It was inevitable – it had to happen and the only question was when.

Today markets are moving into a major correction – a development predicted by Fitch ratings a few days ago – when Fitch warned that an AI-related correction had become a “major global credit risk’ due to the scale of AI investment, elevated tech valuations and the impact of AI on global markets.

The report said: “The scale of AI investment is such that the exposure of the economy and overall capital market to such a correction is significant.

They added to their prediction by highlighting persistent geopolitical uncertainty – notably the Iran conflict – the conflict Trump has just ramped up.

It stressed that valuations in the S&P’s cyclically adjusted P/E ratio were near late 1990s dotcom boom.

The other sleeper in the US economy – debt – is also significant with total government debt approaching historically high levels while Alphabet, Amazon, Meta and Microsoft have pushed out $US180 billion in investment grade bonds.

Governments and hedge funds are also jumping on the ride. John Plender, writing in the Financial Times, said that a “growing proportion of short-term public debt is held by fickle highly leveraged hedge funds. It follows that any moves by centra banks to tighten monetary policy can be financially destabilising” leading – possibly to the need for bank bailouts.

“The market euphoria bears comparison with the canal mania of the 1830s, the British railway mania in the 1830, the electrification exuberance of the late 1920s and the dot com boom of the late 1990s”, he said.

The murky area of private credit is another major risk. Companies such as BlackRock, HPS Corporate Lending another private ending companies are limiting withdrawals from funds invested.

If you don’t understand private credit the only fact you need to know is that it is a $US2 trillion industry which is not well understood – even by the participants.

Fitch expects world growth to slow to 2.4% in 2026, and forecasts US inflation will end the year at 3.7% This upends any Trump hope that his newly appointed Fed Chair will bow to his wish to reduce rates.

…and if that’s not enough to get your worried Fitch also flagged a strong El Nino weather pattern as an emerging credit risk. In case you have forgotten El Nino events bring droughts in places like Indonesia and Australia, heavy rain in parts of the Americas and higher overall global temperatures.

Despite Donald Trump, the Australian Liberal Party, One Nation and others denialists this can only increase the impacts of climate change.

You may also find it difficult to find something to quaff to help you cope with your concerns and as the climate change begins effecting vineyards. The French fires approaching Bordeaux might be replicated in the Barossa and other Australian vineyards.