Brexit!

[audreyh1]

2.5% drop? That wasn't so bad...

And a big chunk was just to reverse the rally from yesterday.

 

[Another Reader]

And a big chunk was just to reverse the rally from yesterday.

Yep. So far, the "panic" looks like a whole lot of nothing.

 

[imoldernu]

The world is going through a Global equalization scheme. Any person, from anywhere, can go anywhere. Countries that are the most generous will have to adjust to huge population growth, until they stop being the most generous.

Wages will be equalized globally, as we have seen over the past 20 years. Countries can move out of the "world union", but eventually they will succumb and be part of it.

It will be a different world in the coming years...

+1 Well said.

 

[kcowan]

We had lunch beside of young lady from Frankfurt and she said that the economic centre for the EU will switch from London to Frankfurt. Could explain the hits the banks took.

 

[RAE]

I was surprised at how small the drops were, especially after he run-up occasioned by the bogus "stay" poll results. I expect the wailing and gnashing of teeth across the EU over the coming months will cause a continuation of the volatility we have grown accustomed to..

Yep, I expect more volatility also. Hard to predict how this will all shake out over the long-term, as there is really no precedent for something like this to fall back on. If more countries decide to hold referendums on exiting the EU in the coming months/years, which many think is possible (maybe even probable), then I think world markets could be shaky for a fairly long period ahead. Markets hate uncertainty, and there could be plenty of that ahead for Europe after yesterday's vote.

 

[6miths]

We had lunch beside of young lady from Frankfurt and she said that the economic centre for the EU will switch from London to Frankfurt. Could explain the hits the banks took.

This seems incredibly unlikely for a number of reasons I can think of. Switzerland doesn't seem to have done too badly on its own. I'm not saying that a young lady from Frankfurt might have some bias in making the call but...

 

[GTFan]

Looks like the Scots (and possibly N.I.) will be voting to leave the UK too, judging from all the interviews they've done with folks living there. Neither area is happy with their majority (in Scotland's case, overwhelming) stay votes being vetoed by England and Wales.

The real trouble here is the potential future breakup of the EU as a result, which will introduce a ton of uncertainty that markets don't like.

 

[YVRRocketSurgery]

Apparently Google is reporting the top EU related questions being searched on in the UK currently are:
What does it mean to leave the EU?
What is the EU?
Which countries are in the EU?
What will happen now we've left the EU?
How many countries are in the EU?

I don't know how accurate this is or how well it really represents reality in terms of how knowledgeable on the issues most Brits were heading into the vote. But it does illustrate the potential risk of having uninformed voters become the swing vote on a close vote that significantly impacts policy and economics.

 

[devans0]

I was at a cocktail party not long ago and a woman opined that "buying on a dip" was the equivalent of taking advantage of someone's misfortune and morally wrong.

Of course, with a hefty trust fund paying her bills it might be easy to take the high ground.

I was at 50% in money market. That 50% went to help provide liquidity for the big money. I guess I am half moral/immoral. I have noticed that morality depends if booze glasses are [-]half[/-] full or [-]half[/-] empty.

 

[NW-Bound]

I was at a cocktail party not long ago and a woman opined that "buying on a dip" was the equivalent of taking advantage of someone's misfortune and morally wrong.

Of course, with a hefty trust fund paying her bills it might be easy to take the high ground.

LOL - did you explain that if you didn't buy at the dip, someone else would buy even lower?

Buyer's strike = even lower prices. If someone needs to sell, they need to sell! And they can always choose not to sell until the like the price.

+1

This trust fund baby is an ignoramus!

If there were absolutely no buyers, the stocks would have gone to zero, as it means nobody wanted them. Would the sellers rather get a low value or zero?

 

[redduck]

+1

This trust fund baby is an ignoramus!

You're describing my dream woman.

 

[pb4uski]

It is just as easy to love a rich girl as a poor girl.

 

[kcowan]

This seems incredibly unlikely for a number of reasons I can think of. Switzerland doesn't seem to have done too badly on its own. I'm not saying that a young lady from Frankfurt might have some bias in making the call but...

She was talking about the EU. Neither Switzerland nor The UK will be a part of it. So Frankfurt is a pretty good bet.

