Center political parties are breaking
This is a great illustration about what's to come in the political future. Voters are moving away from the centre.
It's also a symbol of chaos and that's the kind of think that markets hate.
But it's happening. A few years ago the trend seemed to be a shift to the right or left, to nationalism, to anti-immigration but now it's clear the trend is a bit different. In developed economies, it's simply a trend away from the centre.
The UK results show Labour and the Conservatives both getting trounced with a combined 23% of the vote compared to 50% in 2014.
In the EU election it wasn't nationalist parties that outperformed (as was feared). Instead it was green parties. That's a different set of risks for markets and it's probably worse. Some green parties are pragmatic but others are dogmatic and willing to kneecap growth (at least in some industries) to make a point.
What's most important is that no one can know how the fragmentation and voter dissatisfaction will end or where it will lead. There will be a series of political experiments and my guess is that the countries with the strongest institutions, government traditions and checks-and-balances will do best.
