🫧 Bubble Trouble

Irakli Rekhviashvili
October 16, 2025 • Estimated Reading Time: 8 minutes

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Today’s briefing:

Bubble Warnings
National Remembrance Day
Gen Z Uprising

🫧 Bubble Warnings

The global economy's surprising resilience is running headfirst into stark warnings of a bubble from the very bankers reaping bumper profits and the international bodies tracking the risks.

Why it matters: The world is coping with geopolitical disorder and a US-China trade war better than feared.

But the foundation looks shaky, built on "investor exuberance" that could pop and credit market "cockroaches" that are starting to appear.

Here are the IMF's latest global growth projections 📊:

3.2% this year and 3.1% in 2026. Dimmer than a year ago.
U.S. growth is projected to see a massive slowdown to 2.0% in 2025, down from 2.8% last year.

🧠 Go deeper: The IMF identifies the AI investment boom as a key reason growth has fared better than expected.

But it's also one of the biggest downside risks for the global economy.
- The fund is skeptical that the boom can make up for the hit from tariffs in the near term.

Historical precedent: The IMF warns that "continued exuberance may require tighter monetary policy — just as in the late 1990s" during the dot-com boom.

"Markets could reprice sharply, especially if AI fails to justify lofty profit expectations"

IMF chief economist Pierre-Olivier Gourinchas

Wall Street's warning: 🏦 Top banks like JPMorgan, Goldman Sachs, and Citigroup just reported bumper profits, buoyed by the return of dealmaking and market volatility.

But their CEOs are the ones sounding the alarm.

"We have a lot of assets out there which look like they're entering bubble territory…That doesn't mean they don't have 20 per cent to go. It's just one more cause of concern."

🗣️ JPMorgan CEO Jamie Dimon

Citi CEO Jane Fraser acknowledged the economy's resilience but warned of "pockets of valuation frothiness in the market so I hope discipline remains".

The credit "cockroaches"🪳: Top financiers are warning about an erosion in lending standards after the collapse of First Brands Group and subprime auto lender Tricolor Holdings.

Apollo's Marc Rowan called them "late-cycle accidents" and blamed a "willingness to cut corners" in a competitive market.

"My antenna goes up when things like that happen... when you see one cockroach there are probably more"

Jamie Dimon said, after JPMorgan took a $170mn hit from Tricolor's collapse

An age of disorder 🇨🇳🇺🇸: This is all happening against a backdrop of two huge events: the abdication of the US as global hegemon and the uncontrolled onset of AI.

Trade tensions remain a threat, with the U.S. Treasury Secretary accusing China of trying to hurt the world economy with export controls on critical minerals.
The world's poorest economies are particularly at risk of slowing growth, partly due to cuts in aid.
- A Lancet study concluded that dismantling USAID "could result in more than 14mn additional deaths by 2030".

The bottom line: The need for global economic cooperation has most certainly not ended. But it is dangerous to have confidence in what lies ahead.

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🛂 Visas Canceled Over Kirk Comments

The Trump administration is revoking the visas of non-U.S. citizens for their online comments about the assassination of conservative activist Charlie Kirk.

Why it matters: The move signals an increasingly aggressive policy of canceling visas for speech the administration views as endorsing "political violence".

The policy is sparking a national debate over free speech and is being challenged in court.

Driving the News: The State Department announced on Tuesday it has revoked the visas of six individuals who "celebrated the heinous assassination" of the Turning Point USA co-founder.

The individuals are from Argentina, South Africa, Mexico, Brazil, Germany, and Paraguay.
The department suggested more revocations could follow.

"The United States has no obligation to host foreigners who wish death on Americans."

U.S. State Department, on X

Trump has called Kirk an "American hero" and a "martyr," blaming "far-left radicals" for the killing.

"You can't defend 'our culture' by eroding the very cornerstone of what America stands for: freedom of speech and thought."

Conor Fitzpatrick, attorney at the Foundation for Individual Rights and Expression (FIRE)

Reality check: Republicans, who spent years criticizing cancel culture, are now enforcing speech codes to punish ideological opponents following Kirk's killing.

Zoom Out: The revocations follow several high-profile actions by the administration to memorialize Kirk.

Medal of Freedom: On Tuesday, which would have been Kirk's 32nd birthday, President Trump posthumously awarded him the Presidential Medal of Freedom, the nation's highest civilian honor.
National Day of Remembrance: Trump also proclaimed October 14 as a national day of remembrance for Kirk.
Federal Investigation: Treasury Secretary Scott Bessent said his department is investigating organizations the government believes are responsible for Kirk's killing.

🌍 Gen Z's Continental Uprising

A potent wave of Gen Z-led protests is shaking governments across Africa, from Kenya 🇰🇪 to Madagascar 🇲🇬 and Morocco 🇲🇦.

The demonstrations reflect a deep and growing anger over a lack of economic opportunity on the world's youngest continent.

Why it matters: This is a demographic tidal wave.

With a median age of just 19, Africa's youth are becoming politically active in enormous numbers, and they are finding their elected leaders wanting.

This poses a profound challenge to the established political order far beyond the countries that have already seen unrest.

The big picture: While specific triggers differ, the root cause is a unified grievance: the failure of governments to provide a future for their youngest citizens.

🇰🇪 In Kenya, it was a finance bill that would raise prices.
🇲🇬 In Madagascar, it was the failure to deliver basic services like electricity and water.
🇲🇦 In Morocco, it was anger over massive spending on soccer stadiums ahead of basic needs like schools and hospitals.
🇵🇪 In Peru, it was a law forcing young people in the informal economy to contribute to a private pension fund.
🇵🇭 In the Philippines, it was the discovery that officials had embezzled billions from flood relief funds.
🇮🇩 And in Indonesia, protests erupted after news broke of extravagant new housing benefits for parliamentarians.

These individual sparks are fanned by two common accelerants: rampant corruption and the power of social media.

All the countries experiencing these Gen-Z uprisings rank 99th or worse on Transparency International's Corruption Index.

The Playbook: 📱Digital platforms like TikTok, Discord, and Reddit have become essential tools for every stage of these movements, from sharing grievances and organizing tactics to documenting abuses and mobilizing support.

This decentralized structure makes it easier for them to outfox the authorities.

The bottom line: Young voters recently helped defeat the ruling party in Botswana and were key in the African National Congress losing its majority in South Africa for the first time since 1994.

The message is clear: Africa's youth are demanding change, and they are using every tool at their disposal.

🫧 Bubble Trouble

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