Blain’s Morning Porridge 17th December 2025 – Bitcoin and Crypto Further Detach from Reality.
“If you don’t believe it, I’m not going to waste time trying to convince you.”
Global Markets surge ahead. Bitcoin has been left behind. Yet again the crypto bubble has popped. All that’s holding it up is buy-the-dip greater fools, hope and belief – none of which are strategies for success. Time for a reassessment of what Bitcoin is and isn’t, and why it’s time to stop wasting energy on it!
Christmas is traditionally a time of goodwill to all men – even the shills of the Crypto World.
I’ve been thinking what I can possibly do to help them at this time of festive joy? Should I give them a dopamine hit by telling them everything is fine, this is just a speed-bump -and not to worry because increasing global international adoption of crypto assets means eternal upside? Or should I gift them some tough love – by telling them the truth? How do you tell true believers they are worshipping false idols, and Crypto is all absolute bollchocks?
Bitcoin is down 20% on the year, and 30% down from its October peak. Trump’s memecon is worth a tad more than the square root of f***all. As it tumbles, the BTC Treasury concept pops, Gold rises, and stocks remain solid – it’s demonstrated, yet again, that Bitcoin does not store value, isn’t linked to the economy, and is not a digital safe haven. And don’t tell me its Energy – that’s utter bunkum.
The reality is Crypto is worth only what the market believes it’s worth – which isn’t as much as it was. And, in recent months the decline in its prices has confirmed Bitcoin is now wholly divorced from the direction of global markets.
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Blain’s Morning Porridge 16th December, 2025: The New Economics and Investibility of Defence
“The war was started by career soldiers, but will be finished by teachers, engineers and accountants.”
Ukraine has demonstrated massive changes in how future wars will be fought. Yet, the military bureaucracies of Western Nations are mired in the procurement-treacle of 80 years of peacetime spending. It’s time for radical overhaul, and an explosion of private-funding to build a stronger Western economy through aggressive deterrence.
One of the big market themes I’ve been drawn to is the rising threat of conflict involving what is left of the now fracturing Western Alliance. That’s why I’m now an Advisor to Spitfire Strategic Capital – a highly innovative defence fund. If you had asked me if a general European War was likely 5-years ago, I would have laughed. Today – it’s a substantial economic risk that could swamp supply chains, economies and markets. The World changes faster than we think.
The most basic duty of any state is security. Europe and the UK are guilty of failure. As the USA retreats from foreign entanglements, it’s time for a massive European policy shift to be seen to be acting with purpose and alignment.
The threat is very real. Yesterday the new head of Britain’s MI6, Blaise Metreweli, warned Russia is deliberately prolonging the war in Ukraine, and has no intention of signing any peace deal. She described how the UK and Europe are in a grey area, caught between peace and war with “an aggressive, expansionist and revisionist” Russia as Putin tests the limits across Nato through cyber-attacks, sabotage and drone intrusions. The head of the UK’s defence staff, Air Chief Marshal Richard Knighton, later warned of coming conflict in Europe that will require similar sacrifices as were made in the second World War, and that the UK is woefully underprepared.
The war in Ukraine has taught many lessons. Everyone will be familiar with the leaps in drone technology. The new economics of warfare – the unsustainability of spending millions on an interceptor missile to shoot down a drone costing a few hundred of dollars when the enemy is mounting swarm attacks numbered in the thousands, and the entire inventory of missile inceptors is measured in dozens – is brutal. Ukrainian pop-up factories close to the frontlines churn out thousands of attack drones each day – but it takes months to build expensive interceptors.
It's not just drone warfare that’s experienced a paradigm shift. The whole defence sector is unrecognisable from just a decade ago. Invention and innovation leap forward in times of war.
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Blain’s Morning Porridge Dec 15th 2025: Some Big themes for 2026?
“Santa Baby, one thing I forgot, a yacht and the deeds to a platinum mine…”
The Chinese curse about living in “interesting times” is a boon to anyone fascinated by markets. There is no shortage of excitement coming our way next year – everything from conflict threats, renewed inflation, the return of QE, to the Space X IPO. But the thing is… we really don’t know….. we never have!
Being a market commentator comes with a terrible cost – the numbing fear that strikes at 4 am that there is nothing to write about! Dull, boring, predictable markets might be great for bond investors – but they are the curse of the markets’ chattering classes who seek to describe what’s occurring.
Thankfully…. There is no shortage of stuff to write about these days.
