Wednesday, July 13, 2016

Celebrate Good Times, Come On!!!


I've held off commenting for a bit because there is just so much information to share that I didn't know where to begin.  I'll do my best to chip away at a variety of topics over the coming weeks while trying not to flood your inbox with random updates.

Lions and Tigers and Brexit, Oh my...
Three weeks ago the world was told to hold its collective breath because the UK might be voting to leave the EU.  The night before the vote the gambling books in the UK (which are thought to have predictive powers) went sharply "all-in" on the Remain side of the bet.

Subsequently, reviews of those books seems to indicate that it was a few large bettors trying to move the market.  The thinking seems to have been "Hey, if we bet enough on REMAIN that it makes it seem like we have inside knowledge.  That will be reported widely and it will discourage the LEAVE voters from even coming to the polls."

The first half of that equation was correct - it was reported far and wide before the vote that "Remain seems all but a certainty based on late betting". However, the trouble with democracy is that you still have to actually have a vote and the LEAVE campaign pulled off the win with roughly the same percentages that were predicted in polls two weeks before the vote.

Uh-oh.  Didn't the Prime Minister of the UK David Cameron say that Brexit could effectively lay the groundwork for a new world war and waves of genocide around the globe?  The "Remain" camp had actively spread a campaign of fear that was focused on political, economic, social and societal upheaval if "Leave" won the vote.

Then, just when everyone expected a global market collapse, what happens?  The sharpest rally in the global markets in years.  7-10% around the world in two weeks!!!

If there is one consistent theme that I hope you've learned from my blog it is that when EVERYONE is certain of X, you can be assured that Y will happen. Markets were certain to collapse after the Brexit and instead the S&P and Dow have now hit new all-time highs.

Now as for WHY that is happening and what it means for the future...tune in tomorrow.

No comments: