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.