Markets in a Permanent Mini-Crisis: Why Investors Are Waiting, Not Predicting

Summary

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Merryn Talks Money: “Markets in a Permanent Mini-Crisis: Why Investors Are Waiting, Not Predicting”

Bloomberg — April 24, 2026
Host: Merryn Somerset Webb
Guest: John Stevig, Senior Reporter & Author of the Money Distilled Newsletter

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Episode Overview

This episode dives into the persistent state of uncertainty in global markets, exploring how geopolitical conflicts and economic jitters have altered investor behavior. Merryn Somerset Webb and John Stevig discuss how markets are no longer so quick to “price in” future risks, but are waiting for tangible impacts before reacting. They also dissect the peculiar divide between gloomy consumer sentiment and surprising pockets of economic resilience in the UK, and look at current pension investment policies and their implications. Throughout, the tone is conversational—mingling wry humor and realism about the “mini-crises” that seem now to be a feature, rather than a bug, of modern investing.

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Key Discussion Points & Insights

1. Are We Now in a Permanent State of Mini-Crisis?

[02:30 – 04:12]

• Market Backdrop: Ongoing international tensions (Middle East conflict involving Iran and the unpredictability of actors like Trump) have not escalated to “constant bombing”—instead, we’re stuck in “a constant mini-crisis, [where] no one knows quite what’s going on.” (Webb, 02:39)

• Stuck in a Messy ‘Off Ramp’: Both sides (Iran, Western powers) seem to want to dial down conflict but can’t agree on how. Markets “have to work around that.” (Webb, 03:32)

• Key Quote:

  “We’re not in an extreme crisis mode...we’re in a constant mini-crisis, no one knows quite what’s going on. Rolling mode, which is totally different.”
  — Merryn Somerset Webb [02:39]

• Doom & Gloom vs. Optimism:

  “People love a bit of doom and gloom.”
  — John Stevig [04:22]

2. Market Reactions: From Predictive to Reactive

[04:12 – 07:48]

• Shocks Highlight New Uncertainty:

  • UK house builder Chris Nicholson gave a shock profit warning after recently sounding optimistic; share price dropped 35% in a day.
  • Reckitt Benckiser (consumer goods) warned Middle East disruptions are now hurting sales; shares fell 5%.

• Markets Now Wait for ‘Prove It’ Moments:

  “The market can’t really put a price on stuff until it starts to see the impact coming through...There is no way to put a price on it.”
  — John Stevig [05:24]

• Shortening Time Horizons:

  • Markets once priced in the future, now they react to the present.
  • The “predictability horizon...has shrunk massively”—we live in a “short duration world”. (Stevig, 06:48)
  • Tie-back to the 2010s, when low interest rates made the future feel more predictable.

• Key Quote:

  “Now you’re suggesting there’s this different environment. The market is not pricing things in, it’s waiting till things actually happen. It’s not predictive, it’s reactive to reality.”
  — Merryn Somerset Webb [06:21]

3. UK Economy: Data Beats the Mood

[07:48 – 12:13]

• Recent Good News (with Caveats):

  • Slightly better-than-expected GDP growth in February (pre-war)
  • Fall in UK unemployment, possibly due to discouraged workers leaving the workforce
  • UK budget deficit at a three-year low, but only because of a tax spike—debt remains high

• Bad Sentiment Outpaces Facts:

  • Business activity surveys (PMIs) are surprisingly positive for April.
  • Yet, consumer confidence is at historic lows, “gloomier than ahead of 2008 [or] 1979.”

• Inflation at the Core:

  “I think inflation is probably the big driver of most people’s misery because everyone feels poor and...doesn’t see things getting any better. But the underlying economy is not too bad.”
  — John Stevig [09:18]

• Housing Market Stress:

  • Hard for homeowners to accept falling prices after years of assuming continued growth.
  • Many would-be sellers have seen no real gains over years, once inflation-adjusted.

  “People have spent so long thinking that their house is worth X...they haven’t actually made any money in real terms.”
  — John Stevig [11:33]

• Potential for Optimism?

