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.
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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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