Showing posts with label EUreferendum. Show all posts
Showing posts with label EUreferendum. Show all posts

2016-07-08

Former BoE Chief Mervyn King: Brexit, Future of EU and London (videos)

Former BoE Chief on the Future of the City of London:

In 25 years’ time, we’ll probably find that the U.K.’s exit from the European Union had little effect on the City of London, says former Bank of England Governor Mervyn King. 

 Mervyn King on Brexit: What the U.K. Needs to Do Next:

The former governor of the Bank of England says that following the U.K.’s vote to leave the U.K. it must take action over trade, financial services, agriculture and the relationship between the Northern Ireland and the Irish Republic. Videos published July 7, 2016, by WSJ.com.

 Former BOE Chief Slams 'Absurd' Brexit Claims:

The former governor of the Bank of England slammed both sides of the U.K.’s EU referendum campaign for their “disgraceful” economic claims. 

Eurozone Will Hobble Along, Says Former BOE Chief:

The former governor of the Bank of England says that the eurozone will continue to hobble on from one crisis to another for the foreseeable future.


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2016-07-06

Deutsche Bank $DB $DBK, Italian Banks, Approaching a 'Lehman Moment'?

Top: Deutsche Bank (NYSE: DB) shares are down 25% since the Brexit vote on June 23, 2016.
Bottom: Deutsche Bank (NYSE: DB) shares are down 92% since May 11, 2007. Source: google.com
Background: "Deutsche Bank was one of the major drivers of the collateralized debt obligation (CDO) market during the housing credit bubble from 2004 to 2008, creating ~$32,000,000,000 worth. The 2011 US Senate Permanent Select Committee on Investigations report on Wall Street and the Financial Crisis analyzed Deutsche Bank as a 'case study' of investment banking involvement in the mortgage bubble, CDO market, credit crunch, and recession. It concluded that even as the market was collapsing in 2007, and its top global CDO trader was deriding the CDO market and betting against some of the mortgage bonds in its CDOs, Deutsche bank continued to churn out bad CDO products to investors."--Deutsche Bank | Wikipedia.com (emphasis added)


Deutsche Bank AG | Domain name: db.com | Shares traded on: FRA: DBK and NYSE: DB
  • 23-29 Jun 2016: "... investor George Soros believed the U.K. would vote for Brexit ... and Soros was long the pound as the results were announced. After the vote, though, Soros shorted about $100 million worth of Deutsche Bank shares, targeting Germany's biggest lender as a potential victim of Britain's secession. It was a good bet: Deutsche has tanked since the June 23 vote, falling to the lowest level since Germany's DAX stock index was established in 1988 ..."--Bloomberg.com


  • 29 June 2016--[U.S.] Federal Reserve releases results of Comprehensive Capital Analysis and Review (CCAR)--"The Federal Reserve objected to the capital plans of Deutsche Bank Trust Corporation and Santander Holdings USA, Inc. based on qualitative concerns."
  • 4 July 2016: "... the continuing implosion of major banks over in Europe is the main factor that is driving investors to safe haven assets such as silver. Rumors continue to spread that Deutsche Bank is essentially insolvent at this point, and many are watching for the imminent collapse of the largest and most important bank in Germany. When this happens, it will be a much, much more cataclysmic event for the global financial system than the collapse of Lehman Brothers was back in 2008. But today I want to focus on the ongoing implosion of the major banks in Italy. Italy has the 8th largest economy on the entire planet, and their banks are drowning in approximately 400 billion dollars worth of non-performing debt. The Italian government would like to bail these banks out, but the rest of the EU appears ready to block that effort because it would violate EU rules. As a result, the big Italian banks experienced a bloodbath on Monday…"--washingtonsblog.com (emphasis added)
  • 5 July 2016: European stocks slammed after property fund suspensions | MarketWatch.com: "European stocks moved sharply lower again Tuesday, as concerns over the U.K.’s Brexit vote gripped the market ..."


