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Friday, June 24, 2016

TOLD YA SO


So England voted to leave the EZ, just like I told you they would.

The UK voters don't care about economics, sorry. The vote wasn't about property values or anything. The vote was about driving out the darkies and the polaks, and anyone who remembers the glory days of Enoch Powell would have been able to predict this vote.

It's really quite simple. The English are so racist that they hate Belgians. Why would you expect the vote to be any different?

And it's a fact that old people vote more than young people, and country folk vote more than city folk, so just ask yourself how you'd expect a 75-year-old uneducated bitch from the Forest of Deane to cast her vote and that should have been your prediction for the referendum.

So what now?

The market has grossly overreacted to the vote, considering it'll still take 3 months to find a new PM, then another several months of negotiating the terms of negotiations, then 2 years of Article 50.

Still, the UK will go into an immediate recession, since the #1 result of this will be a drop in investment spending ex-real estate, and the investment cycle drives the economic cycle. Investment should drop even more in Scotland and NI, since nobody knows which way either of them go from here. Sinn Fein is actually calling for an immediate border vote under the GFA, which they can do if they don't mind a new war with the Ulster Loyalists; meanwhile, the SNP can successfully argue that the EZ referendum result is a sufficient enough change to Scotland's position in the UK that a new Scottish independence referendum has automatically been triggered.

And the Conservatives will respond with an austerity budget that amplifies the economic collapse, because the entire world political class ex-Trudeau still thinks austerity is the cure for everything.

The drop in the pound doesn't help the UK one bit trade-wise, because a) they just tore up the FTA they had with their largest single trading partner, and b) nobody else is going to forge new trade ties with the UK when they're facing 3 years of uncertainty about who the hell they're dealing with and under what treaty.

One thing I can predict with certainty, being a Canadian who's experienced the silliness of a Quebec "independence but not really" referendum, is that the centrist (semi-Leave, semi-Remain) element will band together to move forward with a strategy of negotiating "independence but not really". The ideal would be an agreement that can convince Joe Oik that yes, we're still going to ship out all the Romanians on cattle-cars, you've won, but hey look at this we're also going to hammer out a new agreement that gives us all the goodness of independence while also giving us all the goodness of remaining in the EZ except we won't call it "remaining in the EZ" because we won't be in the EZ but we will but stumm.

Thus they can rescue Joe City of London's balls from the fire while simultaneously convincing at least 10% of Joe Headbutts that hey, this new EZ "sovereign partnership agreement" will be just as good as independence, in fact it's what you voted for, you wanted the Turks out of Stoke didn't you, well here you go.

The problem I can see with that is that the big prize in this negotiation is the possible relocation of the EZ's banking centre. We know for a fact that Deutsche Bank & the rest of the continental banks have their hands up Merkel & Schauble's butts, so there's no way the Germans will consent to the City remaining in business.

Really, I don't know who the hell the City has on their side in Europe: fact is, the twats were only useful while they were useful. Now they're prey.

Plus it might be that Germany and France go out of their way to more generally take England's knees out, as a way of warning the others (Greece certainly, but also the neo-Nazi Russian-funded East like Hungary and Slovakia) that leaving the EZ earns you destruction with malice aforethought. They may want to really make an example out of England.

Meanwhile, this changes nothing for equities: British and European stocks universally sucked before today, and they are going to continue sucking for the next several years. Which means your buddy who went long EZ stocks 6 months ago because of their awesome low valuations is proven to be a fucking clueless idiot yet again. There has literally been no company from Europe that was worth investing in at any time over the past 20 years, save Nokia.

The US may freak out for a couple days on this vote. You can expect a few other freakout days at various points in the future as various milestones are passed. Britain will indeed go into a deep recession. You may expect snits from other miserable European countries. But the US is still the best equity market in the world.

I guess the one significant change is that rich white people now may feel they have reason to stick more gold in vaults. But that's a longer-term trend issue: last night's pop in gold should likely get worn off.


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