Blain’s Morning Porridge 8th February 2022 – Fake News, Markets and the Death of Democracy
“In a world where you biases are being constantly confirmed, you will be infected by fake news, propaganda and demagoguery”
This morning – Just how vulnerable are markets to an escalating distrust of politics, the death of democracy, populism, and authoritarianism, and how much of it is due to deliberate manipulation by bad actors and fake news? Uncertain in uncertain markets isn’t helping.
As I write this morning’s porridge I’m wondering if it’s a good idea to publish. I should really get down to weighing the pros and cons of Netflix, or consider how warnings of a collapse in corporate earnings and crashing emerging market spreads will accelerate my thesis from yesterday that it will be credit markets that trigger the big downturn.
Instead… lets take a risk. I will deliberately wade into politics. Every time I do I get subscription cancellations, telling me I know nothing, how biased I am, and comments like if I’m “so goddam clever, why did you get vaxxed..”. I give up on these folk.. but they matter. According to my bias, its important we try to understand why so many western voters are prepared to destroy democracy in order to save it. These same people are thinking the same things about me…
Just how much should markets worry about politics?
Does the way people are thinking about how they will vote actually matter?
Humans have bumbled along for seven thousand years of recorded history and experimented with every kind of leadership format –autocratic to democratic, messianic to committees – and we’ve still grown. No matter how bad, we’ve resisted the temptation to climb back into the trees – like Douglas Adams I wonder how big a mistake coming down in the first place was.
Transitions between the different forms of human leadership are often bloody and destructive. History shows society goes through sudden shocking chaotic phases – for a whole series of reasons.
I would hate to add to the torrent of excitable, end-of-the-world, conspiracy twaddle and nonsense you can binge-read on alt-right-wing platform…. But society is facing a potential crisis. Our faith in the politics of democracy is collapsing. The speed at which the underpinnings of society are being taken down is shocking. Shocks create uncertainty, uncertainty is bad for markets. Decency is out the proverbial window.
The problem is – it looks deliberate. Fake news media is roiling democracy. Unstable governments – as we are clearly seeing in the US and UK – can’t function and certainly won’t deliver. But, it’s not just a Anglo-Saxon problem. It’s global. The West feels like it’s trending towards populism and authoritarianism.
When I read the news out of Ukraine – about false flags, whatever – I now find myself doubting the news. My faith in the news is diminished. Without real news how can I made the decisions I’m required to make for our business?
The sight yesterday of the Leader of Her Majesty’s Opposition being attacked on the Streets of London by thugs screaming traitor, and yelling “Jimmy Saville” at him, shows fake news can replicate and spread faster than Omicron. Saville was a paedophile whose depravity, enabled by his position as a favoured “personality”, became sickeningly clear after his death.
Last week, our Premier, BumbleBlondeBoris, made the utterly baseless and unfounded accusation that Labour leader Sir Kier Starmer, while director of public prosecutions under the last Labour Government, had conspired not to prosecute Saville. The accusation was a desperate flail by the floundering prime minister, and so shocking one of his closest aides resigned in disgust at Boris’ desperate despicable deflection. Sure, the assailants were thugs – but thugs who believed the Prime Minister’s lies.
Or how about these Heroes of Liberty – the truck drivers making the lives of the Citizens of Ottawa a living nightmare. Convinced of their righteousness in Defence of Freedom, its ok for them to call for the fall of the Canadian government for its temerity in daring to protect Canadian citizens from Covid. The fact the US ambassador to Canada is warning US citizens not to inflame and impose their views on a foreign nation suggests where many of the Maple Leaf bearing trucks actually hail from.
