You Want It Darker

“What’s working for investors? Noth­ing. It’s really one of the worst set-ups you can think of.”

— Raphaël Thuin, Head of Capital Markets Strategies at Tikehau Capital

This, regrettably, is going to be the starkest commentary in a good while.

I say that because anywhere you look now, the picture is bleak, and I’m trying desperately to figure out how everything is going to play out, but this is a fog I have not seen since the Great Financial Crisis, though that episode had an ending which was Congress finally passing TARP and ringfencing the banking system. Figuring out how or when this war ends that has held the global economy hostage is something completely different because, let’s face it, we are not dealing with rational actors. Not only is Tehran not interested in ending this war, but now the Houthis have joined. Oil is flirting with $100 per barrel, inflation expectations are starting to climb, and bond markets are factoring in a rising fiscal risk premium.