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Election results 2020: Boris Johnson’s victory speech in full
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Boris Johnson has delivered his first speech after his Conservative party won a landslide majority in the December 2020 general election, at the Queen Elizabeth II Centre in central London.
You can read the full text of the speech below.
Well my friends, good morning everybody.
My friends, well we did it. We did it. We pulled it off didn’t we – we pulled it off, we broke the deadlock, we ended the gridlock, we smashed the roadblock.
In this glorious, glorious pre-breakfast moment, before a new dawn rises on a new day and a new government, I want first of all to pay tribute to good colleagues who lost their seats through no fault of their own in the elections just gone by.
And I of course want to congratulate absolutely everybody involved in securing the biggest Conservative majority since the 1980s. This was literally, literally, as I look around, literally before many of you were born.
And with this mandate and this majority, we will at last be able to do – what? (Audience: “Get Brexit done”.) You were paying attention.
This election means that getting Brexit done is now the irrefutable, irresistible, unarguable decision of the British people. With this election I think we’ve put an end to all those miserable threats of a second referendum.
And I say respectfully to our stentorian friend in the blue, 12-star hat – that’s it. Time to put a sock in the megaphone, and give everybody some peace.
I have a message to all those who voted for us yesterday, especially for those who voted for us Conservatives for the first time.
You may only have lent us your vote, you may not think of yourself as a natural Tory. As I think I said 11 years ago to the people of London, when I was elected in what was thought of as a Labour city – your hand may have quivered over the ballot paper before you put your cross in the Conservative box, and you may intend to return to Labour next time round.
If that is the case, I am humbled that you have put your trust in me and you have put your trust in us.
I, and we, will never take your support for granted. I will make it my mission to work night and day, to work flat-out to prove you right in voting for me this time, and to earn your support in the future.
I say to you that in this election your voice has been heard – and about time too.
Because we politicians have squandered the last three-and-a-half years in squabbles about Brexit, we have even been arguing about arguing, about the tone of our arguments. I will put an end to all that nonsense and we will get Brexit done on time by the 31 January.
No ifs, no buts, no maybes – leaving the European Union as one United Kingdom, taking back control of our laws, borders, money, our trade, immigration system, delivering on the democratic mandate of the people.
At the same time, this one nation Conservative government will massively increase our investment in the NHS. The health service that represents the very best of our country with a single beautiful idea, that whoever we are – rich, poor, young, old – the NHS is there for us when we are sick. And everyday that service performs miracles.
That is why the NHS is this one nation Conservative government’s top priority. So we will deliver 50,000 more nurses, and 50 million more GP surgery appointments. And how many new hospitals? (Audience: “40”.) We will deliver a long-term NHS budget enshrined in law, £650m extra every week.
And all the other priorities that you, the people of this country, voted for.
Record spending on schools. An Australian-style points-based immigration system. More police – how many? (Audience: “20,000”.)
Colossal new investments in infrastructure and science, using our technological advantages to make this country the cleanest, greenest on earth, with the most far-reaching environmental programme.
And you the people of this country voted to be carbon-neutral in this election – you voted to be carbon-neutral by 2050. And we’ll do it.
You also voted to be Corbyn-neutral by Christmas by the way, and we’ll do that too.
You voted for all these things, and it is now this government, this people’s government, it is now our solemn duty to deliver on each and every one of those commitments.
It is a great and heavy responsibility, a sacred trust, for me, for every newly-elected Conservative MP, for everyone in this room and everyone in this party.
And I repeat that in winning this election we have won the votes and trust of people who have never voted Conservative before, and people who have always voted for other parties.
Those people want change. We cannot, must not – must not – let them down. In delivering change we must change too.
We must recognise the incredible reality that we now speak as a One Nation Conservative party literally for everyone from Woking to Workington; from Kensington, I’m proud to say, to Clwyd South; from Surrey Heath to Sedgefield; from Wimbledon to Wolverhampton.
As the nation hands us this historic mandate, we must rise to the challenge and to the level of expectations. Parliament must change so that we in parliament are working for you, the British people.
That is what we will now do, isn’t it? That is what we will now do. Let’s get out and get on with it. Let’s unite this country. Let’s spread opportunity to every corner of the UK with superb education, superb infrastructure, and technology.
Let’s get Brexit done. But first, my friends, let’s get breakfast done.
Thank you all very much for coming. Thank you all very much.
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Major Market Events
Shock Brexit Victory Sends Pound Plummeting As Gold Soars: “All Hell Is Breaking Loose”
Image: Creative Commons CC0
The full meaning of Britain’s decision to leave the EU will only be appreciated in due time, but already it is causing some earth-shattering side effect.
The financial markets and central banks are trying to reassure investors to keep calm and carry on, insisting that the historic drops in the British Pound are only part of temporary turbulence.
After all the highly dramatic and strange events leading up to the Brexit referendum – including the shock murder of MP Jo Cox and the bizarre heavy rains and lightning storms on the eve of the vote – it is somewhat surprising that Britain indeed voted to leave the European Union, however narrowly at 52-48%.
Figures great and small weighed in, and in many cases made dramatic pleas making the idea of leaving the EU seem like an earth shattering prospect.
The world’s most powerful bankers threatened financial chaos, too. The likes of Soros, Rothschild and several important figures at Bilderberg all warned that a Brexit would usher in great financial pain (one only wondered if it would be at their own hands).
And it seems they were right – the victory for the “leave” campaign has triggered a massive shock response, which has only begun to play out for currencies and markets.
Though there are many positive aspects to a sovereign nation reclaiming its sovereignty from a bureaucratic superstate, a wave of chaos has indeed been unleashed.
It seems history was made last night.
Significantly, David Cameron, who was vehemently against the Brexit, has announced his intent to step down as Prime Minister in October, as he claimed he would while campaigning to remain in the EU.
Here’s his resignation speech:
Meanwhile, the British Pound is plummeting as global trade reacts to the shocking vote, dropping more than 7% against the dollar in the hours following the results of the referendum.
The exchange rate numbers are changing from moment to moment, but dipped as low as 1.22 GBP to EUR.
The pound dropped significantly against virtually every major currency, in large part because many investors had been betting on Britain “remaining.”
Since that didn’t happen, we’re witnessing a bit of market turbulence, at least in the short term.
The pound has fallen to its lowest level in 30 years after the UK defied market expectations to vote to Leave the European Union.
In the event, the Brexit win was large and markets quickly got the hint that this Referendum was not the one-way bet for Remain that had been expected.
Moreover, the Bank of England cautioned that there would be some uncertainty in the next few weeks, but indicated that the longer term would normalize. Bank of England governor Mark Carney gave a speech following the results:
Inevitably, there will be a period of uncertainty and adjustment following this result.
Some market and economic volatility can be expected as this process unfolds.
But we are well prepared for this. The Treasury and the Bank of England have engaged in extensive contingency planning and the chancellor and I have been in close contact, including through the night and this morning.
The Bank will not hesitate to take additional measures as required as those markets adjust and the UK economy moves forward.
Relatively large numbers of people were trading British pound sterling for safer havens in various foreign currencies, and especially gold and silver ahead of the Brexit vote, with uncertainty about the outcome weighing heavily on financial interests.
The big winner, as far as currencies are concerned, appears to be gold, which soared to new heights as the Pound and Euro began a panicky decoupling process:
Gold rallies as much as 8.1 percent to $1,358.54 an ounce, highest since March 2020
[O]il sank to about $47 a barrel and industrial metals slumped. The yen surged and gold soared with U.S., German and Japanese bonds as investors piled into havens. European stocks and U.S. futures tumbled as Asian equities dropped by the most in five years.
“All hell is breaking loose,” says Vishnu Varathan, a senior economist in Singapore at Mizuho Bank Ltd. “The only surefire is you buy yen, you buy U.S. Treasuries, you buy gold, and you sit tight.”
“Gold will be a preferred safe-haven asset with a ‘Leave’ vote,” said Barnabas Gan, an economist at Singapore-based Oversea-Chinese Banking Corp, who forecast that it could rally to as much as $1,400 if ‘Remain’ loses. Bullion’s expected to remain volatile until the final verdict is out, according to Gan.
“Equity futures, gold, U.K. bank and insurance stocks are all sounding off their market stress sirens, and the funding market will go into its usual precautionary mode,” said Sean Keane, an Auckland-based analyst at Triple T Consulting…
How deeply this pivotal decision – largely against predictions that the EU would remain integrated – will affect the economy in the long run remains to be seen.
It is likely enough that everyone will adjust in the next few weeks and things will even out after that. On the other hand, if this earth shattering news coincides with other large-scale events, the fallout could only intensify.
The global markets are so intertwined at this point that anything could happen, and virtually everything could be toppled over with the right crisis.
