The Age of Narrative Disintegration

The Age of Narrative Disintegration

Markets are flailing for a storyline in a world that no longer fits into one

For much of the post-Cold War era, global markets operated within a recognisable frame. There were variations—bubbles, crashes, crises—but the core assumptions held: globalisation was inevitable, central banks were in charge, and technology meant faster growth. Investors could stitch disparate data points into a coherent story, mapping economic trajectories with a reasonable degree of confidence.

That world has vanished. What remains is a swirl of contradictions, ruptured frameworks, and orphaned datapoints. Markets are no longer buoyed or battered by a single, overriding narrative. Instead, they lurch between themes—Trump’s tariffs, geopolitical conflict, monetary fragmentation, de-dollarisation, artificial intelligence euphoria—without settling on a plotline that binds them together. Narrative disintegration has become the defining condition of the global economy.

Nowhere is this more evident than in the collision between old orthodoxies and new realities. After decades spent acting as a beneficent hegemon, the US is withdrawing the global security umbrella that it underwrote for much of the post-war period, imposing sweeping tariff increases on allies and adversaries alike, expanding the state’s influence over the private sector, and driving policy uncertainty to previously unfathomable levels. Flows of goods, capital, and people between countries are slowing, unsettling the low-inflation, high-efficiency assumptions that have underpinned pricing models since the mid-eighties.

Overlay this with the generative AI boom, and the fog thickens. On the one hand, investors cheer the prospect of an epochal productivity surge. On the other, no one can agree on how (or when)it will translate into macroeconomic outcomes. Earnings multiples are inflating, power grids are groaning, and yet productivity statistics remain underwhelming. Is this a revolution, or just another market mania?

Further confusion is arising from the deeper trends that have been unfolding for years. After decades of abundance, the competition for capital is increasing as populations in the developed world age. Climate risks, both physical and regulatory, are complicating investment plans. Meanwhile, changes in monetary technologies, such as the proliferation of stablecoins and experiments with central bank digital currencies, are beginning to reshape how money moves and how policy transmits.

Even the informational scaffolding of markets is eroding. The post-Twitter information ecosystem is fragmented and frenzied. Official statistics are questioned, traditional media is distrusted, and financial commentary has atomised into competing micro-narratives on social platforms. Markets have always traded on stories as much as on spreadsheets. But the storytellers no longer share a script.

The result is a kind of narrative entropy. Markets are moving, sometimes violently, but without conviction or cohesion. Interest rates are dancing to a tune played by equally confused policymakers. Equity allocations are reversing by the week, and “meme stocks” are back to stoking volatility. Currencies are swinging in response to headlines, not fundamentals. Even “safe havens” are behaving unpredictably.

In this environment, traditional macro strategies are flailing, and short-termism prevails.

There is no single villain here. Rather, the breakdown reflects the simultaneous unwinding of old certainties and the premature birth of new ones. Investors are not short of news—but they are short of meaning. Until a new narrative takes hold, markets will remain reactive, fragmented, and anxious.

This is, in short, a bull market in confusion.