What's going on with the US stock market lately?

[NorthStar]

The US stock market is due for some more rude awakening, in face of the latest news from Europe and the UK...

Get gold. :b

 

[Barry2013]

And France an even bigger one?

 

[ack]

The Brexit situation quickly reminds me of a Fatberg

https://www.washingtonpost.com/news...ng-ten-ton-fatberg-that-broke-a-london-sewer/
http://www.bbc.co.uk/newsbeat/article/23586290/britains-biggest-fatberg-removed-from-london-sewer
http://www.bbc.com/future/story/20160623-london-has-a-secret-river-flowing-beneath-its-streets

 

[NorthStar]

The third link is like a horror movie.

 

[Barry2013]

Investors and those outside the UK may find the following information on the UK's EU referendum helpful.
The referendum was purely advisory and it has no legal or statutory force. It's standing is entirely political but nevertheless considerable.
The UK's departure from the EU can only be triggered by an application by the UK government under article 50 of the Lisbon Treaty. The present Government will not make such an application and will leave it to the next Government which will not be formed until early October after the Conservative Party's leadership election has been concluded. The EU does not like that but does not appear to have any power to change it.The UK politicians in favour of leaving the EU have not supported a speedy article 50 application and have called for talks outside of that article.
In short it would be mistaken to conclude that the UK's departure from the EU has been irrevocably decided and the outcome is not yet certain.

 

[Ron Resnick]

. . . In short it would be mistaken to conclude that the UK's departure from the EU has been irrevocably decided and the outcome is not yet certain.

Thank you for your post, Barry. The UK is a very serious, responsible country. While the disengagement button has not yet been pushed do you really think there is any material likelihood that the outcome of a legitimate national vote will be thwarted?

 

[ddk]

Thank you for your post, Barry. The UK is a very serious, responsible country. While the disengagement button has not yet been pushed do you really think there is any material likelihood that the outcome of a legitimate national vote will be thwarted?

Unfortunately Ron as Barry points out its not done until the fat lady sings. Politicians are the same all over we have to wait and see if they'll follow through with Brexit or just play the game and pass the buck down road for years to come. I bet Merkel and her administration are already busy working out how to thwart Brexit. The fact that the Referendum is just a hollow voice with no power should tell you what you're dealing with, not much different from what we are facing at home. I wish the Brits all the luck & power they need to leave EU, seems like the next election is make or break too.
david

 

[Barry2013]

Thanks Ron.
Even by EU standards we really are in uncharted waters but it has a track record of managing to cobble something together in the most difficult of circumstances.
The logistics of a UK departure - legal,economic,political and constitutional- are of unprecedented difficulty.
The stakes are huge and the outcome has to be regarded as uncertain notwithstanding the outcome of the referendum.
In the UK Parliament is supreme and about 500 of the 650 Members of Parliament are pro EU.
A deal which keeps the UK in the EU cannot be ruled out.

 

[Folsom]

That's very interesting Barry. I have to say I do hope that the people of the UK win on this... I'm not saying it would be good for me, but I have to respect their autonomy; and greatly so cannot approve of officials acting like a ruling class over them and blocking the following actions. There's the potential they'll regret it, who knows, but they should get the respect to make their own mistake.

 

[Barry2013]

That's very interesting Barry. I have to say I do hope that the people of the UK win on this... I'm not saying it would be good for me, but I have to respect their autonomy; and greatly so cannot approve of officials acting like a ruling class over them and blocking the following actions. There's the potential they'll regret it, who knows, but they should get the respect to make their own mistake.

The problem is that people voted without any real understanding of what would be the practical consequences of leaving the EU, the leave campaign did not know themselves,did not know what they would do if they won and still do not know.
Nobody expected a majority vote to leave so nobody had any plans for what to do if that was the outcome.
The present PM is refusing to make any formal application to leave and clearly takes the view that that is for his successor. Any formal application under Article 50 of the Lisbon Treaty cannot be withdrawn once made and starts a process of negotiation of the terms of withdrawal which have to be concluded within a period of two years from the date of application. Nobody knows what the outcome would be and how acceptable that would be to the electorate. Nor is it just the trade negotiations which are a nightmare in themselves, it is also the fact that huge chunks of UK law are a straight carry over of EU law which would have to be replaced with new/amended/how amended UK law.
The leading out campaigner has yet to announce what he will do and is almost certainly still trying to find the answers to that question.
In addition the main opposition party, the Labour Party is now in a full scale leadership crisis. About a third of the Shadow Cabinet has resigned, a vote of no confidence in the Leader has been submitted and is likely to be voted upon by Labour MPs and MEPs within 48 hours. A Labour Party leadership election is almost certain.The Labour Party is pro EU but a lot of their supporters voted to leave.
Scotland which has devolved powers voted solidly to remain and the Scottish National Party which has a big majority in the Scottish Parliament is determined to stay in the EU
The Leave politicians almost certainly cannot deliver on their campaign promises.
Mega uncertainty so tread carefully and watch this space.

 

[Folsom]

Well, I'm not overly envious of your location. However, I look at a little differently. Yes I understand that probably almost no one that voted to leave truly understands much about politics. But what the politicians need to understand is that the people are frustrated and this is an accumulation of that. Their vote to leave the EU is a vote of no confidence in the current system. Things need to change is the point. Some stress will cause changes good and bad; but it's usually impossible to be sure how good or bad they are until they happen and coping functions begin.

The USA has similar confidence issues, but no expression for them. Well, not entirely, but I'd say Trumps political career is a form of expression that's about the same as UK's vote out of the EU.