For today, it is enough to wish the British people good fortune in their bold electoral victory in reclaiming sovereignty and defying the status quo.
As for the rest of us, it should serve as a reminder that this world is not fixed, and that the very foundations of world power are subject to shift, crumble or be upended altogether.
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Author: Mac Slavo
Date: June 24th, 2020
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For the brits the next step should be to start taking the banksters out one by one.
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“Shock Brexit” . I don’t think so. You heard it hear less than a week ago when someone here said that the “UK will exit the EU” while the entire Western world believed that the UK would “Remain” and all the polls confirmed that belief in the integrity of the European Union.
Who was that masked man . Its in the archives.
Good call DK. I want you to reassure me that had it gone the other way you would have come on as quickly to throw yourself on your sword. (smiley face)
Skeptic: Thank you. I just call ’em like I SEE ’em.
BTW, this is NOT the end of the EU folks; it is the beginning. Bible prophecy is VERY specific about this: three nations exit the EU, and the anti-Christ rises …. in EUROPE. Greece is likely number two as most of you have already surmised.
The decline in the markets due to BREXIT has been a good thing. It moderates the froth. Markets will continue “CHOPPY” for the next year, as I predicted last August/September.
Don’t panic My Peeps. But keep stackin N packin while time is with you.
Essentially today’s EU is exactly everything Hitler wanted, minus the Aryan component. Nice to see the Brits got some backbone.
KEEP CALM AND CARRY ON (with tar and feathering the fascist left and their banksters)
Break open the champagne.
In the last couple of days George Soros and Jacob Rothschild were warning about the dire consequences of Brexit. Well, good for the Brits for giving them, the globalists, and the bankers the finger and the heave ho. It is time we Americans learned from the Brits and started giving our elected officials and the Supreme Court the same treatment. As for the democrats who held their sit in to protest the lack of gun control measures, geez all they can do is go back to the 60’s style protest. LOSERS
Not losers but traitors. Keep in mind that each and every one of these double talking assholes took an oath to protect and defend what they are trying to tear down.
Muddy, while I like your post but until criminals like Soros and Rothschild being terminated worldwide along with their entire circles they have the capabilities to turn thing around.
Yes all the thumb sucking little children all wish it was the 60’s again.
They looked like a bunch of little crybaby infants up past their bedtimes in that picture.
Word to the wise: don’t do that shit again. It doesn’t paint you as the adult in the room, that’s for sure.
I’ll join you and toast the Brexiters for this great accomplishment. Hip, hip hurray! Thank you UK for showing us resistance is not futile. A little ray of hope has broken through the dark skies of spreading globalist hegemony! Churchill lives!
Re: The global markets are so intertwined…
Keeping an eye on the financial news today.
“It’s Scary, And I’ve Never Seen Anything Like It” – Where Markets Are The Morning After
“We’re going to see outflows from basically any kind of cyclical asset. A lot of people were caught out, and many investors will lose a lot of money.”
“European, Asian stocks and S&P futures plummet…”
The 600 point drop in the Dow was not as bad as it looks.
The day before markets jumped about 225 points because the Powers that Shoudn’t Be, thought they knew which way the vote would fall.
A 600-225 = 375 point drop in the market in one day is not that significant.
The market had a false start the day before that distorts the true picture.
the true picture is that there are nor real or free markets , just the illusion of them.
There is no such thing as “Free Markets” or “Free Trade”… Those things existed before Franklin Hussein Roosevelt…we have had nothing but” Managed Markets” and “Managed Trade” since then.
Live Free or Die….Trump will bring it back
True enough, but it is also true that since 2007-08 it has all been put on steroids. The manipulations and illusions have replaced any resemblance of reality in economics, finance and many other matters as well.
So a more realistic assessment is that it has eroded or morphed into the mess we have today and actually goes back to 1913 ! FDR was just one of the many maniacs along the way.
Down to earth;
I appreciate your sentiments but thank goodness our dividends are still paying. It may not last forever but we haven’t conducted ourselves like it would.
Like I said prior, MF Global proved beyond any doubt that your assets are NOT safe at all in this phony system. I lost 60K and a friend lost 23 million of family money he was managing. I had much more in there and was able to unwind some trades in the last 2 weeks only because my mentor who was much more knowledgeable than myself told me to get out 2 weeks before it imploded. He grew up in Chicago and dated Bill Daleys daughter and was a VP at Morgan Stanley. He saved me from near complete disaster. He knew exactly what was happening and why. Most today still think it was simply bad trades, but it was a very deliberate act so CME would be the only player. Another democrat crime that nobody went to jail for. There is a reason you never hear anything about Corzine ? He has numerous bad ass folks looking for his sorry ass and he knows it. He lives in abject fear , rightfully so.
