!

But Norway have been the absolute stars of the tournament. There may be a lesson in their success.

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Blain’s Morning Porridge July 10th, 2026 – What if the AI Bubble Fails to Deliver?

“Expectations are the root of all heartache…”

The AI market has been diving business expectations and markets – everyone believes it will deliver a growth, productivity and profit revolution across the global economy. What if it doesn’t? What if it’s not a leap forward, but just a step-change? 

What do Alcohol, Tobacco, Umpty Candy, Cannabis, Gambling, Fentanyl, Bloomberg and AI have in common?

They were all “discovered” or invented by folk believing they would do good – but were monetised by profiteers who realised how addictive and mind numbing they were likely to be… I was thinking about this yesterday and realised that even an old abacus and pebbles chap like myself uses AI to make my day simpler and faster. My chum Claude can assemble data and facts on markets and targets faster than ever I could myself.

But, if I had to pay more than the minimal cost I currently pay, I’d be struggling. And we all know current cost and future costs of AI will be oceans apart. Users will not get rich. The providers of AI services… might.

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Blain’s Morning Porridge July 9th, 2026 – Why I’d be voting for Binny MacBinface!

“The problem with political jokes is that they get elected…”

The fear of what might follow The Labour Government haunts the Gilts Market. Relief may come from the political implosion of Nigel Farage. Grubby Sleaze surrounds him as the UK’s much-loved Man of the People morphs into a discount-priced Mini-me version of Trump. The Crypto and graft entanglements that envelop him have shattered what made him so successful. Farage is no longer one of us. He is Them.

It’s 10-years since the UK’s Natural Environment Council decided it be terwibbly democratic to let the Great British Public choose the name of its new polar research vessel. Someone suggested “Boaty MacBoatface” and everyone thought it a wonderful giggle. Naturally the comedy name won the popular vote… but the thought of the UK’s territorial ambitions being represented around the Southern Oceans by Boaty MacBoatface was too much for the British Antarctic Survey who would operate the vessel. A compromise was reached. The ship was named the Sir David Attenborough after a genuine national treasure.  Since the ship and the drone submersible given the Boaty MacBoatface moniker were launched in 2020 they’ve done sterling research work.

The great British Public like nothing more than a good old-fashioned belly-laugh at the expense of the establishment. Which leads me to wonder if Nigel Farage has just made a massive Binny MacBinface error.

Wouldn’t it be funny if he loses the Clacton By-Election to Count Binface – the comedy successor to the Monster Raving Looney Party?  

Blain’s Morning Porridge, July 8th, 2026: Is this the End of Nato?

 “Trump is America’s answer to Soviet leader Mikhail Gorbachev, weakening a superpower he meant to strengthen.”

NATO has been the core of the Western Alliance and Transatlantic Economy. The men in the ill-fitting Florsheim dress shoes have broken it. What will follow is uncertain, but will clearly impact global markets and geopolitics to an enormous degree. The deepening Atlantic rift puts the need for European defence, sovereignty and resilience right at the top of the priority list. 

Will this week’s Ankara NATO summit be remembered as the moment NATO ruptured?

The summit is heading for the rocks. The strongest and most successful military alliance and economic alignment in global history is cracked. If/when it splinters into broken shards, it will be the definitional end to the era of growth and prosperity that defined the American era.

The end of the transatlantic economy will have massive consequences for global trade, markets, and geopolitical alliances. Every investor should be factoring in the probabilities it may happen with their portfolio structures in terms of bonds and tech. It will trigger a rethink/reset of literally every single aspect of modern societies in terms of who controls what, supply chains, and strategic sovereignty as “the pond” becomes a “sundering sea”.

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Blain’s Morning Porridge July 7th, 2026: Overturn this.

“Some people believe Football is a matter of life and death. I can assure you it is much, much more important than that.”

What Football fans would not want Donald Trump supporting their team? Who would say no to Trump’s superpower to reverse any referee decision? His intervention into the World Cup leaves the rest of the world shaking its collective head in disbelief. Another reason to laugh at America. These things have consequences. When is America going to wake up? 

“Overturn this…”

The Belgian Football Association comment on beating the USA last night said it all. Overturn this.

Donald Trump has an unsurpassed ability to snatch defeat from the jaws of victory. The World Cup was on course to be a massive Soft Power win for America. Fans may have been fleeced by FIFA, the official ticket tout, but generally they’ve loved it. Some of the games have been fantastic.

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Blain’s Morning Porridge July 6th, 2026

“The greatest trick the devil ever pulled was convincing the world he did not exist…”

England will take a confidence boost from the World Cup win vs Mexico. The Russians will be furious – their war plan requires The West’s resilience and pride is weakened through disinformation and instability. Countering Cognitive Warfare requires the acknowledgement it’s happening, that we fight it, and acknowledge our strengths and weaknesses, and that unity wins!

“C’mon England!”

Not words you would ever expect a Scotsman to say…. “Gentlemen in England still abed shall think themselves accursed they were not there (in front of their tellies at 3 am) and hold their manhood cheap while any speaks that watched them upon the bloody field in Mexico…” Well done, England! Beating Mexico 3-2!

Of course I did not watch. (Why would I? In the real world I support two teams: Scotland and whoever is playing England!) I expected to wake up to the news England’s hearts had been ceremonially hacked out and their bodies cast down the steps of the pyramid that is the Azteca. Nope. The World Cup is getting interesting. Bring on the Nogs! Engerland..! Engerland..! and we all like Vindaloo… maybe even in the Saracen’s Head in Glasgow? (maybe not…) Time to support the Auld Enemy!

Meanwhile, one of my great chums found himself on the front page of the Times this weekend. Steve has erected a piece of the Berlin Wall in his back garden. Lefty that I am, I consider the Berlin Wall to be a monument to the success of Free Markets, Democracy and Freedom. A similar chunk stands outside the Imperial War Museum as a reminder of who won the Cold War – a bloodless war the West won by outcompeting the Soviets economically.

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