End of Year Signals in Financial Markets

Some relevant signals and catalyst events for likely changes in 2026.

A. Financial Crash signal 1: (distressed) private credit is moving its asset allocations into (subprime FICO score) consumer debt. This also might be viewed as a form of cross-sector based sector rotation as a variant on the Goldman Sachs institutional model.

B. Japan is pivoting back to nuclear energy, despite the Fukushima reactor’s meltdown on 11th March 2011. FT has a short video documentary.

C. Financial Crash signal 2: delinquency rates for asset-backed securitised (ABS) debt is usually a 12-18 month lead. Bloomberg has a new podcast episode on auto loan related ABS challenges, with a discussion also of home loans (mortgage-backed securities) and hiring / unemployment rates (markers for variations in consumer consumption and loan uptake, and as a catalyst for financial stressors). There is also an excellent discussion of FICO scores; how credit bureaus actually work; and the role of algorithmic screening for consumer behaviour. The discussion on income ranges and loan underwriting standards is very helpful.

D. Why true crime is popular in the United States (especially on streaming services). For freelance / outsourced production companies it also has a clear market (eyeballs) that is helpful to raise production funding; there is plenty of source material; and streaming service producers are more likely to acquire it in a deal-making sense.

E. The New Yorker’s Ian Shapiro profiles second Trump administration tariffs architect Peter Navarro. He is part of what I would call Trump’s decision elite.

F. A major case of alleged research misconduct for the Australian Research Council has been resolved - clearing the academic concerned. The Australian Code for the Responsible Conduct of Research 2018 is the overarching code of conduct that was used.

G. Author William Dalrymple has recently toured Australia. He spoke to ABC Australia about China’s history.

H. Venezuela is becoming a geopolitical flashpoint for the second Trump administration - and is affecting global oil, shipping, and supply chain markets. The CIA’s World Factbook entry.

I. Downtown Josh Brown explains why the robo-advisor model proved not to be a disruptive innovation in wealth management. Brown’s cost structure analysis of WealthFront and different generational markets for new financial products is insightful. On disruptive innovation, the University of Toronto’s economist Joshua Gans’ book The Disruption Dilemma (Boston, MA: MIT Press, 2017). Gans has just released The Microeconomics of Artificial Intelligence (Boston, MA: MIT Press, 2025).

J. An Ian Bremmer talk from a month ago to Harvard University’s Kennedy School on geopolitical turbulence.

K. A 2017 BBC documentary on nuclear weapons called The Bomb.

L. The late Professor Joel Peterson speaks at Stanford University about how to conduct effective negotiations.

J. A free Yale University course on Foundations of Modern Social Theory (also relevant to political philosophy and political science) by now Professor Emeritus Ivan Szelenyi (UCLA).

K. Today’s MIT OCW free course is Technologies of Humanism created by Dr Kurt Fendt.