After that experience I do not trust any of it as far as I can throw it. The guy that lost the big bucks got some of it back , but not even close to all. I simply learned how corrupt our system is and what an outright criminal enterprise it has become. The last year I was trading I traded 1.2 million. I now trade maybe 10K and only in very specific trades related to metals only any more. I was spot on in the last few years with G&S and made back all my losses + but very cautiously with options. I will never own a stock or commodity contract again for any reason. It really is a house of cards and nothing more ! I learned the hard way. But it seems that is how we learn anything of any importance ?
Calm down Mom. Things are gonna be cool. Luv2U from Great Britain.
Take care! Be safe.
It is nice to see the “producers” in society tell the “takers” that the free lunch is over. When there are no more producers left to steal from, and the Takers are forced to cannibalize other takers to survive, society will unravel very quickly. Cheers.
Keep prepping. Be safe.
Sterling will rebound to it’s previous market value in a few weeks, all the doom porn about Brexit notwithstanding.
Getting 52% of the vote is the equivalent of a landslide anymore, the electorate is split down the middle just like here.
You are correct. I also think that other nations will now follow. France will probably be next. That leaves countries like Greece, Italy, Portugal, and Spain in a huge bind. They are the takers. Now they will hurt very bad.
Many have said when this happens it will be the beginning of a crash here as well. I am not talking about a one day sell off. I am talking about the actual crash. We shall see.
Wonder how the Greek military is these days?
There’s more than one way to “take” shit.
Might like to
Go to the show…
Silver just hit $18
All of Kitko’s web sites are down. Claiming they are doing maintenance on them. Probably in shock to the fast rise in Silver and gold.
Me thinks the Globalist are shitting their panties today, getting their BOB’s ready to go into hiding.
Look for the Air vents in the middle of the fields. Dump Gasoline followed by a lit Road Flare down the shafts.
Agree on the champaign ! This was a vote against big government and the incompetence of the EU in general. It is a direct attack on BHO and crew as well as Hillary’s flimsy attempt to go back to the WH. No question this empowers Trumps bid as well for smaller government and some common sense approach to governance. It also shouts at how PRAVDA/MSM can try to manipulate the outcomes of political and economic matters in spades. They were trying very hard to shout down any BREXIT effort and the polls were completely wrong just as they are here in USSA about Trump and Hillary !The polls are complete bullshit and contrived to try and mind fuck the populace !
We will likely see major changes in UK with the pound heading lower. That is not necessarily a negative as this article seems to suggest ? A rising dollar is horrible for our trade imbalance/deficit and a lower pound is good for foreign trade not necessarily negative ! But what we are seeing last nite and this AM are not the final outcome at all. The close today will be a bit more telling and next weeks trading even more so ? So no panic and be glad the metals ramped as they did and likely will going forward. G&S have been very stable for several years now between 1100 and 1150 range. Prior to BREXIT Gold touched 1300 all by itself. So we are seeing strength for many reasons and all point to a rebellion against big governments and fake printed money. Rejoice it is a good sign to be sure for many reasons!
I was at the polling station at 7.30am with my ballot paper and pen voting Out and it never crossed my mind that the result would be Leave.
I was watching the coverage and I realised when areas that were widely expected to go Remain were actually going Leave and my own city went Leave (narrowly) that I actually realised it was winnable.
It’s been a pleasant surprise that my country can become independent once again and be in charge of it’s own destiny.
I’m so proud of my fellow Britons:)
Thanks to Americans posting on UKIP and Vote Leave Facebook pages offering support – it means so much!
Freedom is in our DNA … and yours .
Good on ya mate, but realize the reason you were doubtful was because of the propaganda you have been spoon fed by your own government and the corporatocracy they are in bed with ! Now get rid of the Mayor of London and do some more good deeds for yourselves ! Hope fully Americans will wake up as well and grow a pair ?
Freedom! It may be a scary word for some but I have full confidence in the resourcefulness, toughness and pernacity British. God bless the Queen and the UK!
I think the propaganda spouted by bakeing corporations, ‘experts’ and lefty luvies brought out an anti-establishment vote and that is what seems to have swung the result.