  • Household balance sheets are, in numbers, strong after deleveraging—but nobody feels confident enough to spend or invest.
  • “If [households] were to feel confident, a lot of good economic stuff could happen in the UK, but they really, really don’t.” (Webb, 12:13)

4. Pension Fund Mandation Debate

[13:03 – 16:44]

• Mansion House Accord: Government pressuring pension funds to invest a set percentage in private assets (10%), with at least 5% in the UK.

• House of Lords Pushback:

  • Lords reject clauses allowing government to force such allocations—in defense of pension trustees’ autonomy.

  “It’s nice to see that someone’s at least attempting to defend…our freedom to invest in what we feel we should be investing in.”
  — John Stevig [13:03]

• Potential Consequences:

  • Risk that mandated allocations would lead to bad investment decisions or even losses if private assets must be sold at a discount in downturns.

• Key Quote:

  “We can tell them to invest in anything at all. The House of Lords thankfully kicked that back and said, no chance, that’s not happening.”
  — John Stevig [13:03]

5. Pensions, Liquidity & Risks of Private Assets

[15:00 – 17:27]

• Liquidity Warning: Regulators warn pension funds about the cost (and losses) of selling illiquid private assets under pressure.

  “It’s not a cost, it’s a loss.”
  — John Stevig [16:00]

• Private Credit Is Not a Panacea:
  • Recent analysis suggests poor returns ahead for private credit, even if it isn’t the next big crisis.
  • Transparency and awareness of what is in your pension fund are vital.

  “People need to just take responsibility for knowing what's in their pension because otherwise no one else is going to do it for you.”
  — John Stevig [17:18]

6. Ending on a Lighter Note

[17:27 – 18:58]

• The Only Certainty Is the Weather
  • After a heavy discussion, the hosts laugh about the sun shining as a rare sign of good news.
• Looking Ahead:
  • Next episode will feature Andy Haldane (former Bank of England economist), who brings more grounds for optimism about the UK economy.

  “There’s so much going on underneath all the misery that the future could be bright if only we had a competent government.”
  — Merryn Somerset Webb [17:43]

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Notable Quotes & Memorable Moments

• “We’re in a constant mini-crisis, no one knows quite what’s going on.”
  — Merryn Somerset Webb [02:39]

• “The market is now at the point where it can’t really put a price on stuff until it starts to see the impact coming through.”
  — John Stevig [05:24]

• “It’s a kind of short duration world...nobody knows what’s going to happen next.”
  — John Stevig [06:48]

• “Sentiment indicators are just off the charts bad... people are gloomier than they were ahead of 2008.”
  — John Stevig [09:18]

• “People need to just take responsibility for knowing what’s in their pension because otherwise no one else is going to do it for you.”
  — John Stevig [17:18]

• Ending banter:

  “The sun’s out.”
  “I can’t even see the sun shining.”
  — John Stevig & Merryn Somerset Webb [17:33–17:43]

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Timestamps for Major Segments

• Permanent Mini-Crisis / Geopolitics: 02:30–04:12
• Market Reactions & “Prove It” Moments: 04:12–07:48
• UK Economy: Data vs. Mood: 07:48–12:13
• Pension Mandation / House of Lords: 13:03–14:53
• Pension Fund Liquidity & Private Credit Risks: 15:00–17:27
• Closing Optimism: 17:27–18:58

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For those seeking deeper insights into market psychology during turbulent times, UK macro trends, and evolving pension policy, this episode provides a candid, witty, and useful analysis.

Transcript

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Bloomberg Audio Studios Podcasts Radio News.

[Merrin Sumset Webb]

Welcome to the Marant Talks Money Market Wrap, where we talk about the biggest moves in the markets this week and what is driving them. I am Merrin Sumset Webb, Editor at Large for Bloomberg UK wealth, and I'm

[John Stevig]

Join Stevig, senior reporter and author of the Money Distilled newsletter.

[Merrin Sumset Webb]

Morning, John.

[John Stevig]

Morning man.

[Merrin Sumset Webb]

Morning, John. I think it's morning, John. I'm not even sure anymore whether this is a truce day or not a truce day.

[John Stevig]

Well, basically I just look at what's happening in the market and the oil price today is up, so it must be a war on day.

[Merrin Sumset Webb]

It's a war on day, not a war on day. Okay, so here is the question then. Is this just where we are now? We're now in. We're not in an extreme crisis mode when it comes to war, not in a constant let's all bomb each other mode. We're in a const mini crisis, no one knows quite what's going on. Rolling mode, which is totally different.

