Events
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If the UK, a prestigious risk averse country with a long history of ‘political correctness and stability ‘decides to do something so unconventional ( to leave Europe) then it is logical that other countries (South Europe) with higher problems will probably follow… From Trump then to Le pen and then the domino effect will take place faster around the world. Probably elites have some time to prevent it or is too late?
No one expected that a Brexit will occur. These systematic shocks give traders a unique opportunity to make money. The more unexpected and shocking the event the more profit can be potentially made as large hedge funds and position investors will try to reposition within few hours huge amounts of money in order to avoid the mother of all losses.
The market before Brexit acted with ridiculous confidence and arrogance by giving 80% probabilities that Brexit will not occur. Brexit gave us a good lesson that in a world that changes rapidly, it is not wrong to expect the unexpected, particularly when there are obvious increasing signs of anger and disappointment within society. Others believe that the UK is a very big player in the global area. In order to be damaged (particularly in a longer term) by a Brexit, this opinion gains momentum as the catastrophic projections for the ‘’end of world if Brexit takes place’’ did not occur. The systematic risk proved to be lacking.
Political crisis usually leads to economic crisis. We might see this probably in the near future in UK , however the increasing probability that J Corbyn will leave the leadership of Labor party and the election of Teresa May can give a strong support and regain confidence in the markets about the future of the UK in the post Brexit period.
Others might contemplate that as we enter in an extended period of global uncertainty where governments have decided to play ‘’All –in’’, in order to survive the old political system they will introduce ‘helicopter money’.
