Global Analysis from the European Perspective. Preparing for the world of tomorrow

Brexit: Market Sell-Off Is Irrational!

Markets tumble amid global selloff now British decide to choose for a Brexit.  ECB announced it would pledge to backstop. The economy in the UK is far from healthy but, that said, our team sees no reason for fundamental changes now the UK decides to leave the European Union. George Soros warned, “If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable.”1)George Soros warns Britain leaving could be end of EU Source The Guardian 2016-06-09 Leaving the EU is a completely different story to leaving the Eurozone. For signs of Eurozone disintegration it is better to have a close look at events in France. Now a Brexit happens there is panic and this is an opportunities to earn some easy money. Soros’ remark makes us think about the legend of Nathan Rothschild after the British won the battle of Waterloo: “But this was Nathan Rothschild. He leaned against “his” pillar. He did not invest. He sold. He dumped consols.(British government bonds) […] Consols dropped still more. “Rothschild knows,” the whisper rippled through the Change. “Waterloo is lost.” Nathan kept on selling, […] consols plummeted – until, a split second before it was too late, Nathan suddenly bought a giant parcel for a song. Moments afterwards the great news broke, to send consols soaring. We cannot guess the number of hopes and savings wiped out by this engineered panic.” The legend turned out not to be true2)The News from Waterloo, but it learns us a good lesson. Now there is a Brexit and markets are in panic, we expect Soros picks up the pieces for fire-sale prices.

References   [ + ]

1. George Soros warns Britain leaving could be end of EU Source The Guardian 2016-06-09
2. The News from Waterloo

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