[John Stevig]

I mean, I suppose that's one way to put it. Again, the state of permanent kind of hubbub.

[Merrin Sumset Webb]

A state of permanent hubbub, but not necessarily a state of permanent war.

[John Stevig]

Yeah, I mean, well, I guess the problem here is that everyone wants an off ramp, but the two sides can't agree on a satisfactory or off ramp.

[Merrin Sumset Webb]

Yes, but that rather suggests that we're on a very, very, very long, super messy off ramp.

[John Stevig]

Yeah, I think everyone wants one.

[Merrin Sumset Webb]

Both sides kind of. No one really wants to keep going. Iran doesn't really get one to get too much more involved with irritating someone who's so unpredictable, so provocative, et cetera. And Trump is a bit nervous about taking anything further in case the oil supply lob run really does get very severe. So everyone kind of wants to offer up. No one wants to agree to everything. But so we are on one, just a slightly abnormal one and somehow markets have to work around that. But if markets are supposed to look at the. Look to the long term, maybe markets are right about kind of ignoring it all. If we are on an elongated long

[John Stevig]

off ramp, honestly, I think that's a little bit too upbeat,

[Merrin Sumset Webb]

John. I'm trying to make this podcast more upbeat.

[John Stevig]

I don't know, people love a bit of doom and gloom. No, I think that actually I was looking at markets this week, so the UK particularly, and something I noticed was there was a couple of significant profit warnings and one was from Chris Nicholson, which is a house builder. And basically last month they said it looked as if things were fine and the end of last month, so the war had been running for about a month and they said it's basically okay, you don't need to worry. And then this month they came out with a trading update. They basically said, well actually, no, things have actually turned down quite a bit and now we're going to. It doesn't look as if we're going to sell any land this year and also our profit is going to be much lower than we expected because we're going to have to rein everything in. And the share price fell something like 35% in a day. And then you had big consumer goods group Reckitt Bencaser, they came out now their share price has been falling since February, but on the day they fell by another 5% because they said the disruption in the Middle east has hit our sales like, for like sales much lower than they expected. And I think what this kind of drives home is that the market is now at the point where it can't really put a price on stuff until it starts to see the impact coming through. And I think that's the problem. We sort of sit there and it's so reflective. It's like we look at the prices and we say, well, the market's not so it can't be that bad. But the, but the market is waiting to get data from the real world because it's kind of like, well, you know, how do we know what's going to happen next? There is no way to put a price on it. So I think we're just going to keep seeing this as the bad data feeds through. Maybe some of the kind of impacts that we thought we were going to see earlier on will start to happen because, you know, basically you need a kind of prove it moment, particularly because everyone's got conditioned.

[Merrin Sumset Webb]

This is very different to how I think we've thought of markets in the past. We thought of markets as being a predictive machine to a degree. You know, not everything is priced in always, of course it isn't, that would be a ridiculous idea. But quite often you think, well, you know, market participants are pretty clever and they're pricing a lot of stuff in an advance. And now you're suggesting there's this different environment the market is not pricing things in, it's waiting till things actually happen. It's not predictive, it's reactive to reality.

[John Stevig]

Well, I guess it ties in with this overall thing that whatever the 2010s were like the long duration decade, basically time didn't matter and that was partly tied up with interest rates. The far future, if you were going to make a load of money in the far future, that was worth as much as making a load of money tomorrow. You bought the companies that were going to make a lot of money in the far future because the future seemed predictable. Whereas I think the predictability horizon of the world generally has shrunk to like massively. So it's a kind of short duration world. And that's also reflected in the market's sense of visibility if you want to get highfalutin about it. Otherwise you could just say nobody knows what's going to happen next, particularly whenever, you know, Trump or the Iranians can turn around and see something completely different from day to day. So I just think the market is, it's rational that the market's discounting ability has shrunk massively.

[Merrin Sumset Webb]

And then I Wanted to talk very briefly about the UK and that we've been very positive on the UK stock market but very negative on the UK economy and I remain pretty negative on the UK economy, in fact very negative on the UK economy, but there have been some very slightly positive things happening. Mildly stronger than expected GDP growth in February, although we only half care about that because that was February before the war. Slight fall in UK unemployment that again wasn't 100% expected, although you could argue that that's simply to do with people just going, well, I give up, I give up, I'm never going to get a job, so I give up. And there's also a very interesting conversation to be had around that. Whether that's to do with effectively the UK being on the edge of recession or whether it's to do with AI, I suspect the former, but I know a lot of other people think the other and the final thing that has happened recently out this week is this news that the UK budget deficit is slightly lower than you might have expected at a three year low. And again, that sounds good, but it's worth remembering that we still do have a whopping great deficit and the debt is still building and that that fall in borrowing is presumably connected to the sharp rise in taxes, which may still have a laugher reaction over the next few years. You know, you get when you put up taxes initially you normally get a revenue bounce, but then people adjust their behavior and that revenue bounce mildly disappears anyway. Nonetheless, if you wanted to, you could have a go at dragging some sparkle out of these three things.

[John Stevig]

You can. I actually think the underlying strength of the UK economy is better than most people had thought and have thought that for a while. And I do think the biggest problem the UK has is the headwind from bad governance and it's been like that for a long time. It's not just Labour's fault. Labor have certainly kind of raised it to they're as bad as the previous law at least. And so we've got, I mean if you look at the PMIs came out today so their snapshots activity and services and manufacturing industries much, much better than expected. And these are for April partly that's probably companies kind of stocking up ahead knowing that things are going pear shaped in the Middle East. But the point is that none of these figures by themselves or and certainly not taken together, point to an economy that is in massive distress. But the sentiment indicators are just off the charts bad. We saw an EPSOS consumer confidence reading yesterday that shows that people are gloomier than they were ahead of 2008 in 1979 of all times. So there's a. There's a bit of a weird disconnect, which I think is probably driven by people hating inflation. I think. I think inflation is probably the big driver of most people's misery because everyone feels poor and feels that they're being ripped off and doesn't see things getting any better. But, yeah, the underlying economy is not too bad. I think the big risk is that if interest rates stay where they are or even go up a bit because of the energy crisis that we're probably facing, then that will knock a lot of that on its head, particularly things like the housing market and the wealth effect from that, such as it is.

[Merrin Sumset Webb]

I was going to say people hate inflation, but one thing that's really, really difficult is general inflation combined with falling house prices. That's very hard for a lot of Brits. Tough gig.

[John Stevig]

Well, yeah, and you see all these news stories in the papers at the moment about people saying, oh, I can't sell my XYZ house for this price. And obviously the solution is, well, cut the price. But the problem is people have spent so long. Yeah, but people have spent so long thinking that their house is worth X. And the other thing is, when you look at the prices from when they bought them, and this goes back to what we talked about the other day, they haven't actually made any money in real terms, even if they get to sell them for the prices that they can't sell them for. So I think people are waking up to what is actually quite a big hole in their household. Psychological balance sheet.

[Merrin Sumset Webb]

Yes, yes. Which is interesting. I mean, I've got. We've got an interview coming out with Andy Haldane soon and when I used to be the economist at bank of England. And one of the things that we talk about in that is something that we've talked about, I think, with Russell Napier and other people previously, which is about her Ashley household balance sheets. Household balance sheets are in really good, really good shape. You know, the UK household sector has really deleveraged over the last decade and, you know, were they to feel confident a lot of good economic stuff could happen in the uk, but they really, really don't. Okay, so that's that bit of misery. So much for optimism. Thanks for that, John. Let's move on briefly to talk about this business of pension mandation and this idea that pension funds could be forced to. To invest in particular areas of interest to the government. And there's been some changes There in the House of Lords this week.

