Yes to Brexit

In short, the markets got hammered today after the news that Britain is leaving the EU. It’s stunning to me how violently the markets have reacted to this news. All in all I don’t view this as a good or bad decision, it is too early to tell right now. And I’m certain if the story was about Greece leaving the EU, markets would have reacted very differently.

First off, Britain has been a shining star in a sea of European muck and mire. The British economy has done relatively well while mainland Europe has done everything they can to simply survive. To me the decision boiled down to the fact Britain no longer wanted to be anchored to the poor decisions and performance of the rest of Europe. They’ve also been struggling to keep up with the waves of immigrants from other EU countries.

Secondly, unless the EU decides to turn their back on the British economy, nothing should change. Of course the EU could decide to be hostile and punish Britain for this decision. If that happens I could see companies leaving Britain in order to avoid these economic hardships. The question you need to ask though is, who would this benefit? The answer is no one so I doubt it would happen. But we will have to wait and see.

Third the markets have been jumpy for a while. The markets have been searching for anything, even the slightest off news in order to tank. The vast amount of economic uncertainty around the globe right now is the real issue. The Brexit results have just pushed the bear down the hill. It will be years before we know how this decision will truly effect things.

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