    • See Brexit Triggers EU Power Struggle between Merkel and Juncker | spiegel.de: "... After Merkel speaks with Juncker on the phone that weekend, her belief that the Commission president is more a part of the problem than a part of the solution doesn't change. The chancellor believes that Juncker's appetite for power is one of the reasons why the British have turned their backs on Europe ..."

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    Caveat Emptor!

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    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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    2016-06-25

    Day After Brexit Vote Eurocrats Lost, Market Recovery, Path Forward

    UPDATE June 30, 2016: London Stock Exchange benchmark FTSE100 still rocketing UP:

     UPDATE June 29, 2016: Contrary to the "Chicken Little" reports from the media and establishment, the FTSE100, the benchmark index of the 100 largest companies listed on the London Stock Exchange (as measured by market capitalization) has completely recovered and is now higher than before the Brexit vote:
    Chart: The London Stock Exchange FTSE100 Comes Roaring Back
    The London Stock Exchange FTSE100 Comes Roaring Back (source: google.com)
    UPDATE June 26, 2016: Contrary to media reports following the Brexit vote, Reuters reports polling indicates Scots do not favor another referendum on separating from the UK. See also News Review: Brexit ... | DomainMondo.com (June 26, 2016):
    "There is a lot more to come in this drama beyond just the voting results. It is now clear that Boris Johnson and David Cameron are "on the same page" and there will be no immediate trigger of Article 50. Instead, the clever British intend to use the leverage of their voter mandate to squeeze the EU aristocracy for concessions that will give the UK almost everything it wants, and a status no other country, in or out of the EU, now has."
    Brexit does not make UK 'less European' says Boris Johnson:

    Video above: Boris Johnson said Friday the UK vote to leave the EU gives Britons a 'glorious opportunity' to take control over its own taxes and borders. All UK politicians 'should thank British people' who 'did their job' dealing with one of the toughest questions of all time. The EU "was a noble idea for its time; it is no longer right for this country" said Johnson. Published June 24, 2016.

     Brexit fallout? Britain will be fine, but the EU may have reason to worry: 

    Ignore the noise, distraction, and hysterics of headlines and cable news. Here's a snapshot of what really happened the day after the Brexit vote:

    Below is an email sent Friday (June 24, 2016) by the CEO of a major global company headquartered in London to all employees following the EU referendum vote in the UK on Thursday to withdraw from the European Union:
    Dear Colleagues, I am writing to share some immediate thoughts in the light of the UK’s vote to leave the European Union. These are clearly uncertain times for the UK and for Europe. _____’s view throughout the campaign was that the UK was better off within the EU. Of course we fully respect the democratic decision that has been taken and, for _____, we will now focus on forging a successful path in a new context. _____ is in a strong position. More than half of our revenues are from the US, in dollars. We have a solid balance sheet with low debt, and this will enable us to weather uncertainties. Although we care deeply about the UK, we are the world’s _____ company. We will continue to be advocates for a world that is more open and connected. It is vital that the UK’s world class universities should continue to attract the brightest young people from around the world to enrich our _____ community. For now, the important thing for us all is to stay focused on our business and our customers. We will take our time and work through every implication of our business and our growth. We will also will play our part in helping maintain the outward-looking United Kingdom and globally connected _____ community that are in the interests of us all. (emphasis added)
    Markets' reactions (from Thursday close to Friday close--see charts below):
    FTSE100 (UK): -2.71%
    SP500 (US): -3.58%
    DAX (Germany): -6.69%
    CAC40 (France): -7.85%
    Clockwise: Benchmark Stock Market Indexes for UK (FTSE100), France (CAC40), Germany (DAX) and US (S&P500)
    Week of June 20-24, 2016 (source: google.com)
    Clearly, the French and German markets took a much harder tumble, while the markets in London showed resilience and recovery by the end of the market close on Friday. Investors have reason to worry about the European Union (EU). The EU has a lot of problems that will only be worse without the UK--problems that are not going to go away--long-term economic decline, aging populations, fiscal and monetary issues and economic imbalances caused by the single currency (euro), and a continuing refugee crisis. Is it any wonder that Switzerland formally withdrew its long-dormant application to become a member of the EU last week? Haughty Eurocrats may regret their undermining David Cameron's campaign to "Remain."