The alternative to no change is the dwindling common person into a communist level of required social support... so... it's not a surprise to see people being bold, even if stupid.

 

[FrantzM]

The problem is that people voted without any real understanding of what would be the practical consequences of leaving the EU, the leave campaign did not know themselves,did not know what they would do if they won and still do not know.
Nobody expected a majority vote to leave so nobody had any plans for what to do if that was the outcome.
The present PM is refusing to make any formal application to leave and clearly takes the view that that is for his successor. Any formal application under Article 50 of the Lisbon Treaty cannot be withdrawn once made and starts a process of negotiation of the terms of withdrawal which have to be concluded within a period of two years from the date of application. Nobody knows what the outcome would be and how acceptable that would be to the electorate. Nor is it just the trade negotiations which are a nightmare in themselves, it is also the fact that huge chunks of UK law are a straight carry over of EU law which would have to be replaced with new/amended/how amended UK law.
The leading out campaigner has yet to announce what he will do and is almost certainly still trying to find the answers to that question.
In addition the main opposition party, the Labour Party is now in a full scale leadership crisis. About a third of the Shadow Cabinet has resigned, a vote of no confidence in the Leader has been submitted and is likely to be voted upon by Labour MPs and MEPs within 48 hours. A Labour Party leadership election is almost certain.The Labour Party is pro EU but a lot of their supporters voted to leave.
Scotland which has devolved powers voted solidly to remain and the Scottish National Party which has a big majority in the Scottish Parliament is determined to stay in the EU
The Leave politicians almost certainly cannot deliver on their campaign promises.
Mega uncertainty so tread carefully and watch this space.

Hi

I am reading some European papers and it seems that this could cause a lot of trouble to the notion of Great Britain. I your posts help me understand a lot more yet I feel that the UK will be diminished no matter what happens next. There seems to be some unaddressed social issue in the UK and they're being brought to the forefront. In particular the rift between the different parts of the UK strongly Challenge the "United" in "UK". Europe has a whole doesn't seem to like the vote ... The French president himself has called for a "quick divorce " and his sentiments are echoed in other parts of Europe... We'll see what the future has in stock but it doesn't look good so far.

 

[andromedaaudio]

The only people inside the EU that can " propose laws" are EU commision members which are non elected people and cannot be sacked by voters
I dont think that the brits have " voted out" for primarily economic reasons .



https://www.youtube.com/watch?v=-0WeURiShfU

 

[Folsom]

Sounds like everyone should get out.

 

[ddk]

Sounds like everyone should get out.

Unfortunately the way the laws are written leaving EU isn't up to the nation but only a few politicians who're in power. It's a scary bureaucracy designed to keep power in the hands of a select few in the inner circle...

david

 

[Folsom]

I figured that video had a few extremes. Here's another that shows it from a perspective not on the ground floor. However it leaves out some very important things. First the signs of an economy doing well are not necessarily tied to the health of the average citizen's economic opportunity, wealth, or stability - that can't be overstated. And it does not cover sovereignty appropriately, rather just says that the UK has a substantial body of representatives; that are welcome to complain but not legislate.

And a little movie on it. I haven't watched it all, but once it gets to tariffs it gets a bit confused. And by a bit I mean extraordinary so... they compare themselves to the growth of China; which is utterly insane given how China falsifies growth constantly. I really don't know what to think for sure, exactly, but I wouldn't put all my eggs in any baskets with the UK or EU.

 

[andromedaaudio]

Another great short entry at 2131 , if that is the case then there is definetively a connection between numbers and the stockmarket .
You cant predict it but it seems it is attracted to numbers , support /resistance

 

[YashN]

The Brexit referendum results is but a drop in the ocean, but can nevertheless be a small catalyst.

Some of the real pressure will probably come from Italian banks as well as Deutsche Bank, the latter having a humongous exposure to derivatives.

We'll see this time if and how as Roubini said 'the profits are privatised and the losses are socialised' blatantly as last time, and contrary to Iceland, we don't see many put behind bars.

On top of that, we're being told the LIBOR scandal is the result of a gang of three.

'Yeah, right' sounds like an appropriate response.

There are fishy things going on with COMEX metals as well.

And I'm sure much, much more that I'm not aware of. I scrutinised everything in 2007: I was working for a company which despite its own values (written and transmitted to all employees) sells a platform for ForEx trading and I was wondering how traders and investors react in times of crisis.

I learned a lot during that time and subsequent years, including things that are only surfacing nowadays.

But more importantly, what I wanted to know since then was whether things would change fundamentally and how the people would ensure that.

Thing is: there hasn't been any fundamental change. So without making any particular forecast although the weakness in the progression of the S & P can be easily seen on a chart, a severe downturn would be normal and perhaps even healthy overall, provided the lasting and fundamental change are envisioned and implemented (of this, there is no guarantee since the last crisis showed everything that needed to be shown, the corruption of institutions and the diversion away from primary goals, etc... yet nothing was done except socialise the losses).

Personally, I'd be short-biased and after a crash, would look for opportunities. (typos are caused by my defective wireless keyboard)

 

[YashN]

The Brexit referendum results is but a drop in the ocean, but can nevertheless be a small catalyst.

Some of the real pressure will probably come from Italian banks as well as Deutsche Bank, the latter having a humongous exposure to derivatives.

Of interest:

Charting the Epic Collapse of the World's Most Systemically Dangerous Bank.

 

[YashN]

And... new highs!

'The markets can stay irrational longer than you can remain solvent.'