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Friday, June 24, 2016

Brexit Short Update

OThis will be a short post. What just happened is pretty groundbreaking - political and economic relations between the UK and EU will be drastically changed in the time to come. I anticipate considerable short-term volatility and turmoil in global markets, centered in the UK.

I am a contrarian. Depending on how bad things really get, and to what extent the market will take this news negatively, but at the very least I know they will, I may consider this a buying opportunity. It can already be evidenced by the 9% drop in GBP/USD in the past 6 hours. Nikkei also dropped 7%.  I may be looking to initiate a position in a FTSE-tracking ETF, or possibly scope out some overly-battered companies in the future. Positions haven't changed yet.

People, money, and products from UK corporations will now have a harder time moving around. Money flow through UK banks are going to be no exception, and that is especially significant given that currently 63% of UK exports are attributed to EU membership. Immigration policies will be rewritten. Too many things are now planned to change to feasibly list.

It is important to stay level-headed. Times of turmoil will end up being opportunities in retrospect. I am actually very excited and intrigued; this is a significant event, and the bounds of its repercussions are yet to be realized. But who knows? Maybe it won't really even be as big of a deal as many would think.

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