There are so many different levels to markets – from the over-arching macro themes of geopolitics, economics, growth, commodities, liquidity and policy & politics, right down to the individual narratives driving individual stocks and bonds. Then there are the themes that weave across markets – like the “speculation on speculation” that drives the crypto markets, or the effects and consequences of how inflationary expectations will impact markets. And the capacity of people to fool themselves and others never ceases to surprise me.
We may be living in an age where General Artificial Intelligence is nearly upon us, when Quantum Computing may shortly crack the biggest problems of health, wealth and prosperity, and Energy is key to everything, but fundamentally…. We are still a bunch of primates recently (in geological terms) out the trees, whose brains are programmed to fight or flight a pride of lions or the hiss of a snake. We obey emotions triggered by dopamine, serotonin, and hormone FOMO – the most powerful force in the financial markets: the Fear of Missing Out. We crave love and companionship, but worship the crass greed of success.
We are not as clever as we think. On that basis… what to expect in 2026?
Blain’s Morning Porridge Dec 12th, 2025 – Outlook 2026: Conflict or Trade?
“The earth is littered with the ruins of empires that once believed they were eternal.”
2026 Outlooks contain rosy predictions for stock market upside, calmer bond markets, the triumph of AI, and even a few who still say Bitcoin will rule us all. But the major Macro risk will be global trade – what happens as China and the USA face off? Trump has fractured the Western Alliances even as China’s trade and military strength give it all the options. What will Emperor Xi choose to do?
It is the time of the year for guessing what might happen next….
I have no crystal ball. All I can do is perceive the world through a glass, darkly – based on insights from friends and clients (who are often both). This morning I’m going to paint a Global Macro scenario that is already in play – triggered by Trump’s careless unravelling of the Western Alliances. If it plays through, it will utterly change markets.
It’s one I personally believe will set a tone of heightened market risk for the coming years. There are three critical ingredients to this outlook:
You will notice America does not feature. President Trump has played his hand and accelerated the coming economic and, perhaps, kinetic conflict. What matters now is how other nations now play the cards they’ve been dealt in the Great Game of Geopolitics.
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Blain’s Morning Porridge Dec 11th, 2025 – The US economy, Potemkin Markets and QE
“The IQ of a mob is the IQ of the dumbest member divided by the number of the crowd.”
Y’day we had yet another Judder Moment for markets as the Fed surrendered to Trump and prepares to juice the markets with renewed QE. Have we learnt nothing? No, I guess we have not. Pretend and keep pretending as we enter the Potemkin Economy era. This will not end well.
LINK TO PODCAST
What should we make of yesterday’s Fed Meeting? A cut in Fed Funds to 3.50-3.75%. Huzzah! Ah, the madness of crowds… “Oh no, here we go again” said the bowl of petunias.
What we witnessed at yesterday’s Fed meeting was extraordinary. A bunch of academics debating angels on a pinhead while under the presidential cosh? Were they thinking about their role as the guardians of price stability and job security.. or were they focused on the political trend. Lots of talk about elevated risks to inflation and jobs.. but lots of what looked like dither and analysis paralysis.
In the ongoing absence of tangible and real data, and current politics.… lots to argue about. It’s clear what the president wants – lower rates to keep juicing the stock market into the Mid-Terms in 11 months time.. A strong stock market looks like a strong America. Simple As.
Welcome to the Potemkin Political Economy…
Blain’s Morning Porridge Dec 9th, 2025 – What does new US Security Strategy mean for Markets and Outlook?
“For he on honey-dew hath fed, and drunk the milk of Paradise.”
The new US National Security Strategy (NSS) revealed last week confirms just how much the world has changed. It was a kick in the teeth for Europe and leaves the door ajar on Taiwan. It’s unlikely to foster stability. It increases the pressure on Europe to swiftly rearm, and unify its defence and deterrence capabilities. For America – it raises fundamental questions about its declining power, strength, might and economic outlook.
A number of Porridge Readers asked yesterday why I hadn’t commented on President Trump’s new US National Security Strategy (NSS) yesterday. The Strategy was released last Thursday, but given my close involvement with Spitfire Strategic Capital, the hybrid PE/Defence Fund, I held off till I’d discussed it with the Fund Principals.(For the record: The comments below are entirely my own, and don’t represent the views of the Fund.)
The US NSS puts the recent launch of the Spitfire Fund into an even more urgent context. As others have commented, “it could have been authored by Putin.” Europe now has even less time to rebuild its defensive capabilities and prepare itself for decades of crisis. The only way it will survive is through deterrence and being prepared against multiple threats – Russia is the immediately obvious one. Others will be coming.