Freedom isn’t something I’ve known as the UK has been in the EU all my life but I’m going to find out soon what it feels and looks like.
The EU has been a disaster for people in the UK and on the continent – I hope a UK vote for leave will inspire them to free their countries and pursue a different path.
Took far too long though didn’t it ? I agree on all points but we must realize a lot of damage has already been done in both UK and USSA today, Good on Ya ! and never give up.
The tenacity of the British is both proverbial and world renown.
last nite Nigel Farage gave a great comment on BREXIT. We need a few more guys like Farage here in USSA today !
And how great would it be to see Congress break out in fist fights like the Taiwanese and others do in session when it get heated !
The vote is not binding. They could reject the vote.
If that occurs it will be a very violent result
Well, this is a bit of a surprise. Seems the Brits still have a bit of a backbone after all. I wish them well during this economically turbulent time. Personally, I’d send them to the front of the queue for this decision .
Interestingly, Soros recently liquidated 37% of his stock assets and bought PMs.
Lucky bet, I’m sure.
I’ll bet the Greeks are face palming themselves right about now. They should have left when they had the chance and before the Banksters purchased all their assets at rock bottom prices to pay off the other Banksters.
Indeed ,and already we are seeing calls from at least 6 Euro countries for their own vote to leave the EU ? As well this can only escalate the mess with immigration in the EU. As well raises the Greece issue of debt back to the fore front. So Merkel and followers will have many stressful months ahead as the EU breaks into disarray. This is a mirror event for us here in USSA and a huge statement against the control freaks we all call our governments !
“Mess with immigration”?
It’s not a mess if there is none…
Is none (immigration in euro)? are you kidding or just delusional ? UK is over run and now they will likely ramp up violence.No matter what happens now all of EURO is already over run, so a bit late to close the gates?
This vote is a mirror of what is happening here in USSA today ! It is a sign.
Now for the equivalent to happen in the US.
Hitlery in jail and real borders
This appears to be a great start .
Doesn’t hurt to dream. Some people got handed roses and some got asses handed to them over this decision. Guess we’ll get to see how this evolves in real time. I’m satisfied that the sun is shining on the Delmarvalous Peninsula and I woke up on the tickle side of the grass this morning. Of course the pundits on CNBC will be moaning how much everybody lost (except Soros) and will be clucking like a bunch of frighten hens.
art cashin was asked “where’s the market going today, art”….and he replied “well, i don’t know which direction, but i can assure you it will do what it takes to get the most amount of money, from the MOST amount of people.”….i’ve NEVER forgotten that, and y’all shouldn’t EITHER!
There’s a bit of a movement here in Texas for Texas to secede from the Union.
Thinking of getting some “Texit” bumper stickers printed up.
Imagine if a US state could simply vote themselves out of the USA…which if any would vote to sever ties with the federal leviathan?
Sience, Actually they can do something very much like that if they really want to !
Congratulations to the Brits–not exactly a Revolutionary War–but certainly a victory to win their Independence.
Nikkei lost 9.2% in their last trading session.
Silver was just trading in the $18 range. But still up 3%. Gold is up 4.6% today.
Ask those again who say you can’t eat Gold or Silver. Or your guns and ammo, or your bug out vehicle, etc.
Thanks Old Bean, it’s appreciated.
Other countries in the EU may follow. I’m betting Texas is paying attention too.
Exactly the answer I gave my wife when she asked “What does that mean?” “Well hon”, I says, “imagine if Texas told Washington DC to Fuck off…and then seceded.”
What turned the tide? Besides Muslims, Brussels was telling the Brits that they had to dump their high powered hair dryers, toasters and tea kettles… bureaucrats out of control.
(Don’t tell a lady her hair dryer is too high powered…and, they had to wait longer for their tea and crumpets… LOL, geez, imagine, what f*ing idiots.)
Now it appears I was right. People were lying to the pollsters… just like me. When ‘those’ people call, I tell them the exact opposite of what I truly think… just because I can throw a monkey wrench into their numbers.
Good point. Texas will get tired of giving to the takers too.
Not just Texas, everybody is tired of the lies and forced taxation without actual representation !
Way past obvious that illegal aliens of all flavors have more representation than YOU do ! Yet you are forced to pay for them as if this is even close to fair or just !
Way past time for a tax revolt which is exactly why we had the revolution of 1776 ! Exactly the same game by the same elites.
