CDZ What happens Monday?

[william the wie]

A 3% drop in the Dow during a monetary crisis is extremely mild as in trillions in hot money came here today and it may be pulled Monday.

 

[JoeMoma]

 

[Picaro]

I didn't check, but what was it doing in the couple of weeks running up to the vote? Some gambles lost their bets on the vote and pulled out, contributing to the drop, so it will level out; the vote will just cause a shuffling around, and does't affect the overall economy, except for the Eurodollar, if all those other countries pull out as well.

 

[Agit8r]

Regardless, the far right loonies will blame it on Obama.

 

[william the wie]

Obama is the current scapegoat in chief.

 

[william the wie]

I didn't check, but what was it doing in the couple of weeks running up to the vote? Some gambles lost their bets on the vote and pulled out, contributing to the drop, so it will level out; the vote will just cause a shuffling around, and does't affect the overall economy, except for the Eurodollar, if all those other countries pull out as well.

OK this is complicated in practice but here goes.

The USD is an unofficial world standard like the volt in electricity is an official world standard.

This has major consequences like Mexico's investment grade peso debt is hard to sell outside of Mexico but its junk grade USD debt sells easily around the world.

The appreciation of the Dollar as a consequence of Brexit has:

1) raised world debt levels markedly.

2) Disturbed relationships in all commodities

3) Has caused damage in FOREX.

the above three capital markets make the world 's stock markets look pennyante

 

[Picaro]

I didn't check, but what was it doing in the couple of weeks running up to the vote? Some gambles lost their bets on the vote and pulled out, contributing to the drop, so it will level out; the vote will just cause a shuffling around, and does't affect the overall economy, except for the Eurodollar, if all those other countries pull out as well.

OK this is complicated in practice but here goes.

The USD is an unofficial world standard like the volt in electricity is an official world standard.

This has major consequences like Mexico's investment grade peso debt is hard to sell outside of Mexico but its junk grade USD debt sells easily around the world.

The appreciation of the Dollar as a consequence of Brexit has:

1) raised world debt levels markedly.

2) Disturbed relationships in all commodities

3) Has caused damage in FOREX.

the above three capital markets make the world 's stock markets look pennyante

We've been seeing a general decline in fundamentals for a while now; many regions have been toying with negative interest rates for a while, too. All of the above is a consequence of too much money flowing to the top and not being recirculated back down again, i.e. the financial sector now cannibalizing itself. At least that's my opinion; they're sitting on massive amounts of cash, and don't reinvest it in productive enterprises, just more financial paper. I'll elaborate more on this when I get time.

 

[william the wie]

A key point to keep in mind when you elaborate is rampant functional innumeracy:

A hidden assumption of the Efficient Market Hypothesis is that stock prices such as X.1238132134... non-repeating are the norm in the market. So, when discrete math portfolios developed by AA!! and Value Line beat the Dow with 200 data point certainty in the late 70s that was ignored.

The assumption that deterministic means predictable has been disproven many times yet it persists and many beliefs such as AGW act on the assumption that the quantification of the degree of uncertainty in deterministic systems by Edward Lorenz never happened.

Fuzzy logic dealing with the uncertainty of set boundries such as spoon and ladles is another stumbling block.

 

[Toronado3800]

Man, if we could just simplify the trading markets all we would care about are if this will increase tariffs.

 

[Picaro]

A key point to keep in mind when you elaborate is rampant functional innumeracy:

A hidden assumption of the Efficient Market Hypothesis is that stock prices such as X.1238132134... non-repeating are the norm in the market. So, when discrete math portfolios developed by AA!! and Value Line beat the Dow with 200 data point certainty in the late 70s that was ignored.

The assumption that deterministic means predictable has been disproven many times yet it persists and many beliefs such as AGW act on the assumption that the quantification of the degree of uncertainty in deterministic systems by Edward Lorenz never happened.

Fuzzy logic dealing with the uncertainty of set boundries such as spoon and ladles is another stumbling block.

I don't see that the 'efficient market theory' has anything to do with real life. Warren Buffet is right about that theory, just as the massive failure of Long Term Capital Management in the 1990's made junk out the Black Scholes gibberish, which amounted to just another exercise in circular reasoning and the folly of self-validating formulas. Like somebody said, I forgot who, when it comes to Wall Street, the smarter the the experts are, the bigger the disaster is. Don't agree with Krugman on some things but his and a couple of others' records of predictions is far better than the hacks in the Fed or on Wall street have been the last couple of decades. He at least pays lip service to reality far more than the rest have, as far as economists and pros go.

 

[320 Years of History]

Well, "Monday" has come and gone now. The Pound sterling has sunk to a 31 year low against most currencies, including the dollar, yen and Euro.

What to make of that?

• Well, it's good for UK sellers who will find their goods more affordable to foreign buyers.
  • That's bad - assuming one considers paying more than one used to is bad -- for UK residents who will find themselves paying more for imported goods.
  • That's good for the overall UK economy, but the goodness will be felt only by those whose fortunes accrue from the sale of exported goods and services sold by UK companies.
• U.S. exports to the UK will cost more to UK buyers as a result of the pound's being weaker.
  • That means US sellers/producers will sell less to the UK. (As of May 2016, the US exported ~$760M to the UK.)
• The Fed is unlikely to increase interest rates due to, among other things, the added pressure resulting from the strengthening dollar against both the Pound and Euro.
  • That's good for U.S. borrowers.
  • That's bad for U.S. savers and lenders.