Market volatility is the new normal in our crumbling world order

Andrew Sheng says financial markets are now vulnerable to a wider range of shocks, as we grapple with two global forces – the transition from a unipolar to multipolar world, and a divided society in which the elites are dangerously out of touch

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The Chinese and American flags fly on a lamp post along Pennsylvania Avenue near the US Capitol during then president Hu Jintao's state visit in 2011. The world is disoriented because the old order is changing, and all we know is that what is replacing it is going to be very different. Photo: Reuters

Published: 1:38pm, 27 Apr 2018Updated: 9:05pm, 27 Apr 2018

At a time when the world is wondering how to make sense of sharp swings in foreign policy, the two Koreas’ historic rapprochement must bring a great sense of relief for anyone who cares about peace.

The sense of insecurity is most acutely felt in America. The fact that former FBI chief James Comey has come out openly to say that his serving president is “morally unfit” for office says a lot about how the line has been drawn between those who want to stay in power and those who think America is heading in the wrong direction.

The rest of the world is disoriented precisely because the old order is changing – all is not well under heaven. All we know is that what is replacing it is going to be very different.

Last year, financial markets returned best results from the romance of tax cuts and the promise of tech, even as economies around the world were beginning to recover under their own steam. This year, the International Monetary Fund’s spring meetings suggest that the recovery will continue, but dark clouds are looming, such as the unsustainable US fiscal and trade deficits.

Of the two most important “signals” that I have discerned when thinking about the future, the first is understood but not fully accepted.