If you are like me, last Friday you were pondering, “I wonder how the Brexit is going to affect my business”.
So I went searching for hard facts and analysis from leading authorities. I found a post by Matthew Bishop, an editor at The Economist, perhaps the leading authority on global economics. After all, they invented the Big Mac Index (http://www.economist.com/content/big-mac-index) that compares the cost of a Big Mac in every currency simultaneously, enabling the entire world to instantly view the relative strength/weakness of every currency.
In case you missed Matthew’s treatise, here’s the link:https://www.linkedin.com/pulse/uncool-britannia-how-britains-vote-brexit-hurt-your-business-bishop?trk=hp-feed-article-title-comment
And here is my post in response:
Don’t know that I agree with your police work there Matthew. We need facts.
Chaos – yes, definitely today, but give the markets ‘til Tuesday morning. When everyone realizes they weren’t hit in the drive-by, no bullet holes, it’s back to business. Remember, the vote was non-binding so Parliament must now do some dirty work and THEN a mandatory two year break-up process begins. The exit process was smartly designed to minimize collateral damage.
Likely and long period of uncertainty – hmmm, by Monday it won’t even be yesterday’s news. Donald, Hillary, or fill in the blank, will do something crazy by Sunday night then we will be on a fresh news cycle.
Intense stress – like the subprime mortgage stress? Probably less – significantly less.
We all feel bad that globalization took a hit but a subprime hit it was not. You hinted at the real villain lurking in the shadows – all the world economies are struggling to return to growth post-Great Recession, having been kept alive, limping along, supported by unprecedented printing of money. This massive monetary experiment is about to have its BIG reveal. The Brexit probably won’t even be a factor. It might be blamed as a “catalyst” but in reality the business world has already taken this in stride. Markets got hammered all the way back to last week’s starting values. London will still be the world’s financial center in ten years. The only difference will be the billions of pounds lawyers will make re-documenting everything they can get their hands on. British politics is always devolving into an ugly vicious battle over something. This at least gives MPs something material to argue about. Keep them off the streets and out of the pubs.
100 quid says it’s up from here