Blain's Morning Porridge

Blain’s Morning Porridge – October 16th, 2026
“Markets are not smart or intelligent, but they are very efficient at converging on the wrong conclusions.”
It’s been a bad week in the AI markets. Suddenly folk are waking up to the growing gap between inflated expectations and disappointing revenues, and the risks which include competition. It’s a pattern that reoccurs repeatedly in markets. The name to watch will be CoreWeave – illustrating what can go wrong when blithe assumptions about fantabulous upside ignore the rules of financial commonsense. A default or troubling rescue is on the cards.
 Key Takeaways
AI is a key technology of the future, but the path to riches seldom runs smooth. The AI Investment Bubble is running well ahead of commercial adoption as businesses figure out how best to harness its power effectively and economically.
CoreWeave is the potential catalyst for an AI reset. It is the canary-in-the-coal mine showing how revenue growth is failing to cover rising debt costs.
Strong demand for AI Services in a competitive and price-inelastic market (remember the Chinese do AI too!), does not guarantee success when capex, opex and debt costs are rising – Accounting 101.
Nvidia’s infamous circularity financing of chip sales to datacentres could magnify losses. Nvidia is down nearkly $300 bln this week! It highlights the risks of being an investor in what you supply – making it a leverage play on GPU demand (which is a function of price and competition)!
A collapse in Chips could trigger a reset across the private capital markets based on the number of deals secured on chips, compute and infrastructure, now on the books of captive insurance firms.

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 15th, 2026
“Be certain that those who will betray you once will betray you again.”
Ukraine was stabbed in the back yesterday. Its defenders found their access to Starshield and Intel on incoming missile strikes suddenly blocked. Trump is saying nothing – but it's increasingly clear the orders came from POTUS. Trump is furious that Zelensky refuses to surrender Ukraine to his good chum Putin. It represents a new nadir of the Trump presidency.
Key Takeaways:
Trust in America has taken a global battering after Trump used his Kill-Switch to leave Ukraine defenceless. The alleged withdrawal of Intel and Starlink support is seen as a fundamental breach of trust by NATO allies.
It will have massive implications on future working relationships and warfighting coordination within NATO functions – European nations will never be entirely certain the US will honour its commitments.
Trump thought he would get away with sacrificing Ukraine for a short-term bolster to MAGA’s electoral prospects in the Midterms – pretending the deal with Russia would bring down diesel prices. (It will benefit his family through the deal Jared Kushner has struck to buy Lukoil!)
Instead, Trump has further unravelled the USA’s geopolitical credibility. It will have market consequences as demand for US weapons, financial services, and confidence in the dollar and Treasury market slumps as Europe faces up to America as “unreliable.”
Trump appears to have taken the decisions to deal with Russia, and to deny Ukraine intel and Starshield, without reference to his cabinet or military advisors – creating speculation he is either unfit for office, or even a Russian asset.
The coming midterms may now become a vote on Trump’s leadership and judgement. American’s can decide if what is good for Trump is good for them, or what is good for freedom and democracy is better for America in the long run.

I don’t think I have ever been this angry writing a Morning Porridge. 
The honourable American president, Franklin Delano Roosevelt, was consumed with fury when he told Congress that Dec 7th, 1941, was “a day that will live in infamy” after the Japanese sneak attack on Pearl Harbour which killed 2403 Americans – including 68 civilians.
We don’t know how many Ukrainian civilians and troops died in the last two days on the back of President Trump demonstrating America’s kill-switch.
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 14th, 2026
“All the world’s a stage – and the French like to think they are at the centre of it.”
French political instability and it’s looming fiscal crisis will distract and delay the European project of a shift towards “strategic unity” in the face of a) the immediate security threats from Russia, and b) the long-term geopolitical shift towards China at the end of the Transatlantic American age. How Europe responds to the growing French threat could determine its economic outlook for decades.
Key takeaways:
Europe must address its future and shift as the USA is exposed as an unreliable partner. It has to swiftly establish “collective independence” across defence, energy, trade and supply chains.
The ECB and EU will face substantial problems dealing with the likely French bond crisis – constrained by the French Government’s inability to agree on credible, deliverable fiscal measures, and the limited scale of stability mechanisms to address bond contagion.
The French crisis shows how limited the concept of European unity is – debates over conditions and burden sharing will dominate in coming months, rather than facing up to strategic imperatives.
The risk that Europe lapses into future economic irrelevancy is rising. The threat posed by European right-wing populist political parties, (often with obscure funding that might be Moscow-tainted), and their Anti-EU rhetoric highlights the risks Europe will fracture rather than become a stronger economic polity.
The response of EU institutions to the rising crisis will be critical if Europe is to move forward.

