Brexit = Fun times for observers at least
First and foremost I don't live in the UK or am even a citizen of any EU member country. I have not researched the topic and as such I don't pretend to support either side.
That being said, Twitter is fun. Watching the "Remainers" say "I told you so" about the stock markets in particular makes me laugh. You do realize that what the stock markets do today has absolutely nothing to do with the long term ramifications of this? This is what stock markets do. Stock markets hate uncertainty. This is new territory. Anyone who thought a vote to leave wouldn't have, at the very least, a short term negative impact on the stock market has clearly never paid any amount of attention to the stock markets.
Go ahead, try it for a week or two. It probably won't take longer than that to see another such move (though likely on a smaller scale). Watch oil prices. The second there are fears of a natural disaster in an oil rich country, or domestic strife, stock will drop. Even if the threat never materializes. Watch the tech industry, when there is a rumor that company X will buy company Y, you'll see company Y's stock skyrocket. Even if the acquisition never happens.
This isn't hindsight being 20/20. I could have told you this with absolute certainty last week. Last year. A decade ago. Let me just say, EVEN if it was GLOBALLY accepted that staying in the EU was a bad idea, a vote to leave it would have a larger negative short term impact on the markets than a vote to stay (though it is also possible that both results would lead to short term instability). Even if investors think staying with the EU is a bad idea, they at least have an idea based on past performance of just how bad it will be. A vote to leave marks an entrance into the unknown. No one knows what the actual impact will be. So investors run scared.
Also, for the remainers... you're STILL ACTUALLY PART OF THE EU. As many have pointed out, your parliament still needs to actually formally start the process. At which point it will still take at least 2 years for it take effect. Feet will drag for a while, perhaps years. Perhaps another referendum will undo this before then. In other words, financially, we're actually years away from even the first wave of tangible, direct impacts from this referendum.
This is important, because it means today's stock market changes cannot actually be a result of actual effects from the UK leaving the EU.... because you HAVEN'T ACTUALLY LEFT IT YET. It is the result of people not knowing what the effects will be. All it proves is what we already know about stock markets.
I'm not saying the remainers won't be proven right in the longer term or even wrong in the long term. The size of the shock to the stock market is really a testament to how vast the lack of knowledge on the topic is. Consider it this way, in any disaster there are always winners and losers. And in something this large, there WILL be winners in the UK. In fact, probably quite a few. One of the impacts of this will likely be higher cost for goods from the EU, which means some local manufacturers and businesses may make off like bandits as their goods suddenly become that much more affordable than competing ones from EU members. It will also devastate others.
If we knew the net fallout, instead of just flat out pulling investments out of the UK, people would reinvest elsewhere in the UK. The shock would be much smaller. This is a knee-jerk reaction. Nothing more.
So when you see people holding this up as proof that they were right, the only valid response is to laugh.
That being said, Twitter is fun. Watching the "Remainers" say "I told you so" about the stock markets in particular makes me laugh. You do realize that what the stock markets do today has absolutely nothing to do with the long term ramifications of this? This is what stock markets do. Stock markets hate uncertainty. This is new territory. Anyone who thought a vote to leave wouldn't have, at the very least, a short term negative impact on the stock market has clearly never paid any amount of attention to the stock markets.
Go ahead, try it for a week or two. It probably won't take longer than that to see another such move (though likely on a smaller scale). Watch oil prices. The second there are fears of a natural disaster in an oil rich country, or domestic strife, stock will drop. Even if the threat never materializes. Watch the tech industry, when there is a rumor that company X will buy company Y, you'll see company Y's stock skyrocket. Even if the acquisition never happens.
This isn't hindsight being 20/20. I could have told you this with absolute certainty last week. Last year. A decade ago. Let me just say, EVEN if it was GLOBALLY accepted that staying in the EU was a bad idea, a vote to leave it would have a larger negative short term impact on the markets than a vote to stay (though it is also possible that both results would lead to short term instability). Even if investors think staying with the EU is a bad idea, they at least have an idea based on past performance of just how bad it will be. A vote to leave marks an entrance into the unknown. No one knows what the actual impact will be. So investors run scared.
Also, for the remainers... you're STILL ACTUALLY PART OF THE EU. As many have pointed out, your parliament still needs to actually formally start the process. At which point it will still take at least 2 years for it take effect. Feet will drag for a while, perhaps years. Perhaps another referendum will undo this before then. In other words, financially, we're actually years away from even the first wave of tangible, direct impacts from this referendum.
This is important, because it means today's stock market changes cannot actually be a result of actual effects from the UK leaving the EU.... because you HAVEN'T ACTUALLY LEFT IT YET. It is the result of people not knowing what the effects will be. All it proves is what we already know about stock markets.
I'm not saying the remainers won't be proven right in the longer term or even wrong in the long term. The size of the shock to the stock market is really a testament to how vast the lack of knowledge on the topic is. Consider it this way, in any disaster there are always winners and losers. And in something this large, there WILL be winners in the UK. In fact, probably quite a few. One of the impacts of this will likely be higher cost for goods from the EU, which means some local manufacturers and businesses may make off like bandits as their goods suddenly become that much more affordable than competing ones from EU members. It will also devastate others.
If we knew the net fallout, instead of just flat out pulling investments out of the UK, people would reinvest elsewhere in the UK. The shock would be much smaller. This is a knee-jerk reaction. Nothing more.
So when you see people holding this up as proof that they were right, the only valid response is to laugh.
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