Monetary policy is so stretched worldwide that a radical re-think about how support is provided to the economy is needed, even at a time when the U.K.’s exit from the European Union risks placing fresh demands on central banks.
Oil prices dropped around half a percent on Monday, extending sharp declines after Britain's vote to leave the European Union sparked a sharp selloff in global markets on Friday amid concerns over risk aversion.
I recently wrote this to my totally Europhile European email group, which has hedge fund managers, economists, journalists, insurance and pension fund asset managers, and even a few politicians from across Europe (every country from the UK to Latvia has a few people in the group, and a few fund managers from the US, Australia and Israel are also members).
A few days before the Brexit, they had all written paeans on the EU, and expressed both their expectation and hope that the UK would remain, while chiding the “leave” campaign for its intellectual inferiority. I was incredibly busy (still am) and didn’t find the time to properly join the debate. But one day before the referendum I felt I simply had to say SOMETHING to disrupt this love-fest.
So I wrote this (I was very polite, but it was met with speechlessness for a little moment. I did get several very friendly and well thought out replies after a while though. You must understand, these people are my friends, and I like them and they like me, generally. They know of course that my opinions on these things are very different from those of most of the European elite):
Leaving aside the “we’re doing it for peace” argument, which wily EU politicians tacked on out of the blue 40 or 50 years after the EEC was founded in order to cartelize the then state-owned coal and steel industries, what exactly are the advantages of being in the EU? If we want to have free trade, do we really need a bureaucratic Leviathan in Brussels regulating every nook and cranny of our lives? NO. We need the back of a napkin, on which we could write: “Henceforth, there will be no more tariffs between us”.
Today the EU primarily serves a tone-deaf bureaucratic and political class, which
Notes: The Scottish parliament is in the Holyrood section of Edinburgh, the capital of Scotland. MSP stands for members of Scottish parliament. Nicola Sturgeon is leader of the Scottish National Party (SNP).
Scotland’s First Minister Nicola Sturgeon has told the BBC that Holyrood could try to block the UK’s exit from the EU.
SNP leader Ms Sturgeon said that “of course” she would ask MSPs to refuse to give their “legislative consent”.
Constitutional law expert and Conservative MSP Adam Tomkins tweeted that Holyrood had no power to veto the UK’s withdrawal.
Mr Tomkins – who backed the Remain side of the referendum campaign – said that while Holyrood had the power to withhold consent, that was not the same as blocking.
Another Scotland Referendum?
The veto threat is a mirage. What about another referendum?
The nannycrats in Brussels have another thing to worry about today. Exit polls show Mariano Rajoy’s PP party will win the most seats in Spanish elections held today, but Unidos Podemos (United We Can) plus PSOE socialists are likely to achieve an absolute majority.
If the polls are reasonably close, and we will know within hours, the parliament makeup according to El Confidencial26, 2106 is as follows.
There are only two real possibilities now
United We Can plus PSOE form a government
PSOE and Ciudadanos both abstain allowing PP to setup a minority government.
If United We Can comes in with 95+, it’s possible PP would not have a majority even if PSOE and Ciudadanos both abstain. The price for such an alliance (if possible) would surely be prime minister Mariano Rajoy’s head.
If these results hold, Mariano Rajoy is toast one way or another.
While the political chaos slamming the UK over the weekend, will be its own chapter in the history books one day, with UK's dynamic leadership duo of Cameron and Osborne suddenly nowhere to be seen while the Labour party is undergoing a rebellion even as Boris Johnson has yet to make a concerted push to claim the victory the British people unexpectedly handed him, things in Europe are no better. Case in point, Europe's collective (or rather not so much) on the next major catalyst in the UK's exit from the Eurozone, which as we explained previously, is the moment Article 50 is triggered, widely expected to take place some time over the next several months if not much sooner.
According to Reuters, the EU is allegedly interested in a quick and clean divorce, reporting that Britain need not send a formal letter to the European Union to trigger a two-year countdown to its exit from the bloc, EU officials said, implying British Prime Minister David Cameron could start the process when he speaks at a summit on Tuesday.
The potential delay in the triggering of Article 50 has been interpreted by some as a case of Buyer's (or perhaps seller's) remorse, going so far as to suggest that a Boris Johnson cabinet may never invoke it at all, and instead opt to remain in the EU, openly defying the will of the majority.
"'Triggering' … could either be a letter to the president of the European Council or an official statement at a meeting of the European Council duly noted in the official records of the meeting," a spokesman for the council of EU leaders said.
Why does the EU want a quick response? According to a second EU official cited by Reuters, who noted the mounting frustration among leaders with the British prime minister's delay in delivering the formal notification required to launch divorce proceedings, "It doesn't have to be written. He can just say it." Cameron will brief the other 27 national leaders over dinner at a European Council summit in Brussels on Tuesday on the outcome of Thursday's referendum at which Britons voted to leave the EU, prompting him to announce he will
Any “faint prospect” of a Fed July rate increase has entirely vanished, ING economist Rob Carnell wrote in note adding that the longstanding ING call for Sept. hike looks to be “hanging in tatters.” Here are more comments, courtesy of Bloomberg, from Wall Steet's so-called experts, none of whom predicted the actual a Brexit outcome, about U.S. monetary policy outlook following the outcome of the U.K. referendum.
