Brexit Wins — Markets Roiled

[Dave Grubb]

I'm not sure if this is currently the case or not but at some point in our past the "profession" that generated the highest accumulation of profit was currency trading. I was a bit dismayed when I first heard that people who produce no product or service of value could be the winners in the realm of wealth generation

There is something that just doesn't seem right in that scenario.

...and BTW Ben, I offered my wife an all expense paid trip back to Texas (she graduated from Baylor) in-lieu of her upcoming trip to England---but she declined

[Truckman]

...and BTW Ben, I offered my wife an all expense paid trip back to Texas (she graduated from Baylor) in-lieu of her upcoming trip to England---but she declined

Apparently she's no relation to my ex, who would have demanded both......Ben

[Dave Grubb]

Apparently she's no relation to my ex, who would have demanded both......Ben

Now that right there is funny---I don't care who you are

[wacojoe]

Brexit was profoundly more than, and in spit of, the economic consequences, it seems to me from my distance. That some schmuck in Brussels could demand that their press exclude the origins and meaning of various terrorist attacks by withholding the religious backgrounds and foundations of the attackers is but the latest outrage from rule from afar by Euro-weenies. Too many other oppressive outrages to list. As an American in a country which threw off the yoke of foreign oppression centuries ago, I can fully understand why Brexit found favor, and economic consequences be damned.

They'll be better off in the end.

[Dave Grubb]

I take no argument with that, my minimal regret is only selfish. Had I been a subject of the crown and suffered the loss of sovereignty I would likely have opted out as well. My posting this in no way is to poke fun at what they are going through.

However,I am happy to leverage their position for my benifit. I may send my lovely wife more often.

[Dave Grubb]

The pound continues to tumble, now at $1.21---and the Euro seems to be in sympathetic unison, now down to $1.08.

That is not all bad news since I am on the cusp of buying a very large 5-axis Italian made CNC machining center.

[Phillbo]

Will Italy be the next to leave? We'll know in a few days.

[Dave Grubb]

I've spent enough time in Italy to not do anything so silly as pontificate on their politics

However, the cold winds seem to be blowing across the EU. The Euro is hanging at about $1.05 to $1.06, down from a high of $1.39 a couple of years ago. The BP is hoovering at about $1.26, down from $1.49 just prior to the vote.

A bit like a bunch of drunks trying to hold each other up

[Dave Grubb]

Also voting today for a new President is Austria---who just might beat Italy out the EU door.

A few days ago Francois Hollande announced his decision not to stand for reelection next year. Like the others, feeling the effects of the populist movement, he is center left politically.

[Dave Grubb]

..and from the WSJ and live coverage:

Breaking: Exit Polls See ‘No’ Vote Ahead at 54%- 58%
As the polls close the result from the first official exit poll has put the 'no' vote ahead by a strong margin.

A ‘no’ vote could lead to Prime Minister Matteo Renzi’s resignation.

But also in the WSJ Austria goes the other way:

Austrians voted against an anti-immigrant populist as their next president by a resounding margin, bucking a trend of nationalist electoral successes across the West.

[Dave Grubb]

Without any editorializing I think it worth noting that the "populists" party in the Austrian election is more accurately identified as a nazi party. That party founded by former nazis garnered 46% of the vote.

[wacojoe]

This snippet indicates GB seems to be doing better in recovery than its piers, including the US, in the raw numbers of GDP in the last year. Maybe I'm missing a lot in the rest of the article, which I could not read unless I pay for it though. You subscribers can fill us in on the rest.

Britain ended last year as the strongest of the world’s advanced economies with growth accelerating in the six months after the Brexit vote.

Business activity hit a 17-month high last month, meaning that the economy grew by 2.2 per cent last year — more than the six other leading nations, including the US, Germany and Japan.

Far from slowing after the referendum in June, as predicted by the Treasury and Bank of England, growth appeared to have improved. GDP grew at 0.3 per cent and 0.6 per cent in the first two quarters of last year, compared with 0.6 per cent and an estimated 0.5 per cent in the final period...

http://www.thetimes.co.uk/edition/ne...exit-rt7j9lccb

[Dave Grubb]

The pound continues to fall and is now at $1.23. I'm not sure how that is weighed (I think not at all) on the GDP numbers---the honey might not be as sweet as it first appears.

[wacojoe]

The rise and fall of currency is often said to be a mixed bag, Dave. On the one hand, when our dollar rises in value against other currencies we can buy more stuff from them, but they can buy less from us, and vice verse when it switches. It seems whichever way the the flow goes, there is advantage and disadvantage. As a foreign exchange sophisticate, I am certain you know this better than I.

[Dave Grubb]

That is my point, I suspect their apparent GDP was advantaged by the falling value of the pound.