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Blain’s Morning Porridge 2nd, October 2026 “The French are a nation which believes in equality, but only with those who are above them.” The French Bond market threatens to become a crisis as yields widen and its’ politics look increasingly a zero-sum game. While we’ve been watching the antics in DC and the price of oil due to Iran, we’ve missed how swiftly a new European debt crisis has been brewing. If it deepens, it won’t be a simple repeat of 2010-12, which nearly crushed banks and triggered defaults. Europe’s second largest economy in crisis, and dispute with Frankfurt, could trigger even more massive instabilities.  Key Takeaways: ·      France could be the no-see-um that triggers a new European Debt Crisis. While we’re all aware its overborrowed, and politically unable to address the problem, the wider issue is how it could morph into a more systemic and deeper crisis for Europe and the Euro. ·      Widening bond spreads demonstrate the loss of confidence in the French politics. ·      Blain’s Sovereign Virtuous Trinity theory predicts a crisis: France’s political competency is under pressure, and its bond market looks unsustainable. The only immediate positive is the Euro is controlled from Frankfurt…  ·      That raises the issue France is not a Financial Sovereign Nation – it borrows in the Euro, a currency it does not control, nor print to bail itself out in crisis. ·      Both likely candidates in next year’s elections are Eurosceptics – raising the probabilities of a France vs ECB bust-up, damaging the Euro and stability. ·      There is a chance France enters a debt doom-loop as its yield cross the threshold into chaos – potentially triggering a very different European Sovereign Bond crisis – the last one saw smaller, peripheral nations at the centre.  ·      Europe need unity in the face of external threats, geopolitical shifts, and the Trump “betrayal” of Nato. France wants unity, but only on its terms.  Continued/ go to www.morningporridge.com for access to the full story. If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…

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. Continued/ go to www.morningporridge.com for access to the full story. If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…

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. Continued/ go to www.morningporridge.com for access to the full story. If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…

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… Continued/ go to www.morningporridge.com for access to the full story. If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…

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. Go to www.morningporridge.com for access to the full story. If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…

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!) Go to www.morningporridge.com for access to the full story. If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…

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. Go to www.morningporridge.com for access to the full story. If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…

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. Go to www.morningporridge.com for access to the full story. If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…

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. You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!

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. You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!

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. You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!

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. You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!

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. You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!

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. You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!