Worrying signs in the financial markets

There are several concerning aspects of global financial markets at the moment; canaries in the mine that may be warning of serious trouble.

The first item that caught my attention was the failed diamond auction by Botswana, when it recently tried to sell one million carats and did not achieve its reserve price. This is partly because laboratory-made diamonds are exactly the same, they have an identical molecular structure and are much cheaper than mined diamonds. But it is also a reflexion that the propaganda around diamonds may be wearing a little thin.

It may also indicate that there is less disposable income around at the high end of society. The economic consequences of tariffs and the continued weakness of European markets, as well as the end of zero interest rate policies, could all be making themselves felt, and it is in the end, hitting the Botswanan economy. In itself, diamonds are not that important, but the next two stories concern me more, because they are similar to events that have precipitated crashes in the past.