After Brexit – Is Britain already sheltering from a Europe wide storm

29th June 2016 / United Kingdom

When Briton’s decided to vote themselves out of the European Union, all hell broke loose and very quickly the morning after the night before, the realisation of what just happened started to sink in. For many in Britain, it immediately appeared that the world had caved in. Or had it?

As truepublica reported yesterday, the foreign ministers of France and Germany backed by the EU Commission and its Parliament have decided to accelerate their long-desired plans to create the European superstate described as an “ultimatum” by several EU members. The proposals ultimately mean that EU member states will lose their central banks, criminal laws and even their own armies, whilst powers seen as sovereign are transferred to the heart of the superstate in Brussels.

Then the unelected EU Commissioners who have been negotiating the worlds biggest trade deal (TTIP) with America, reportedly worth up to 40 per cent of global GDP, all behind closed doors have come up against a major problem. Mass protests have been taking place on the streets of every city in Europe, including Britain. Petitions have been presented to the European parliament with over 3 million concerned citizen signatures, only to be ignored by ‘politicians’ cozying up to lobbyists with barrow loads of cash. Corruption in the EU is rampant, now worth around 15 per cent of GDP, the vast majority the result of dodgy government deals with corporations. This was a done deal, or so everyone thought until ….

From RT – TTIP ‘doesn’t respect EU interests’: French PM Valls says ‘non’ to transatlantic treaty. France’s Prime Minister Manuel Valls has dismissed the possibility of an agreement on the US-EU transatlantic trade deal, since it goes against the interests of the European Union. “No free trade agreement should be concluded if it does not respect EU interests. Europe should be firm. France will be vigilant about this,” Valls said addressing members of the governing Socialist Party on Sunday. “I can tell you frankly, there cannot be a transatlantic treaty agreement. This agreement is not on track,” Valls added.

Without France, this a dead deal as all 27 nations have to ratify TTIP for it to work. The elected leaders of France fear a backlash by their own citizens – hence the withdrawal.

And whilst your gaze was averted the day after the Brexit vote the EU bureaucrats decided to take advantage of a perfect day to bury even more bad news. They had already worked out a plan to save their defaulting and insolvent banks and slipped in nearly half a trillion euros when everyone was looking the other way. Of course, this would have gone a long way in helping the tens of millions of struggling families in the EU, but the banks come first.

From Wolf StreetECB Blows €400bn on “Brexit Black Friday” Bank Bailouts

Remember TARP, the Troubled Asset Relief Program that the US Congress approved to bail out banks and other companies during the Financial Crisis? $700 billion were authorised, later reduced to $475 billion. The Treasury eventually dispersed $432 billion. I bring this up because the ECB bailed out the European banks with more than TARP, in just one day: on Brexit Black Friday.

In the meantime, the stock market went into a temporary death-spiral.

From Wolf Street again – Worst Day for Italian & Spanish stocks. Banks massacred.

SafeSubcribe/Instant Unsubscribe - One Email, Every Sunday Morning - So You Miss Nothing - That's It

Germany’s DAX plummeted 7%; France’s CAC 40 over 8%. But even that pales compared to what happened in Spain and Italy: the IBEX 35 plummeted 12.3% and the FTSE MIB 12.5%. It was their worst day on record. 

Amongst all this bad news the centre of the apocalypse was blamed on Britain, where strangely enough, things were not quite as bad as everyone was being told by the press. Don’t get me wrong, they were bad, just not as bad as everywhere else though.

From Zerohedge – About That Historic Collapse In Sterling: It Was “Only” The 9th Biggest Drop Going Back To 1862

Over the past several days, the financial media has been preoccupied with the fascinating – and historic – drop in sterling which as this site also noted, was the biggest in history. As it turns out, that is not the case. If one goes back in time, it appears that Friday’s sterling move was rather puny by true historical comparisons.

As Reid writes, “I’m sure you’ve read by now that Sterling’s drop on Friday (-7.64% based on GFD data) was the largest on record against the dollar. Think again. Although it’s the biggest drop since the collapse of the Bretton Woods system in the early 1970s there have been 8 bigger daily down moves since 1862.

One should not also forget that the European stock market known as the STOXX600 had already fallen around 20 per cent in the last 12 months alone, way before any hint of a ‘Brexit’.

Chart: CNBC 28th June 2016

Chart: CNBC 28th June 2016

And in amongst all the carnage across the entire European Union, it is clear that the Brits may well be in for a helta-skelta ride for the foreseeable future, but London’s FTSE 100, that is the top listed listed companies in the UK was the best performing stock market on the day of a crisis that saw Europe’s biggest financial risks emerge.

As CNBC Markets reports The French CAC closed around 8 percent lower on the day. Germany’s DAX index tanked as much as 10 percent before paring losses, closing around 6.8 percent down. Italy’s FTSE MIB and Spain’s IBEX both closed more than 12 percent lower. The pan-European STOXX 600 index closed down around 7 percent lower on the day.

Outside of Europe, the U.S. Dow Jones Industrial Average and the S&P 500 indexes traded around 2.5 percent lower at the European market close. Asian stocks also slumped, with the Japanese benchmark Nikkei 225 tumbling to close 7.9 percent lower.

Losses were led by peripheral bourses, with London’s FTSE 100 outperforming. It closed 3.2 percent lower on the day and nearly 2 percent higher on the week!



At a time when reporting the truth is critical, your support is essential in protecting it.
Find out how

The European Financial Review

European financial review Logo

The European Financial Review is the leading financial intelligence magazine read widely by financial experts and the wider business community.