 

[eytonxav]

Had a small position in HDGE and was going to double it on Thursday, but when the market looked so strong that day, figured the smart money knew more than me, so I did not add to the position. I keep forgetting that old adage, when the crowd goes one way, go in opposite direction.

 

[euro]

They have many years of regulations to wind down because of this, it will take time. But my guess is that after it is all said and done, the agreements that will be made, will look pretty much like the agreements they already have, staying in the EU. Because they still have to meet the EU regulations to trade with the EU. In the end, I think it will not make much of a difference. Unfortunately they (and to a lesser degree the rest of us) will just have to suffer through somewhat lower GDP growth for a while until all this uncertainty is sorted out.

Not sure I agree. I think the terms they'll get will be significantly less advantageous than what they have now. In other words, they will still be held to many of the cumbersome parts, but will get less upside. The EU will have to "make a point" in order to stay credible. For example, while people generally think Switzerland has done ok outside of the EU (and they HAVE done ok), they HAVE had (and continue to have) their share of bitter pills to swallow during the bilateral agreement negotiations with the EU.

 

[Totoro]

Have to agree with you there.

Simply put: there is a strong incentive from the EUs perspective to make a Brexit turn out net negative for the UK, even if that hurts the EU as well.

Because if it would be happy sunshine and roses for the UK because of an exit, why have a EU at all?

 

[Markola]

I can't prognosticate with any certainty so will leave it up to my global fund of index funds, VASGX, to sort out the mess, ruthlessly cleanse the losers and make me some money from the winners.

 

[samclem]

The real trouble here is the potential future breakup of the EU as a result, which will introduce a ton of uncertainty that markets don't like.

Maybe we'll eventually see a return to something like the old European Economic Community (EEC), a free-trade zone which worked well and sticks to facilitating trade and leaves nations to decide for themselves on issues of immigration, how far a taxi ride can be, and many other things.
What we're seeing now is the natural result of the overreach of a nonresponsive, unaccountable bureaucracy. Maybe this is what "reform" looks like--or will prompt it.

 

[nun]

I'll just rebalance if necessary, Brexit won't change my strategy.Also I live off rent and a small pension so I'm not concerned about market volatility.

However, as a UK citizen living in the US I'm gutted by Brexit as are most of my friends in the UK on the left and right of the political spectrum. They are mostly college educated and live in London where the vote to stay easily won.

Whoever in the new Prime Minister is getting a poisoned chalice as the UK economy will take a hit until negotiations are finished......and that could be a decade.

Interestingly the Scottish First Minister and leader if SNP, Nicolas Sturgeon, is saying that the Scottish Parliament might have a Brexit veto power. The constitutional issues are very complex. Also the UK parliament is not bound by the result of the referendum, but it would be a brave MP that would vote to ignore the result.

 

[aim-high]

I was at a cocktail party not long ago and a woman opined that "buying on a dip" was the equivalent of taking advantage of someone's misfortune and morally wrong.

Of course, with a hefty trust fund paying her bills it might be easy to take the high ground.

Ha! Just the opposite. It's a moral imperative to buy the dip. Otherwise those sellers would have no exit and end up with nothing!

 

[aim-high]

Read today on the Web . . . "and I thought Brexit was something that happened an hour after Wafflehouse."

 

[NYEXPAT]

I was at 50% in money market. That 50% went to help provide liquidity for the big money. I guess I am half moral/immoral. I have noticed that [-]morality[/-]inhibitions depends if booze glasses are [-]half[/-] full or [-]half[/-] empty.

FIFY

 

[nun]

Cameron is saying that an early election might be a good idea because of all the political turmoil in the UK. If a party runs with "Remain" on it's ticket and wins then I can see that being a legitimate mandate to ignore the referendum result and stay in the EU. It is up to Parliament to pass legislation to initiate Article 50 to leave the EU as the referendum is non binding and if the ruling party wants to stay in, then the legislation won't be drafted.

 

[MichaelB]

The consequences of the Brexit vote are far reaching indeed. England just lost to Iceland in the European Championship. Is there no end to the pain?

 

[nun]

The loss to Iceland was sort of poetic......and I say that as an Englishman. There's a lot of remorse over Brexit....if the vote was taken today I think it would go the other way, particularly with the way many of the Leave politicians are distancing themselves from promises they made during the campaign,