[John Stevig]

Yeah, thankfully. So, basically. So we know the Mansion House accord was like a voluntary agreement with 17 of the biggest pension providers in the UK to stick 10% of DC pensions into private assets and 5% of those had to be in the UK. Now, okay, let's park whether that's a stupid, it is a stupid idea, but let's park that. So the government in the pensions bill, rather than saying, okay, well these guys have agreed to do this, that's fine. They stuck in this clause which basically says that if they don't do it, we can force them to do it. And not only can we force them to do what they've said they do in the Mansion House agreement, we can force that. It's completely uncapped. We can tell them to invest in anything at all. The House of Lords thankfully kicked that back and said, no chance, that's not happening. The government came back and said, well, okay, we will just be able to mandate basically to the limits of what the Mansion House thing says, so 10% in private assets. And last night the House of Lords voted against that again and pinged it back to them. And so now, basically, unless the government kind of backs down on those, chances are reasonable that actually the whole pensions bill will collapse, or rather it won't get through in this parliamentary session. And the thing is, the pensions industry is not especially happy about that because they actually like a lot of the other changes, which I can't go through here. But, but the point is, you know, I don't know, I'm, I'm kind of grateful for the House of Lords here. It's nice to see that someone's at least attempting to defend, you know, our freedom to invest in what we feel we should be investing in rather than having it dictated to.

[Merrin Sumset Webb]

I didn't know you were usually anti the House of Lords, John.

[John Stevig]

I said, well, I'm not, I'm not. I'm actually quite pro the House of Lords. It's one of these things that works a lot better in practice than it does in theory.

[Merrin Sumset Webb]

Absolutely. And it's worked very well for many, many hundreds of years, which maybe leave it alone anyway. That's not our area.

[John Stevig]

It's not our area. We are not political at all.

[Merrin Sumset Webb]

Yeah, we are not. On the subject of pensions, we were talking the other day, you And I, about NEST, the publicly backed pension fund that 13 and a half, 14 million people have their, their auto enrollment pensions in, and how we're not 100% impressed and you're writing about this week, but also there's. There was a letter this week that went from the regulated the pension funds warning them that they need to keep an eye on their liquidity and also that they will face, or could face huge costs if they sell off their private assets. And I thought that was very interesting. Costs. Right, Costs, by which we partly mean actual cost because it's expensive to sell private stuff, but by which we also mean losses.

[John Stevig]

Yeah, selling at a discount.

[Merrin Sumset Webb]

It's not a cost, it's a loss.

[John Stevig]

It's almost like these people who think, well, I can't sell my house for the stated navigation. Well, that's because it's not worth the stated nav. There was a really good paper actually from Asset Manager that I saw in FT Alphaville the other day, Sona Asset Management, and they did a very good breakdown of private credit and its history and why it's kind of running into trouble just now. I think the biggest takeaway from it was not so much that private credit's going to cause something like 2008 or even that is not a valid asset class. You know, it will still exist in the future, much like junk bonds still exist, even though they did have a big blow up at the start of their career.

[Merrin Sumset Webb]

You're just asking for hate mail, John.

[John Stevig]

But their point was they're going to go through such a long period of poor performance and I think this really gets to why we don't really. At least if it is in your pension fund, you want to know about it. And probably I. Ideally you don't want it in your pension fund because now is probably not the time to be getting into this stuff. And again, it just comes back to what we said on the podcast the other day. People need to just take responsibility for knowing what's in their pension because otherwise no one else is going to do it for you.

[Merrin Sumset Webb]

No one else is going to do it for them at this point. Yeah. Okay, let's end with something optimistic.

[John Stevig]

Hey, the sun's out.

[Merrin Sumset Webb]

Well, it might be with you.

[John Stevig]

I can see through your window. That's quite bright out there.

[Merrin Sumset Webb]

Oh, actually you're right. No, it is. Sorry, take it back. Sun is shining with me as well. That's how bad things have got. I can't even see the sun shining. All right, brilliant. So just let me say to everybody that if you want to know more about the miseries of the UK economy and, and some of the things that are great about it and reasons to be optimistic, don't listen to me and John, but do listen to a podcast out on Monday with Andy Haldane because he comes up with a lot of things that will make you think, well, actually this is going to be okay. John, you and I believe that some major policy changes and the UK is in a great place without those major policy changes. Things are going to be tough, but there's so much going on underneath all the misery that the future could be bright if only we had a competent government. Thanks for listening to this week's Meritorques Money Debrief. If you like our show, rate through, view and subscribe wherever you listen to podcasts. Also, be sure sure to follow me and John on X or Twitter Ernesw and johnsteppe. This episode was produced by Sama Saadi. Production support and sound designed by Moses Andam. Questions and comments on this show and all our shows are always welcome. Our show email is marianmoneylumberg.net.

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