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June 2016

An Overview of Brexit

The Reaction of the European Bourses On June 14th, the FTSE closed at 5923.50.  On June 15th, the world’s major bourses began their run-up in anticipation that “remain” would win in the U.K. referendum.  The FTSE rose 7% from its June 14th level until June 23rd (to 6338.10), the day of the referendum.  The day after the referendum, when the “shock” of “exit” was highest, the FTSE fell 3.1% to …Read More

Recognition shock

The wave of anti-establishment, anti-globalization sentiment, evident in the U.S. primary election cycle, manifest itself bigtime in the U.K. with its vote on Thursday, June 23rd, to exit the European Union (E.U.).  Wall Street hates uncertainty; that is why it loves the status quo.  In the days leading up to this historic British decision, the markets were so confident that the vote would be to “remain” in the E.U. that …Read More

Dealing with the ‘New Normal’

In ’09 and ’10, when Mohammed El-Erian and Bill Gross both worked at PIMCO, they put forth a concept they called “the New Normal.” It postulated that the economy would grow at a much slower rate than it had in the past, and therefore market returns – both equity and fixed income – would be much lower than what we had experienced in the post-WWII era. Nice theory, many thought; …Read More