2016-07-02

Brexit Postscript: FTSE100 Roars, Theresa May, Sword in Hand, Next PM?

British Major Jack Churchill (far right) leads Commandos, sword in hand (World War II photo - public domain)
Enjoy your weekend! Here's a review, with links, to follow-up Domain Mondo's posts on Brexit:

•  After ‘Brexecution,’ the man who betrayed Boris Johnson speaks out | WashingtonPost.com"A day after staging a political ambush that reshaped the race to be Britain’s next prime minister, Michael Gove said Friday he acted out of “conviction, not ambition”... [Theresa] May [now favored to win] would be the second female prime minister in British history, after Margaret Thatcher. May’s unsmiling public persona and hard-line conservative politics have drawn occasional comparisons to the Iron Lady ..."  

Theresa May may be exactly the right person to lead the UK, with nerves, and persona, made of steel. She has already said the UK will leave the EU, but on terms, and timing, the UK chooses, not the EU.

UPDATE July 7, 2016: Theresa May and Andrea Leadsom to vie for Iron Lady’s Mantle as ‘Hard as Nails’ U.K. Prime Minister--read more at Bloomberg.com and London Property Market: Massive Undersupply, Cheap Pound, Uncertainty | DomainMondo.com.

•  There Will Be No Early General Election | washingtonsblog.com"The new PM [UK Prime Minister] will have 3.5 years in Downing Street with a working Commons majority. As I predicted, the temperature of debate in the Tory party has cooled almost completely. Their leadership contest is genteel. People who were accusing each other of outright lies and appalling behaviour just one week ago, are now all chummy together again. The Tories care about power above all else. They have it and won’t risk it."

• Eric Schmidt on Brexit: 'Unlikely' to Hurt Google's British Operations | Fortune.com"Though he said he doesn’t understand the reason for the vote ..." Really? Maybe Eric Schmidt should read: Brexit Is Only the Latest Proof of the Insularity and Failure of Western Establishment Institutions | TheIntercept.com by Glen Greenwald: "The decision by U.K. voters to leave the EU is such a glaring repudiation of the wisdom and relevance of elite political and media institutions that — for once — their failures have become a prominent part of the storyline. Media reaction to the Brexit vote falls into two general categories: (1) earnest, candid attempts to understand what motivated voters to make this choice ... and (2) petulant, self-serving, simple-minded attacks on disobedient pro-Leave voters for being primitive, xenophobic bigots (and stupid to boot), all to evade any reckoning with their own responsibility ... these  institutions have spawned pervasive misery and inequality, only to spew condescending scorn at their victims when they object ..."


British lion and Union flag - Attribution via Wikimedia Commons (CC BY 2.0)
[Jonund, tracy, Stefano Brivio (buggolo), sculptor of lion: W. F. Woodlington]
London Stock Exchange benchmark FTSE100 comes 'roaring' back, hits 2016 high, and has its biggest weekly rise since 2011; up 3.78% since Brexit vote on June 23. Germany's DAX and France's CAC40 are still "in the red" post-Brexit vote:
Top to bottom: FTSE100 (UK); DAX (Germany); CAC40 (France) - source: google.com
•  Brexit Bargains Beckon: Hunting Ground For Brexit Bargains | SeekingAlpha.com"... In the history of value investing, the greats have consistently followed one rule: Never let a good crisis go to waste ... it is the opportune time to identify cheap businesses in certain industries that are unjustifiably beaten down or sold off together with peers. In order to screen for high-quality companies and seeking to capitalize on the panic surrounding Brexit ..."

•  Is Brexit the End of the EU? | MauldinEconomics.com: "The EU, Not Britain, Is the Weaker Player. The UK is Germany’s third-largest export market. It is the fifth-largest for France and Italy ... Europe cannot afford a trade war even if it feels insulted ... Britain’s banks channel global capital and are a huge source of investment for the Continent ... it is the clients who will determine the world’s banking hubs. London has been a traditional banking center preferred by foreign clients. New York—not Frankfurt—is the alternative to London. If clients had wanted to bank in Frankfurt, they would have already done so ..."

•  UPDATE: Backwards Brexit doomsayers: usatoday.com"... The alarmists have everything exactly backward. It is the EU that is under threat of dissolution, and it is the EU’s strongest member, Germany, that would be most vulnerable were trade relations to deteriorate ..."

•  Beware the Man With the World's Reserve Currency--It was the U.S. Federal Reserve, not the ECB, that issued trillions of dollars in credit and swap lines to the major European banks in 2008--Brexit, the E.U. and the "Special Relationship" | charleshughsmith.blogspot.com: "... The U.S. has a core interest in preserving British autonomy, but it also has a core interest in helping the European Union solve its many problems. The U.S. is not choosing between the U.K. and the E.U., except if it is forced to on specific issues by extremists in the E.U. Any clique in the E.U. that thinks the U.S. will sit idly by while they "punish" the U.K. had better recalibrate their core interests and the potential for blowback ..."


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