Investors might be dancing into the new year but the party fuelled by an asset bubble cannot last

Not long before he died two weeks ago, the great central banker Paul Volcker wrote in the Financial Times, “Nihilistic forces … seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free press, the separation of powers, the belief in science, and the concept of truth itself.” 

Truth took a leave of absence in 2019 as it became acceptable to dissemble – no longer is there accountability for liars. This has changed the markets, too, with an influx of inauthentic “news”. Several times this year, the markets (and I) have been swayed by US President Donald Trump’s tweets delivering good news or bad, only to have hopes dashed as they have proved, at best, premature.

We can’t just blame Trump. The fake news factories are gearing up globally, emulating Russia’s apparently highly creative and successful use of misinformation to drive emotions in both the US Presidential elections and Britain’s Brexit referendum.

In China, respected institutions, such as Fudan University, have been told that academic freedom comes well after party loyalty. National Basketball Association team Houston Rockets’ manager Daryl Money, Arsenal footballer Mesut Ozil, All Blacks rugby star Sonny Bill Williams, and for a while Cathay Pacific, Dior and Versace have faced a backlash for perceived slights against China.

In Hong Kong, the bank economist willing to make a negative call on the Chinese economy is an endangered species. Journalists don’t trust the police not to have planted weapons on protesters. Lawyers don’t trust the Department of Justice when it says that trials will not be political.