Thoughts on Brexit

   Setting sail from the EU?

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Thursday’s USA, … and global, markets rally actions as possible over-optimism on the United Kingdom voting to remain in the European Union (EU), or Friday’s 2 trillion dollar global haircut actions as rational repositioning.  The markets are not always right, or rational, … and the markets can stay irrational far longer than investors money can, or might, last.

In the global high speed computer, “What are you going to do for me in the next 10 seconds?” trading environment that we allowed to usurp our “investing” markets philosophy … in exchange for Vegas and Atlantic City “gambling casino” markets philosophy … the talking heads and their so-called experts that flimflammed investors, and traders, into thinking the UK was going to vote to stay in the EU, despite repeated polls pointing to a close vote  … clearly had no clue as to what they were saying … or doing …

I run the fundamentals, then the charts, then the sentiment analysis … and, multitasking, I listen to conference calls, fireside chats, and so, having done my own homework, I was making an effort to inform, educate, caution, and warn readers about the convergence of a number of factors making June a pivotal month.  Every year, in June,  we have Quadruple Witching, and before all those options and futures expire we get a potentially globally destabilizing U.S. Federal Reserve FOMC meeting and  FED speak. Talk about a setup for catastrophe if ever there was one.  Plus, the Russell pours gasoline on the June  “risk” fires by reconstituting its indices.   …. and there’s always another shoe to drop.
In this “Brexit” vote to leave the EU case, I believe the talking heads and the markets are tossing the UK into the close out bin. The EU never came to an agreement on the EU Constitution which might have resolved the UK/EU issues on immigration. Sadly, NOT one peep from the talking heads, or their so called experts, about that …

Yes, some adjustment, over time, would be appropriate in consideration of a stand alone United Kingdom, as well as an European Union without the UK … however, a two trillion dollar reduction in global valuations is irrational.  Especially, since any changes are months and years down the road.

The European Union needs to assemble a Constitutional Congress, seek input from concerned citizens,  and work out, or compromise, on issues important to its 500+ million citizens and residents … to arrive at an accepted EU Constitution  or the EU is toast.

 

Just my humble personal opinion.

Vet67to82

 

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