Sadly, I am utterly unconvinced European governments collectively appreciate the urgency and scale of the threat facing them. They are still failing to prioritise the urgency of new defence spending.
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Blain’s Morning Porridge Dec 8th, 2025 – Markets, TheGlobal Economy and the ‘26 US Midterms.
“It’s all about the economy, stupid…”
This week will see the Fed ease rates, stocks will rally on happyretail buying any dip, and everyone will go into the holidays joyful… Except they won’t. There is so much still bubbling under the hood of the US economy that can go “bang”. Don’t watch the USA – watch China for clues.
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Blain’s Morning Porridge Dec 4th, 2025 – Hans-Jeorge Rudloff could teach us much about markets…
“When the Eurobond market exploded, it made London the centre of the world…”
This is not an obituary – but a story about markets. Hans-Jeorge Rudloff, who passed away earlier this week, was the dominant figure of the Eurobond market. His insights and vision were extraordinary – understanding how marketsworked, how to dominate them, and setting the foundations for today’s $120 trillion global market!
Yesterday one of my chums and market mentors called me with the news Hans-Jeorge Rudloff, one of the founding fathers of the Euromarkets, had passed away on Monday. Between us, my friend and I must have over 90 years of market experience, but we both owe our careers and success to the market that Rudloffand a small number of others created.
In 1985 – when I first started bothering my betters in finance - the Eurobond market funded around $165 bln in new debt. It was young and developing - the rules were being made up as it developed, but it was tremendously exciting. In its first 2 decades (from 1963) the Euro-market had grown from zero to 10% of global market debt capacity of a couple of trillion dollars!
Today, the Global bond markets are a $120 trillion plus phenomena! There are multiple subsets of the fixed income markets – most of which thrive. Asia is set to overtake the USA as the largest component of fixed income flows later this decade.
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Blain’s Morning Porridge Dec 3rd, 2025 – Pantomime, King Rat, and Outrageous Predictions
"It’s behind you, oh no it isn’t!”
What’s not to like about Panto? Saxo Bank’s excellent Outrageous Predictions for 2026 are out.. Lets dig into why Sir Keir Starmer might consider rejoining Europe to peeve Nigel Farage, how China will dominate trade through Tech and a gold-linked Yuan, and why SpaceX is unlikely to be the first $1 trillion IPO.
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Blain’s Morning Porridge Dec 2nd 2025 – AI isn’t a bubble, it’s Tech evolution evolving
“The new, new thing will always be superseded by the next new, new thing…”
Michael Burry is not out. His Stuffed Turkey comments sound like a prophesy. AI is evolving fast and not necessarily in the direction the current market understands. Bewareno-see-ums. What if the current tech is a dead end, and the financials collapse? A big shift may become clear in coming months… and where to invest next!And let’s talk about bit-flips!
Blain’s Morning Porridge Dec 2nd 2025 – AI isn’t a bubble, it’s Tech evolution evolving
“The new, new thing will always be superseded by the next new, new thing…”
Michael Burry is not out. His Stuffed Turkey comments sound like a prophesy. AI is evolving fast and not necessarily in the direction the current market understands. Bewareno-see-ums. What if the current tech is a dead end, and the financials collapse? A big shift may become clear in coming months… and where to invest next! And let’s talk about bit-flips!
But first…. A couple of days ago I posited the shelf-life on the UK’s Office for Budget Responsibility looked close to its expiry date. When the organisation that is supposed to exude market stability becomes the cause of instability…. Then it’s time to move on. The resignation of Richard Hughes had an inevitabilityabout it… The question for markets will be the independence of what follows…
Back in the real world… I’m trying to work out if there is still time for a major market shocker ahead of the holiday? Perhaps. Bitcon looks a complete flush – but if you’re a regular Porridge reader, you already knew that. The pressure on Govt bonds is relentless. Japan is…. interesting. Could it yet be AI?
The thing about investing in Technology is whatever you buy will eventually be obsolete. The cycle from new bright shiny new new thing to forgotten in a desk drawer is getting shorter and shorter. This morning its Nvidia. What will it be by lunchtime?
Blain’s Morning Porridge – December 1st, 2025: Gilts indicate Stability – what is generating the noise?
There are lies, damned lies, statistics, and the Torygraph – where even Lucifer fears to tread.”