BofAML (Ethan Harris, others)
Next Fed hike now seen in Dec., not Sept.
Brexit vote is another in “long string of confidence shocks,” will reduce U.S. GDP by an est. 0.2ppts over next 6 qtrs
BoT-Mits (Cliff Tan)
Brexit will tighten financial conditions, mkt reaction is going to possibly be “pretty severe” over next few trading days
Janus Capital (Bill Gross)
Fed’s dots have no future relevancy
Brexit was storming of the gates of finance by populists
JPMorgan (Michael Feroli)
Fed now seen hiking in Dec., not Sept.
There’s “exceptionally low visibility” on monetary policy outlook now
Macquarie (David Doyle, Brendan Livingstone)
Fed could need mos. to get clear picture about Brexit’s effect on global outlook
Unlikely to be full clarity before Sept.
Renaissance Macro (Neil Dutta)
FOMC to stand pat in July, Sept.; 50% odds of Dec. move
Fed might hike in Dec. if labor mkt recovers, estimates of GDP remain ~2%, financial conditions ease
Stifel (Lindsey Piegza)
Fed “has no other option but to remain on sidelines”
Uncertainty, volatility from Brexit takes any near-term hike “off the table”
Warburg (Carsten Klude)
Fed may lower rates if Brexit-fueled volatility lasts
Lowering of rates may occur before autumn if equity mkts experience sustained turbulence
Fed funds futures price 1st rate hike to 0.50%-0.75% range as more than likely for Nov.-Dec. 2017 as of Fri., compared with Jan. 2017 at Thur.’s close. Also, as noted on Friday, there is a greater probability of a rate cut than a rate hike now.
Angela Merkel, the German chancellor, has attempted to rein in pressure from within Europe to force Britain quickly to trigger divorce proceedings with the EU, saying that while “it shouldn’t take forever”, rushing into an exit was unwarranted.
Ms Merkel’s cautious words, coming during a day-long gathering of her CDU/CSU bloc, came in stark contrast to those from other EU leaders, including European Commission president Jean-Claude Juncker and even some within her own government, pushing for immediate Brexit.
Mr Juncker told German media that he would like Brexit proceedings “to get started immediately”.
“Britons decided . . . that they want to leave the European Union, so it doesn’t make any sense to wait until October to try to negotiate the terms of their departure,” Mr Juncker said.
Similarly, foreign ministers of the founding six EU states, who held a hastily arranged meeting in Berlin on Saturday, also urged quick action. Jean-Marc Ayrault, the French foreign minister, said it should only take “a few days” for a new UK leader to invoke Article 50 of the Lisbon treaty, which begins two-year exit proceedings.
Mr Schulz and Sigmar Gabriel, Ms Merkel’s deputy chancellor — acting as German social democrats — have put forward a 10-point EU reform plan proposing more power for national parliaments and the EU parliament. They criticise the union for taking decisions at closed-door gatherings of the 28 leaders — an approach favoured by Ms Merkel.
Ms Merkel, who has resisted any moves that would separate the core six founding EU members from the rest of the bloc, emphasised that any decision on a way forward with Britain should be taken with all member states. At an EU summit next week, the leaders of the 27 remaining members are expected to meet without Mr Cameron in the room.
Texas businessman Chris Faulkner charmed hundreds of investors and major media companies into believing he had extensive experience in energy markets, but, as Bloomberg reports, it turns out the self-proclaimed "frack master" had none and that at least $30 million he raised was spent on strippers, escorts, lavish vacations and other personal expenses.
By Jacob Wolinsky. Originally published at ValueWalk.
In this discussion, students from the University of Nebraska got to ask Bill Gates and Warren Buffett questions of their choosing. The questions vary widely and can be found below. Warren Buffett and Bill Gates are two of the richest people in the world and their answers and advice are invaluable to anyone looking for success.
Date: September 2005
Location: University of Nebraska
We continue to receive requests for updates to the "Best Stock Market Indicator", which used to be a regular guest post from John Carlucci. Here is an update of the "Carlucci" indicator along with a summary of John's explanation on how he uses it.
As John described it: "The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the "sweet spot" time period in the market when you have the best chance of making money."
I have mixed feelings about Brexit today. Clearly the European institution need reforming. The addition of so many countries in the last 20 years has created a top heavy administration. The Euro adds more complexities to the equation as the ECB policies cannot fit every country's problem. On the other hand, a unified Europe has advantages as well – some countries have benefited from the integration.
For Britain, it's hard to say what the final price will be. My guess is that Scotland might now vote for independence as they supported staying in Europe overwhelmingly. Northern Ireland might be tempted to leave as well so possibly RIP UK in the long run. I was talking to some French people and they were saying that now there might be no incentive for France to stop immigrants from crossing over to the UK like they do now and simply allow for travel there and let the UK deal with them. The end game is not clear to anyone at the moment....
One week ago, when bitcoin first crossed above $700 on the seemingly insatiable Chinese buying which we forecast last September (when bitcoin was trading at $230) would take place as a result of China's capital controls (to much pushback by the "mainstream" financial media), we tried to predict what may happen next. We said that "it could go much higher. That said, anyone who bought last September when the digital currency was trading at $230 may be advised to take some profits, and at least make...
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After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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