2018 Oct 13 - Stock Market Losses

There's that old joke about what's black and white and red all over, to which the answer is either a newspaper, or the corporate balance sheet of a newspaper in the digital age. Nonetheless, the leaves are starting to turn red and so were a lot of stock markets this week with the FTSE 100 dropping below 7000 points. Not to be mistaken for dropping 7000 pints, which is what Peter O'Toole and Oliver Reed and used to call a "fun weekend."

Share prices have been going up for the past 10 years and the last time we had a market crash, Prince William had a full head of hair and Netflix was a company that physically posted DVDs to you in the post. Stock market losses in the past week have been attributed to many things, the US trade war with China, Brexit uncertainty, US midterm election uncertainty not to mention the reptilian overlords that David Icke likes to write conspiracy books about. I've always thought that if he were correct and the Queen was secretly a reptile, the bedrooms at Buckingham Palace would have a lot more UV strip lighting in them.

Anyway, the economy. What is certain is that central banks have allowed an asset bubble to grow well beyond anything that can be controlled sensibly and at this point the only question is whether there will be a crash and defaults when investors realised that rates are rising and the game is up, or whether inflation will kick in with regular savers bailing out the markets and bond-holders by stealth. I was going to make an analogy of the stock market being a bit like the bus at the end of The Italian Job, except at least in the Italian Job there was a big stack of gold to help them out, and the Italians in that film still had their own currency rather than being held in bondage by political forces at the ECB.

What is also true is that whatever happens, Theresa May and President Trump will be given 100% of the blame. Or to be more specific, Trump will be 40% responsible, Theresa will be 40% responsible, Brexit 30% responsible, and the fact that those add up to well over 100% will not be entirely surprising given the academic pedigree of the armchair economists that will be invited to provide punditry to the masses. The sort of people that need to give you change when you offer them a penny for their thoughts.
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