The lesson from Canada is how the actions of a tiny minority of malcontents can be whipped into a frenzy by well placed suggestions. They now consider themselves on a crusade on the back of the popular support they think they are getting. Let’s face it – 90% of ‘Mericans and even more Canadians just want to go back to a quiet life… but if you can whip up a frenzy about how the vaccines are Billy Gates way of murdering us with 5G radio signals, and dress it up in claptrap about patriotic duty… there are enough idiots out there to believe they are virtuous…
Less than 10% of Canadians are unvaccinated, yet a relatively small number of noisy Truckers are holding Ottawa to ransom while inconveniencing hundreds of thousands of residents with their Anti-Vax demands. Supporters of “freedom” around the globe praise them for their bravery in the face of state tyranny – just like they praised the 6000 Americans who stormed the capitol last year in the misguided belief they were saving democracy by destroying it. Heaven help us from stupid…
Or maybe there is clue in how quickly Joe Rogan, the Spotify podcaster whose rambling postings so infuriated Neil Young. When some of his posts were taken down by Spotify, he received a 4-year $100mm offer from the “alt-right” Rumble steamer to host his truth and conversations. (All publicity is good publicity – apparently Neil is selling more music than even on the back of his Spotify exit, according to Hipgnosis, the song fund that paid $160mm for half his rights last year…)
Or how about the news from Israel this morning about how NSO’s Pegasus spyware has been used to hack the phones of prominent citizens protesting against the previous regime?
Fake news, disinformation and destabilisation has become an art form. Boris wielded it clumsily last week. The guys trying to take down Canadian premier, Justin Trudeau have a much clearer vision, aim and agenda.
As regular readers of the Porridge will be aware I lean to the soft left. (Its genetic – Scots come out the womb with a unshakable hatred of injustice..) The fake news I perceive is overwhelmingly from the right – but that will be because, like everyone, I have a bias to disbelief when its politics I disagree with.
Everyone will tend to agree with the political stories which agree with their belief set. I am vulnerable to left-wing fake news… In exactly the same way right-leaning chums find it easy to agree with much of what I perceive to be right-wing vitriol. It doesn’t mean they are idiots (although some are) – when they read stories about defunding the police they feel as strongly against that as I feel about police brutality. In the past there was balance. Today there is none.
I’m inclined to believe it’s a very small number of very clever, media savvy libertarians who’ve set up the Alt-right fake-news media with the express intention of destabilising modern liberal economies to make their replacement with more authoritarian permanent right-wing regimes acceptable. Other actors no doubt include the Russians and the Chinese using news to destablise the west, as we no doubt do against them.
What’s to gain from manipulating the truth? To overcome left-wing bias in favour of liberal policies like immigration, minority rights, climate change, environment and benefits and replace them with the politics of the right? Others may be working on behalf of corporate interests. Who knows, but the fake news purveyors know how to hit people’s buttons.
Fake news is a massively destabilising factor we are only now coming to understand in relation to markets.
Over the weekend I was introduced to a new portmanteau word: “Trumptardation” in the context of the Trumptardation of Western Democracy.
A fund manager in Dubai used it to describe the current disintegration process of politics across the “democratic” West. He stressed the Donald Trump presidency is but one example of collapsing democracy – he’s sees in France, the UK, across Eastern Europe, but most definitely in the US.
One aspect is how across the globe “democratic” politicians believe they are above the laws. In order to achieve “Freedom” they are increasingly willing to deny it. The result is an accelerating trend towards authoritarian government. In the UK we have a premier reinforcing his control of cabinet while taking zero responsibility for breaking lockdown diseases. In the US, a former president’s dubious tax affairs and attempt to illegally hold on to power go unprosecuted – protected by a party in thrall to his populism – punishing members of the party who disagree.
The result is gridlock. The Democrats won’t let go their fury at Trump, and the Republicans won’t acknowledge what Trump has done. Politics and repairing the US is on hold. When I read about US Trump Supporters donating to Democrat stooges, I wonder how long before the Presidency is auctioned off to the highest bidder! In France, Macron will win the coming election – but only because the right is split, meaning years more finding anyone else to blame. Europe will be riven by disputes. And the UK? United for how much longer…?
While politics isn’t markets, politics clearly affect markets. The increasing swing toward authoritarianism and populism will have significant long-term macro consequences.
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Strategist – Shard Capital