Getting Caught Up
Global Markets 9:30 AM ET
- Gold 1355 +7.8%
- Gold in GBP +17.7%
- GBP 1.33 -10.5%
- EU 1.09 -4.1%
- FTSE 6049 -3.35%
- SPU 2030 -3.6%
- DOW -500 pts
- WTI OIL 4827 -5.2%
What Happened?
- The UK voted to leave the EU 52% to 48%
- The British pound dropped to a low of 1.33, down 11%. Levels not seen since 1985
- Oil fell to a low of down 6%
- Gold Rallied 8%
- Stocks were slammed with the FTSE off 8% and the DAX down 6%
Comment:
Pundits will call this classic risk off behavior and a flight to safety. We feel it is much deeper than that. It is the reality that easy money for too long incentivizes poor judgment in investment decisions. And that results in inefficient allocations of capital. Money that should be going towards rebuilding economies gets parked in the “stock of the day”. We see this as the beginning of the end of investor confidence in stocks. The damage done too investor faith will take years to heal. And from this we are gravely concerned that FIAT currency will follow.
Like the faith lost in our politicians when Richard Nixon was caught in the 1970s, this will be the straw that broke the common mans back. Faith in Stocks as a solid investment is now going to wane as people seek to get their money back.
As the man said: “ I am more concerned with the return of my money than the return on my money.”
-Soren K.
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