There is a lot of noise in Gilts these days. The danger is it derails national confidence – even though much of the clamour is twaddle. The reality is all Governments face challenges, but the UK’s Gilts market is much stronger and more resilient that the right-wing press would care to admit.
The most famous quote about bond markets is “I want to come back as the bond markets. You can intimidate everybody.” Its ascribed to James Carville, Bill Clinton’s lead political strategist. Back in its heyday it recognised the supposed threat Bond Vigilantes hold over bonds – picturing them as a bandof furies ready to leap upon governments or financial authorities on any sign of foolishness, backsliding or bad policy.
Given all the noise about the UK government budget there are many who think a UK Bond crisis is imminent. Relax – ignore the noise, understand where it is coming from (and why), and be analytical about it.
Let’s start by asking how the market reacted to the budget? No stress. No Drama. Yields tightened. Markets accepted it for what it was – best of a bad job. Yet, the weekend was full of yet more drama, and the predicable hypocrisy of failed politicians demanding heads for doing what they would have done.
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Blain’s Morning Porridge Nov 27th 2025 – Bond Markets, Inflation and Economic Dementia
“I find it fascinating the chainsaw has become an emblem of a new golden era of humanity”
The UK survived yesterday’s Pretend and Extend budget. It was a lacklustre soap-opera moment. It won’t cure the UK’s long-term issues or fix Broken Britain. If politicianswere serious about repairing the political economy of the UK – it’s time for root and branch surgery on the “frictions” that leave the nation suffering Economic Dementia!
Yesterday, all economic life of the UK did not suddenly end. The economy did not fizzle away in a puff of irrefutable budget logic. Millions of UK employees did not self-combust as a result of tax changes. The political economy of the nation did not breakdown as angry mobs stormed Whitehall.
We survived a budget.
Markets dancing hard ahead of the hangover
“Beware markets full of absolute fabrications presented as irrefutable truths.”
Markets drunk on expectations and hype will believe what they want to believe – but as bubbles pop and truths are exposed, then sentiment can shift suddenly. Yesterday’smarket darlings become today’s scams. Who knew? Relax. The sun will come up tomorrow. Enjoy the show.
Sometimes you just have to laugh at the narratives markets are prepared to believe. Bubbles are a feature of markets, and they all pop eventually. Don’t panic and don’t lose heart – you favourite bubble might pop today, but a new one will emerge tolose your shirt on tomorrow. It’s not the end of the world – unless you’re 6 times levered on Strategy…. The equivalent of Thunder White Cider and a couple of tabs at a wild party, perhaps?
Some folk are gamblers. Some folk are realists. Which are you today? What will your head feel like when the party stops?
The end of the American Age – what will follow?
“Let me die in the uniform in which I fought my battles for freedom, may God forgive me for putting on another.”
The end of the exceptional American Century is happening faster than we think. America is dispensing with friends and allies, and American Tech leadership is no longer unquestioned. It spells rising instability and threats. Defence has never been more critical as Europe seeks to define its future.
Sometime in the next few years markets will be forced to make a fundamental reassessment of macro-market themes based what will follow the American age. History shows Empires rotate on a 2K cycle – every 100-120 years or – often accompanied by conflict. What comes next will literally change everything – and it will require market participants to be prepared and be nimbleand swift. History shows all Empires rise, mature and are replaced by the next one – it’s inevitable economic evolution.
The American age has been exceptional. We’ve seen incredible technological advances, rising health and prosperity, enabled by an explosion of global trade – but now it’s in its end-phase. The world’s population has quadrupled from 2 billion in 1925 to 8 billion today, as advances in medicine, agriculture, andresources became readily available. The last 80-years have seen a relatively more peaceful and stable world avoiding mass conflict of the scale that previously decimated populations.
If it’s not AI, will it be Private Capital Markets that trigger crisis?
“Private Capital Markets thrive because other markets arerun by compliance and over-regulated.”
Markets are less fragile than we think. There are always people watching, waiting and ready to catch bargains. Some risks are in plain sight. But in Private Capital Markets they are hidden – which is why many market players believe the scale of losses might be hidden. Will Private Markets trigger the next crisis? I doubt it.
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Scotland, Kilts and Fitba’, has the world gone mad?
“We’re on the march wi’ Ally’s Army… we’ll really shakeem up when we win the World Cup…”
The world has gone mad, but fear not, Scotland qualifying for the World Cup will trigger growth, prosperity and happiness (for a wee while – 3 games I expect). The imminent launch of Scottish KILTS bonds will open a Pandora’s box of difficult questions.