I’ll probably pop into one of my favourite London Bookshops (Daunts or Foyles) later this morning to pick up a copy of Unreliable Boyfriend – the new book by Canada’s former deputy president, Chrystia Freeland, about coping with the new USA. I am hoping it will give me some insights on how Europe might evolve to meet the end of the Transatlantic Era, and face up to the challenges of a new Global Order where the newly emerged nations of Asia, Africa and South America won’t be minded paying much attention to the decaying Old World of Yoorp…
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 13th, 2026
“It is not the man who has too little, but the man who craves more, that is poor.”
Should Donald Trump have won the Nobel Prize in Economics? His groundbreaking work on instability and unpredictability, and how naked greed and connections can drive economic growth and prosperity exposes the fundamental weakness of liberal, woke societies. Should economies be driven by innovation and productivity, or by political connections and favour? 
Key takeaways:
Should Donald J Trump have won the Nobel Prize in Economics?
Confident stable societies are a laudable goal – for Liberals!
Trumponomics provides proofs that liberal, woke policies stifle growth, wealth creation and prosperity – for the entrepreneurs who drive the evolution of society. Greed and the pursuit of personal wealth and power is a far more important driver of power and prosperity – and thus national success.
Notions about national prosperity should not be subordinated to private enrichment. Tax benefits, political connections, legal immunities and pardons benefit wealth creators, while “trickle-down” promises can reassure electorates and keep them in check.
Under Trumponomics foreign policy is transactional. Deals are struck in pursuit of votes and business opportunities – conflicts between public and private motivations are subordinated.
The Russian Diesel Deal is commercial genius. Trump wins votes. In return for easing sanctions, American entrepreneurs gain control of Russian oil to sell to Europe, and the economic reconstruction of Ukraine is handed to US firms. Ukraine? Sorry… who?
The bounds of Trumponomics are untested. The latest efforts to investigate a US congresswoman for immigration fraud highlight the growing political power of an authoritarian state.

Big news yesterday was Donald J Trump did not win the Nobel Prize for Economics either.
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 12th, 2026
“Be careful if America is your enemy. Be terrified if they are your friend.”
Consequences spread like ripples on a pond. Trump lobbed the bloody great rock of the Iran War into the global economy earlier this year. Now the risks he raised are converging. Inflation, Rates, Trade, Geopolitics and Conflict were thrown into stark relief over the weekend as Trump further roiled markets, and climate risks will be extra spice. How this ends is unclear… 
Key takeaways:
The consequences of the Iran war are escalating in geopolitics, rising conflict risk, inflation and trade, all putting markets under potential pressure.
The Super El-Nino threatens a further inflationary spike and could deepen trade instabilities.
Trump’s comments and US policy have further undermined the confidence and stability of the Western Alliance.
A Democrat victory in next month’s US Midterms may not solve anything except to ratchet up US political uncertainty.
Meanwhile, the left-wing in France is proposing to use “Zonk Theory” to manage down France’s unsustainable debt burden. What would work in the UK won’t work in Europe.

This morning’s photo is a container ship She-Who-Is-Mrs Blain snapped while we were sailing over the weekend. It was headed into Southampton, one of the UK’s largest ports. It’s practically empty. There are fewer containers on it than I’ve ever seen in 25 years sailing in the Solent. It may well be it’s come empty from Rotterdam to fill up – but given the state of UK exports… that’s unlikely. Global Trade has shifted. The whole point of container shipping is to stack ‘em high to keep costs down. Since the Iran War kicked off the cost of sending a container from China to Europe has tripled. That is a trade shock the world has not yet fully felt. Throw in shipping bottlenecks (and the possibility the Panama Canal will restrict passage because of drought) … and the outlook is scary.
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…