“The fault, dear leaders, lies not in our stars but in ourselves. And Mr Market is most often the first to point it out.” (with apologies to Gaius Cassius Longinus)

There are moments when financial markets act as more than mere barometers of sentiment. They become a form of real-time accountability especially when Mr Market, the emotional, unpredictable figure introduced to us so effectively by Benjamin Graham, decides to raise his voice.

We have seen this recently amid a flurry of erratic policy shifts. Major announcements are made, reversed, reissued and amended all within days. This has left us dizzily grappling not just with economic risk, but with institutional incoherence. Volatility rises. Signals distort. And investors are obliged to build into their valuations a risk premium not only for recession or inflation but also for the unpredictability of leadership.

To this already unstable mix, we now add geopolitics. The message following the latest events in the Middle East is clear. As oil prices surge and inflation expectations shift, markets are once again reminding world leaders that geopolitical brinkmanship carries economic consequences, constraining central banks, rattling supply chains and narrowing the room for policy error.

In recent discussions with institutional investors and family offices across ASEAN, a recurring refrain has emerged: “We’re being whiplashed by decisions we didn’t make.” Whether in Singapore, Bangkok or Hanoi, the sentiment is the same. Mr Market, as ruthless as ever, may be currently reacting primarily to policy moves in Washington or Tel Aviv but the consequences are global. In Asia, where fundamentals often remain strong, the challenge lies in not being drowned out by the noise. As one CIO put it to me: “It’s hard to commit when the goalposts keep moving.”

History has shown us however that Mr Market has little patience for missteps. Think of the eurozone crisis of 2012 or the UK’s 2022 “mini-Budget” fiasco which triggered a market backlash so severe it toppled Prime Minister in weeks. These were moments when markets ruthlessly imposed discipline where politics could not.

Though Mr Market is prone to moods, he remains indifferent to power and unimpressed by spin. His judgment, though sometimes messy, usually lands where it matters most. And when all else fails, he is the only one who can be relied on to “always speak truth to power”. And that, perhaps, is the final check on policymaking when all others fail.

#mrmarket #marketdiscipline #benjamingraham #credibilitycrisis #macroeconomics #policyrisk #blackwednesday #minibudget #eurozonecrisis #bondmarkets #riskperception #diversify #geopolitics #stagflation