Disorderly Market Conditions

While the media tries to sugar coat historically high inflation, an energy crisis, supply chain chaos and war on the European continent the term “Disorderly Market Conditions” have been thrown around a lot as of late. The hesitancy to call two quarters of negative growth a Recession signals much deeper problems are just beneath the surface and the lack of transparency indicates a lack of control of current world events. The case can be made that the media is trying to fight panic in the markets but at what point does optimism turn into deceit? 

Global bond markets are having their WORST YEAR EVER. This should be something that is clearly discussed, people deserve an open and honest  conversation about this but will likely not get such. Instead we will be spoon feed that Central Banks are in control (they are not) and that by raising interest rates inflation will subside and all will “go back to normal”. This rosy picture of the future is a disservice to people who rely on the media to understand what is going on in the markets. 

Disorderly market conditions is intentionally vague. There is no underlying connotation as to how markets are reacting other than unusual. Whether it is going unusually good or bad is up to each and every person to decide. Given the state of currencies like the Yen, Pound and Euro I would say that we are in the unusually bad end of the spectrum. 

Markets in England are so bad that major pension funds are at risk of becoming insolvent. The Bank of England had to bailout these funds a few weeks ago “to maintain orderly market conditions” or in other words save the market. There use to be a time where banks and major financial institutions where not subsidized by governments of the world but those days are long gone. As central banks try to walk a tight rope between tighten interest rates (fighting inflation) and keeping the financial system a float (increasing inflation) it may seem to some that the lights have been turned on, music has stopped playing and the party is over. 

The Bank of England tanked the market yesterday when saying that the bailouts are coming to an end at the end of the week and that funds need to be prepared. But is there any way that these funds can do that in this short period of time? As people come to the conclusion that conditions will only get more disorderly panic and fear will begin to spread especially if inflation does not go away. And like the lobster sitting in a pot of water on a stove unaware that it will soon boil the people won’t realize the gig is up until it is to late.