Forget the impending bubble pop in AI. Fear not the loomingcredit bust that is Private Credit. Be unconcerned about Japanese bond yields starting to spike. Sleep sound as bitcoin proves as hollow, pointless and scammy as I always said it was. Ignore the possibility a global inflationary impulse is about to sink bond markets triggering global market mayhem.
The clearest signs yet of absolute irrational market exuberanceis about to hit are to be found in two improbable things before breakfast:
Scotland has qualified for the World Cup next year – 47 years after the greatest World Cup goal in the history of the Galaxy,Archie Gemmill vs Holland in the Argentina World Cup, and 27 years after Scotland had the temerity to score vs Brazil in the 1998 cup (I was there), finally there is a chance Football will be coming home to where it belongs… Hampden.
Even more improbably…. my team, Heart of Midlothian, (The Jambos) the perennial10th best team in a two-team league, isleading the Scottish Premier League, and hasn’t lost a game this season! They are 7 points clear of the mighty Celtic.
And to cap it all, Scotland nearly beat the magnificent AllBlacks last weekend at Rugby. (We won’t mention how they snatched a humiliating defeat from certain victory against the Pumas on Saturday.)
What has this got to do with markets you are thinking?
LOTS.. lets talk about KILTS.
“It’s the end of the world all over again…”
Headlines about a deepening stock sell off, the rising fear” gauge, and unsustainable valuations, are dominating the news flow. Relax. End of the world market crashes happen all the time. Sit back and enjoy the show. Get your buying boots ready.
“No company is going to be immune , including us” saidSundar Pichai of Google. Peter Theil has sold out of Nvidia. When one of my chums, a “creative” up in London, asked on Sunday if she should invest in AI, you know it’s way too late. Even the BBC has noticed the AI bubble might be a bust…
But it won’t be the end of the World… Something new will emerge.
There was a time, not long ago, when calling the end of theAI bubble would have made me a contrarian. Not anymore. It’s the new consensus. Before launching into this morning’s Porridge on why AI is going to become a massively profitable utility post the inevitable correction. Let me just post a warning: There is a chance… a small one, that a market correction nowdevelops into something much, much worse that will trigger bond markets and global chaos…. but why worry now about something we’re only going to have to worry about later…
This morning its AI is Dead, Long Live AI!
In bonds there is truth – at least there was until politicalcampaigners realised what a powerful tool they might be to amplify political failure. Destabilising markets by roiling bonds is unlikely to end well. The consequences could be fearful.
Something snapped last week in Gilts, the UK’s GovernmentBond market. Normally I would call a sudden wobble in sentiment as a judder-moment, when something critical happens – like an athlete’s hamstring tearing – underminesconfidence and impacts market direction. Last week it was a succession of events suddenly overwhelming the market’s confidence in the Labour Government.
But…. I smell a rat. Lots of them.
I see my self-appointed job writing the Morning Porridge as cutting through the Noise to get to the Signal. At the risk of peeving lots of Tory and Reform readers, let me say what I suspect. I think what we are seeing in Gilts is a result of deliberate misinformation and deflection. I reckon the government is being overwhelmed by a deliberate programme of Weaponising the Gilts Market to undermine confidence.
When strange things happen, ask who benefits. In this case, theDark Minds of the Right Wing, who see what has been achieved in the USA, spotted the opportunity to undermine government. They don’t seek to boost the now largely irrelevant and clueless Tories, but Reform, who are, as yet, blank policy pages to be written on. They intend to be filling in these policy blanks.
The Right Wing weaponizing the Gilts Market is a pretty bigcharge to start off Monday morning. Some may think I’ve gone full foil-hat conspiracy theorist, but let’s go with it…
How low will Bitcoin go this time?
“Trading is playing market sentiment. Investment is aboutpredicting the future.”
Bitcoin believers are perfectly entitled to believe what they want to believe. The rest of us: too clever to fall for the hype, ortoo stupid to understand – depending on your perspective, have grandstand seats for the BTC “how low will it go this time” championship.
Bitcoin is the ultimate trading asset. It is the pure essenceof what a perfect market could be – a refined distillation of the beliefs and sentiment underlying it. BTC is largely untroubled by the difficult base questions that distort other assets, distractions such as the economy, monetary or fiscal developments, conflict and noise. At least that’s what it likes us to think.
For an asset class that is supposed to be defi from trad money and the ructions caused by the evils of fiat monetary manipulation, Bitcoin is highly correlated to traditional market weaknesses!