The article discusses why stock markets continue to perform well despite challenging global geopolitical and economic conditions. It suggests that a structural issue in asset management, channeling global savings into limited investment areas, is a key factor.

Financial markets, stock markets especially, appear able to defy gravity despite the global geopolitical and economic situation. A plethora of institutional and individual explanations have been offered as to why, but most seem to miss the point. Which is, at least in part, that we have created a kind of monster in the asset management industry, which channels a glut of global savings into a limited number of investment areas and which, by virtue of these captive inflows, is able to maintain...