By Michael Every of Rabobank
“You’re gonna need a bigger boat” is still a classic movie scene that makes the hair on the back of my neck stand up. Clearly not just me: the meme still resonates with my generation, and John Williams’ instrumental sound of the shark still gets people my age straight out of the water.
It seems an appropriate title today given one wonders who said that about the vessel still blocking the Suez Canal: was it trying to do a U-turn? If one ever wanted to imagine what blockading the Suez Canal looked like physically, and what it would deliver to already-strained global supply chains economically, well, enjoy. This obviously risks exacerbating the cost-push inflation pressures we are already seeing in many sectors. It may also briefly refocus analysts’ attention on just how vulnerable global trade is to blockages in key logistical bottlenecks, such as the South China Sea. Just imagine if it, or the Straits of Malacca, or the Straits of Hormuz were to be subject to geopolitical disruption. It’s a good job nobody is talking about any of these things ever happening, isn’t it?
Yet back to ‘Jaws’. As a younger generation dives gleefully into the still, dark markets like the young swimmer at the start of the movie, one can hear that fateful daaa dum; daaaa dum.
Consider, for example, the picture presented by Bloomberg this morning --“This Sounds Like a Bubble Bursting”-- underlining that “the most frothy part of tech stocks continues to bleed.” For goodness’ sakes, don’t get any blood in the water!
Apparently US tech firms that haven’t made any profits dropped...