And suddenly you are wide awake and wondering just how crazy this suddenly got…..

I am not one for conspiracy theories. But… this morning… If I was a writer of trashy global-techno-World War 3 pulp fiction, and proposed the following scenario where the global economy lurches into an unprecedented period of instability – nobody would believe me:

1)    Global Supply Chains, weakened and struggling after a year of global pandemic, plus a growing shortage of microchips holding back multiple industrial sectors, are plunged into new crisis by a puff of wind causing a box-ship to skite sideways and block the Suez Canal, trapping East-West Trade.

2)    Unstable and over-priced Global Markets are spooked into a frenzy late on a quiet Friday night by the largest margin calls ever ($20 bln plus) as an Asian “family office” dumps billions of dollars of stock into the market. Collateral damage spreads, as other financial firms, (inevitably including Credit Suisse (Switzerland’s very own Deutsche Bank), and Nomura), announce material losses.

3)    As global central banks struggle to restore real growth, while trying to hold interest rates low and support commerce, and acutely conscious of how a market crash could crush global confidence – things suddenly get more difficult as confidence in equity valuations takes a massive knock.

4)    Geopolitical stability wobbles after China lashes back at US criticism in Alaska, and then surprises Europe with sanctions and push back on trade deal – when many has expected China to attempt to reach out to Europe – even as it reaches out to pariah states including Iran, Myanmar and Turkey.

5)    Rumours abound of imminent China action to seize Taiwan – and the potential impotence of US fleets from the Gulf to the Pacific are targeted by long range Chinese carrier-killer missiles – further destabilising markets.

6)    Cyber-attacks across western economies, first uncovered at Solar Wind, but possibly undiscovered elsewhere, raise questions as to how much the West’s digital and financial infrastructure has been compromised.

What happens next?

More…