The People Have Spoken – BREXIT!

NEW YORK, NY - JULY 06: Donald Trump attends the 2015 Hank's Yanks Golf Classic at Trump Golf Links Ferry Point on July 6, 2015 in New York City. (Photo by Andrew H. Walker/Getty Images)

Hey Donald Trump,

Brexit won. Britain and the EU are breaking up. David Cameron announced his resignation. Markets are tanking.

You must be ecstatic.

Not long ago we were worrying about Greece leaving, and that fear was sending the markets down. Lo and behold, it is the UK populous that voted against an overreaching socialist system. Only 52% of them, but that’s all it takes to swing the tide.

That countered the polls. The polls leading up to Thursday seemed to indicate that the UK would vote to remain in the EU. The stock market bought in. Everyone was complacent.

Everyone has been complacent for a while.

Complacency will take a jolt, recover, and then fade.

So we don’t know what could make you more ecstatic than the populous voting against the status quo, voting against the polls, and voting against the centralized EU government.

Now is the time to hold back, Don. Don’t be a douche again, if you can at all help it. Momentum is on your side. Hillary is going to be on the defensive. She represents the status quo and a close tie with the international machine. She’s vulnerable.

But be careful, she’s a wily one.

We have some predictions that we feel we’d like to share. I’d listen, Don, and you too Hillary. We bought some puts.

Short Term (3 months) Predictions

• The stock market will drop, bounce slightly, and then drop some more. It’s going to drop more because the Brexit rally pre-vote was based on complacency. There was a great deal of complacency built into the market.
• After a slight bounce, earnings will disappoint and forecasts will begin to come in below current expectations. A further decline will ensue.
• The animosity between the two political sides in the U.S. will increase. The Clinton side will pile on the need to maintain the world order, keep working with our trading partners and consider the impact on the people.
• The Trump side will tout how the status quo has failed and that the people of the UK have told the world, finally, that they aren’t going to put up with it anymore.

Mid-Term (3 months to 5 years)

• A global recession will ensue. Fear of change will beget conservative investing. A great deal of money and effort will go into efforts that suck even more from economic growth. These efforts include changing the legal agreements, reorganizing companies and updating accounting policies to accommodate the separation. This will primarily impact the European Union, but it will also impact the United States and other nations.
• There will be a major EU fight between those who will dig in their heels in support of existing policies and those who want change, more freedom and a more entrepreneurial work environment. It’s going to last a while.
• Additional nations will leave the EU. Spain, Italy and Denmark, Bernie’s favorite country, already have efforts in that direction. If it’s not those who leave, others will.
• The remaining EU will consolidate and grow tighter while the periphery will move farther away.
• As much as our middle class has been gutted by the ACA tax, we are still better off that many parts of the world. The dollar will continue to rise. A European vacation may be in order.

On our relationship with Europe.

• If Trump wins, Britain and the US will tighten their relationship.
• If Clinton wins, a strengthening will still occur, but much more focus will go towards the remaining EU countries who share her global vision more.

Longer term predictions will come later.

Good luck, Don, and to you too Hillary. We’re just watching.