It is critical to understand that BREXIT is not the cause of present angst, but only another symptom of the bubble finance which has been plaguing and increasingly destabilizing the global economy over the past 20 years. The third major asset market implosion (after 2000 and 2007) is inevitable and necessary. It is wise for individuals to make every reasonable effort to protect their financial health from the splatter. We are now in year 17 of the secular bear that began in 2000 (historically secular bears have lasted 17-20 years before ending in the cheapest asset valuations in a generation). So we are very likely getting close to the end of this one. Preservation of savings and liquidity is the number one goal today. This is a marathon not a sprint. Only those who have mentally trained for the hills will have the staying power to prevail and cross the finish line in good health.
Great big picture article from David Stockman via Seeking Alpha this morning. Read: Here we go again–August 2007 redux for more insight:
Nearly everywhere on the planet the giant financial bubbles created by the central banks during the last two decades are fracturing. The latest examples are the crashing bank stocks in Italy and elsewhere in Europe and the sudden trading suspensions by three UK commercial property funds.
If this is beginning to sound like August 2007 that’s because it is. And the denials from the casino operators are coming in just as thick and fast.
Back then, the perma-bulls were out in full force peddling what can be called the “one-off” bromide. That is, evidence of a brewing storm was spun as just a few isolated mistakes that had no bearing on the broad market trends because the “goldilocks” economy was purportedly rock solid.
Thus, the unexpected collapse of Countrywide Financial was blamed on the empire building excesses of the Orange Man (Angelo Mozillo) and the collapse of the Bear Stearns mortgage funds was purportedly owing to a lapse in supervision.