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Brexit Approval Sparks Both Celebration And Fears Of Global Economic Meltdown
Voter approval of the Brexit – Britain’s exit from the European Union – led to celebrations for supporters and fear-mongering over the possibility of a global economic meltdown.
Shortly after a vote of 51.9 percent in favor of Brexit and 48.1 percent against it, world financial markets reportedly went into a tailspin. The U.S. economy could also suffer, The Wall Street Journal reported.
Economic instability sparked by the vote could signal the start of another crisis similar to the one in 2008, according to numerous reports.
“The vote instantly creates the biggest global financial shock since the 2008 economic crisis, this time with interest rates around the world already at or near zero, stripping policymakers of the means to fight it,” Reuters news reported.
But those in favor of the Brexit called it a victory for people who are sick of EU’s unbridled immigration and other globalist agendas. For supporters, the Brexit’s approval was a statement by people who are fed up with the lies and rip-offs perpetrated by big government, big banking, and big business.
Following the vote, Nigel Farage, leader of the UK Independence Party, said the EU is a “doomed project.”
“Dare to dream that the dawn is breaking on an independent United Kingdom,” he said.
European, Asian stocks and S&P futures plummet, as U.K. votes to leave European Union membership. FX carry trades everywhere go haywire, with the Dollar and Yen spiking while the Cable overnight plunged to 30 year lows and at last check was trading just around 1.37, down 1,300 pips from yesterday's highs. A modest rebound was experienced when first the Bank of England and shortly after all other central banks promised to pump virtually unlimited liquidity into the financial system. Ironically, all of this takes place a day after Fed’s stress tests showing all 33 banks exceed minimum requirements - we may find out just how "unstressed" they are as soon as today.
Although it was his responsibility to remain in No 10 to "steady the ship" - including by attending a meeting of EU leaders next week - he announced he would step down in the autumn as he was not the right "captain to steer the country to its next destination".
Potash Price Surge Could Lead To Higher Food Costs For Billions
We are on the precipice of a food fight among 7 billion people, and potash will be right at the center of it. If you can add 200,000 people every day to the global population and account for a significant loss of farmland at the same time, you can begin to understand the dire food situation facing the planet. This is why potash is so important: It’s the fundamental element that everyone takes for granted, despite the fact that a projected 7.7 billion lives will depend upon it by 2020. No commodity is more fundamental than potash—and there is a lot of pressure riding on an element that many people aren’t even familiar with. Of the key commodities taken for granted, potash is on the top of the list. The challenge for farmers—and for the world—is to increase crop yields on less land, which is being lost to climate […]
The 33 Biggest Banks Beat the Fed's Stress-Test Minimums for 2nd Straight Year
For the second straight year, the biggest U.S. banks all had sufficient capital to withstand a severe financial downturn, according to results of the Federal Reserve's annual stress tests.
It was a close call for some, including Morgan Stanley (MS) , BMO Financial (BMO) , Huntington Bancshares (HBAN) and KeyCorp (KEY) . The tests are the first phase of the review and will be followed by scrutiny of how the companies' plans for dividends and stock buybacks would affect their balance sheets.
The Fed's annual tests are designed to ensure banks with more than $50 billion in assets have sufficient buffers to survive a crisis similar to the 2008 economic meltdown. This year's review used economic modeling to predict how the companies would fare in three different scenarios, the worst of which was a hypothetical "deep and prolonged" recession with peak unemployment of 10% in the middle of 2017 and stocks losing half their value by the end of 2016.
Banks considered this year's test one of the harshest in recent years, partly because the hypothetical increase in the unemployment rate -- more than doubling the current level -- is much greater than in previous years.
In the 2015 test, the unemployment rate only increased by 4 percentage points through the middle of 2016. This year's review also raised the prospect of negative interest rates, which may be tougher on banks without major trading operations, for the first time.
The mood was echoed on stock markets, where the FTSE 100 index hit a two-month high. The index of leading shares was up 1.5% at 6357 in mid-morning trading, buoyed by mining shares as copper prices rose. There were also gains for other bourses around Europe with Germany and France’s main share indices up almost 2%.
"We're going to be there," Mabus said of the Black Sea. "We're going to deter. That's the main reason we're there -- to deter potential aggression." Mabus spoke days after Russia criticized NATO discussions about a creating a permanent force in the Black Sea. The NATO summit is set to tale place as relations between Russia and the alliance are severely strained over Moscow's role in the Ukraine crisis and in Syria. While Russia says it poses no threat to alliance, NATO is considering what to do to counter what it sees as growing Russian aggression.
With 5 percent of the world’s population and 25 percent of the world’s prison population, the United States has the largest incarcerated population in the world. No other society in history has imprisoned more of its own citizens. There are half a million more prisoners in the U.S. than in China, which has five times our population. Approximately 1 in 100 adults in America were incarcerated in 2014. Out of an adult population of 245 million that year, there were 2.4 million people in prison, jail or some form of detention center.
Shell’s Ambitious Plan To Topple Exxon
Shell Rig Ben Van Beurden, Chief Executive Officer of Royal Dutch Shell has laid out an ambitious plan to overtake ExxonMobil as the number one oil company in the world. Prior to the 1990s, Shell was the leader in total shareholder returns, however, its rivals went on a deal-making spree to gain the lead, while Shell shied away from making any acquisitions. Now, Mr. Beurden believes that Shell will be able to regain its lost glory post the acquisition of the BG group. “I am determined to get us to that number one place,” Mr. Beurden said after outlining the company’s long-term strategy in London. “I want to create a world class investment case for Shell and our shareholders,” reports Bloomberg . Shell, with a market capitalization of $216.6 billion , has a lot of catching up to do if it wants to surpass Exxon’s market capitalization of $379.5 […]
Soros: Brexit Will Spark UK Currency Crisis, Economic Chaos
George Soros, the billionaire who earned fame by betting against the pound in 1992, said that a British vote on Thursday to leave the European Union would trigger a bigger and more disruptive sterling devaluation than the fall on Black Wednesday.
Soros used Quantum Fund in 1992 to bet successfully that sterling was overvalued against the Deutsche Mark, forcing then-Prime Minister John Major to pull the pound out of the European Exchange Rate Mechanism (ERM).
Soros, in an opinion piece in the Guardian newspaper, said that in the event of a British exit, or Brexit, the pound would fall by at least 15 percent, and possibly more than 20 percent, to below $1.15 from its current level of around $1.46.
The BOJ cut its inflation forecasts in a quarterly review of its projections, and once again pushed back by six months the timing for hitting its 2 percent price target, saying it may not happen until March 2018 at the latest.
It said the number of bond defaults in the year to date period has already exceeded the total for all of 2015, with more than 20 bonds in default after more than 10 issuers missed their interest or principal payments.
Venezuela is “highly unlikely” to have enough hard currency to fully make its debt payments this year, although a default isn’t inevitable, according to a report from Moody’s Investors Service.
Oil Markets Are Balanced But Bracing For Brexit
This week’s key data from the oil and gas industry shows that fears of a Brexit continue to weigh on oil, as the dollar strengthens due to market uncertainty. We also see the rig count continue to climb, although still at a relatively slow rate. (Click to enlarge) (Click to enlarge) Chart of the Week • The Bakken in North Dakota saw natural gas production explode over the past decade, and because of inadequate pipeline and processing infrastructure, natural gas flaring also surged . • But since the collapse of oil prices two years ago, flaring has fallen substantially, both in percentage terms and on an absolute basis. • As of March 2016, the industry flared 10 percent of the natural gas produced in the U.S., down by about one third from early 2014 levels. Much of that has to do with the sharp decline in drilling. • But […]