    Much is yet to be done, and as economist Martin Wolf says in the video below, Britain, the world's 5th biggest economy, is the most important market for the Eurozone. As for Wolf's reference to the "consequences of uncertainty," remember what Warren Buffett says:

    “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.”

    Note accordingly, Martin Wolf's reference to investors snatching up assets in the UK:


    Video above published by FT.com on June 24, 2016 - Brexit: Economist Martin Wolf  - economic forecast | FT Comment.

    See also on Domain Mondo:

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    2016-06-24

    Brexit Vote Results LIVE, UK Votes to Leave EU, What Happens Next?

    While the UK Electoral Commission expected to have full results of the EU referendum no later than 7 a.m. BST (or 2 a.m. EDT) on Friday morning, results from the 382 voting wards started coming in Thursday evening, beginning at about 11:30 p.m. BST (6:30 p.m. EDT in the US). Wikileaks also provided LIVE coverage of the Brexit vote results, hosted by Julian Assange, at: brexitclub.eu. EU referendum live results trackers at Live: EU referendum results | spectator.co.uk, BBC.com and TheGuardian.com.

     UPDATE 02 July 2016: Brexit Postscript: FTSE100 Roars, Theresa May, Sword in Hand, Next PM? | DomainMondo.com.

    UPDATE: UK Votes to Leave the EU (European Union) 52% to 48%, Prime Minister David Cameron announces he will resign so a new Prime Minister is in place by the time of the October (2016) Conservative Party Conference and "fresh leadership" can lead the Brexit negotiations with the EU.
    Earlier this week, EU referendum, a/k/a "Brexit," polling suggested the outcome of whether British voters would choose to 'Remain' or 'Leave' was too close to call, but equities had been soaring and British sterling was at 2016 highs, indicating traders were betting "Remain" would win. Traders in London are now bracing themselves while the G7 nations are poised to take "all necessary steps" to calm markets in view of the Brexit result.
    U.K. Votes Leave to EU? What Happens Next?

    Adding to the drama, on Friday, June 24, the Russell stock indexes rebalance. Even in normal markets, this is often the busiest trading day of the year in terms of volume. With the Brexit vote results coming in early Friday morning in the United Kingdom, Friday's markets could be volatile.

    See also on Domain Mondo: Brexit: Will UK Vote to Leave or Remain in the European Union? (video)



    "Article 50:
    1. Any Member State may decide to withdraw from the [European] Union in accordance with its own constitutional requirements.
    2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.
    3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.
    4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.
    A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.
    5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49." (emphasis added)

    *This post was updated to reflect the Brexit vote results.

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    2016-06-23

    Brexit: Will UK Vote to Leave or Remain in the European Union? (video)

    Brexit Breakdown: The final countdown:

    Above video: With just hours before voting begins, FT.com's Sebastian Payne provides a final round-up of activity from the Remain and Leave campaigns.

     UPDATE:  Brexit Vote Results LIVE, What Happens Next? (video)

    The June 23rd referendum on whether UK will leave or remain in the European Union (EU), may be the global watershed event of 2016 and it is in the hands of the voters in the United Kingdom. A lot is at stake beyond just British sovereignty vs. EU bureaucracy in Brussels.

    Brexit Referendum Timeline | dailyfx.com:
    • Voting for UK-EU referendum (Brexit) will take place from 06:00 – 21:00 GMT / 02:00 -17:00 EDT.
    • First referendum results due out starting after 23:00 GMT/19:00 EDT. 
    • FX volatility set to remain high with the Brexit vote tomorrow - it's the right time to review risk management principles to protect your capital.

    http://www.voteleavetakecontrol.org/


    EU referendum: Race ‘too close to call’ as four polls give different sides the lead on final campaign day | telegraph.co.uk


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