@dallyshalla They’re voting to leave the european union
Hello, i’ve heard some crazy statments in my socialist third world forums and press about Brexit…
Could you guys ramble about it? (This brexit thing will be forget by markets in days i believe)
Yes after 40 years of being included in the European Union Britain has decided to no longer be a part of it. European Union membership gives many benefits in terms of ease of trade. So by being a member and included gives less tariff impact for instance, chance to participate in decisions of the group, freedom to travel within the European Union territory at ease without much passport control. Things of this nature.
Now that Britain has decided to be independent of the European Union after 40 years now, it means that it is no longer integrated to this trade group. As such it is treated less favourably than it was when it was a member from before. However, Britain gains some benefits such as control over its own economy and sovereignty. For instance being a member of the European Union would mean maintaining some level of immigration that is determined by the central EU group. Also trade relationships would be influenced heavily by the EU membership. So from here Britain can do decisions with autonomy independent of the interests of all other member countries of the European Union.
In my opinion the risk of this action that has occurred is that other nations too can decide to exit the European Union and especially since most of the applicants to enter the EU are not top tier economies, and likely seeking the benefits of the Euro monetary system for its citizens. A noble thing indeed yet if you see what happens to Spain, Portugal, Italy, and Greece then you can see that this Euro monetary system is taken advantage of to full extent where also other nations within the European Union including Germany see big debt issues.
As a result of the decision the world of the earth has become a bigger place, since Brits are no longer directly members of the EU, and the random walk of activities is now more free, more “out there” to roam the wild than it was before which means many new events are more likely to take place than before when Britain was a member of the trade group.
I see this event as the beginning of the end of this keynesian party (at last!). Brits put pressure to Euro (i think it will be gone by 2020) and Yellen’s QE4.
The most singular comment was made by a friend of mine, that the elderly has condemned the young brits to a miserable life… I disagree, i think in the long run will be positive for independent britain, you can’t be certain that things go to hell there. There will be winnings and losses for differents industries but at an ethical view and an overall one, i believe it will be positive. Britain was carring too much deadweight.
And this friend of mine conveniently forgets that the whole welfare state is created by debt made by the elderly, which will be paid by unborn people in the future. He refuses to credit this brexit decision as a democratic one, but he ignores this debt issue (he assumes it as democratic).
Investors should not see it as football fans and understand that is a symptom of a diing ponzi scheme. My recipe for surviving it is hard and crypto assets. Bitcoin spiked on Brexit, showing that people is seeing it as an alternative to gold in this stress moments.
SP500 posts a new All Time High
SDS on a new all time low, risk is at its highest, USD is at its strongest point in almost a decade. The value of dollars tends to rise, since there will be a tremendous demand for those dollars when selling stocks. Think, right now I have stocks… I need dollars to get out of those stocks, so someone has to give up their dollars to me so I can sell out of the stocks. Hence prior to stock collapses, the value of the dollar rises in anticipation of demand for those dollars.
We see the same event happen in alt coin markets where alt coins decline in anticipation of Bitcoin gains.
…we all know that dolars are unlimited (can be printed), but we also know there is a very large ammount of them in bonds.
At this moment, bonds and stocks are simply the same: both gains come from capital gains, no more on yields. Both are held by State efforts.
Yet, gold and silver are also rising, what a strange world…
The question i make: where all those dolars will go to and from where they will come (remember, banks are exausted already)?
All assets baskets (real states, currencies, bonds) seem to be in bubble formation (except for gold/silver, physichal). Even Gold in Comex has record leverage.
What do you guys think? We will see dolars disapering from (central and private) bank balances?! lol
Hey, forgot to mention:
- Monday: Monti Paschi;
- Thursday: Terrorists at Nice;
- Friday: Turkish coup.
Yet all Stock exchanges with positive weeks… strange, strange world:
Dow 30 +2.04%
S&P 500 +1.49%
SmallCap 2000 +2.60%
S&P 500 VIX -4.02%
TR Canada 50 +1.91%
FTSE 100 +1.19%
CAC 40 +4.34%
Euro Stoxx 50 +4.12%
IBEX 35 +4.22%
FTSE MIB +4.25%
PSI 20 +2.38%
BEL 20 +2.75%
BIST 100 +6.16%
TA 25 +3.44%
Tadawul All Share +2.49%
Nikkei 225 +9.21%
S&P/ASX 200 +3.81%
DJ New Zealand +0.86%
China A50 +2.07%
DJ Shanghai +2.29%
Hang Seng +5.33%
Taiwan Weighted +3.58%
IDX Composite +2.79%
Nifty 50 +2.62%
BSE Sensex +2.62%
CSE All-Share +0.89%
Well since most of the dollars printed by government going into the stock market, will have to go back to the FED, and interest paid by the public. Going to be plenty of bag holders. Even as the world collapses equities rise, is to me a clear sign that the intention is to have the salivation of the public occur even when world events are harsh. This way they might be deceived that things are good in the equities markets as long as possible, consider how huge the position of the US govt. would be on the stock market and how long and difficult it has to be to unwind it.
I don’t have an actual position on it, but looks too good to be true that actually could materialize. Shorting the SP500
Dally, i wouldn’t short S&P, simply because i don’t know for how long this insane party can go on…
Price discovery is clearly broken…
As i’m not a trader, in my asset basket i’m long for Brazilian reits (they are not leveraged as American or european reits, they are pure bricks lol). I try to hedge them with bitcoins and crypto.
Bitcoins/crypto are fulfilling the place of physichal gold/silver. Unfortunatelly they are not available at affordable processo here.
So, i’m with 75℅ in hard assets and 25℅ in bitcoin/crypto. My dividends are going to crypto since january.
Dally, i’m curious, what are you guys up there doing, except shorting stocks? Is there an exotic hard asset basket (not real state… I heard they are in bubble formation as well) that i’m not aware of?
You guys are doing just like Buffet, buying railroads or gold mining stocks (hard assets)?
I’m completely focused in on crypto, I think that it is an asset class that will continue to grow and expand. Also, I do pay attention to forex as well.
I think people generally are just bought into the stock market by their brokers. Otherwise wealthy people have been increasingly been participating in private equity investments, in other words financing private companies that are generating revenue. Can call this “little buffets”.
You’re right about the party might not end, and I don’t have a position on it and very likely won’t put one; though it is a fascinating trend that 100% will have to unwind, no doubt. Maybe the central govt. is using the stock index as a score card and hope stick. The flat line to me looks like, individuals still buying; and someone is consistently selling.
If there is a correction, I do hope plenty of private individuals got out and do good things with their gains.