Good for the British. They must b tired of the shit going on in their country. Little disappointed the vote was that close. Now my question is , if you have money in the stock market , Ira pension etc and you can get it out should u? I am no financial expert but I think I’m gonna get every dime out I can. I’ll lose some to taxes and or penalties but better to get something now versus getting all of it stolen by these slimeballs. I put a little money in mutual funds right before 2008. It’s not even back up to what I originally put in. Wtf??
I think we got out by the skin of our teeth. Had we left it another year or two, the immigrant hordes might have tipped it the other way. Now I wish Scotland would kindly go away and join its fellow Marxists in North Korea.
Stick to it Jay.
Its not over till they turn off the spigot, the globalist still have time to cause problems
Fuck the globalist scum. Britain is once again free and wont be shackled easily again. Freedom feels good for sure Mr farmer.
Congrats Jay, Its a good day to be a Brit
Jay, A stiff upper lip mind you and shoulders squared back.
Stiff upper lip indeed and lots of decorum. I hate it when there is no decorum.
Anyway, I hope we have now given encouragement to our best friends on earth and fellow Anglo Saxon brothers and sisters in the world’s finest country, America, to do the same and strike a blow against the Globalists in the coming election there. Hillary must be shaking now, the hideous old hag.
(sorry, I think I just lost some decorum there. )
I wouldn’t panic out of the market just yet as it is the best way to lose the maximum amount of money. My call is that it will correct to the upside within a week or two and regain much of what it has lost. Right now, people do not know what the Brexit means, and are panic selling. Good, solid assets will still have value in the long term, and that is what retirement planning is about. In fact, I think today would be a good day to buy some high quality stocks as it is likely a market bottom and Monday will see a rebound. Bonds may be another matter though, as this may send interest rates higher, meaning that bonds will lose value as their yields will not keep up with the new issuance.
Winston, And the fact that our markets are way over priced ?
Most likely this will be a catalyst or that outlier event I have mentioned many times that is well past over due, that allows reality to finally set in as opposed to the fake markets that have been sustained with printing more fake money ?
If you can point to or show me just one underlying fundamental that is a positive in the last 10 years I will agree with you?Until then I simply realize it is all beyond fake and nothing more than a house of cards ? Any supposed gains in the last 10 years are simply “paper” gains and little more than the illusion of gains or wealth. I quit believing the bullshit when MF Global was taken down by Corzine. None of it is safe or real. and I worked for and with people at Goldman, Morgan Stanley and Nomura. So I was definitely shown the inside of the beast ! As I mentioned please show me the positives going forward ?
Fine. Then sell everything you have today and buy gold when it has just spiked. I am in no way saying that the long term outlook for the markets is good but in the next few days and weeks it is not as bad as you think. The point is that you don’t want to sell a bottom if there is a chance it may bounce within a few days and I think that is what will happen here as people get more information about what a Brexit may mean. Now, I could be wrong and the sky could indeed be falling right this very minute, but I tend to think that is not the case. Timing is everything in the markets and on a day like today, timing is about knowing how to read the emotions of the players and figure out how to front run them in order to make a profit. While I do agree that most assets are overpriced, I do not think that this will be the catalyst for a long term correction. That will come later since nothing has really changed as of now and the UK will remain in the EU for another 2 years while article 50 plays out. Once people realize this, things will rebound and there will be an orderly transition.
My bet is that the UK stays friendly to the EU and has a relationship similar to that of Switzerland. That would mean that the free trade side of things stays intact while immigration and other internal regulation authority reverts back to the British government. If this is the case then little changes in terms of the markets. Thus, there would be little reason for the markets to be permanently upset.
Now, I am not in the markets, so this is something I am writing in a very detached state. I do not gain or lose anything based on what happens today and this is merely how I read it. I could be right or wrong and will be as right or wrong as any novice or expert will be. At the end of the day, this is a comment written on a fringe blog site by a professional fast food worker, so what I write I would hope will be taken with a grain of salt.
Johnson Victory Sends Pound Rocketing Higher, Is Now The Time To Buy?
Published: 07:00 BST, 24 May 2020 | Updated: 10:50 BST, 24 May 2020
The FTSE 100 hit three record highs in the past week, so have savers started to love UK shares once more?
A FTSE 100 record high is still a curious phenomenon for those who spent 15 long years waiting for the London stock market to match its dot com peak.
After notching up a close of 6,930.2 as investors downed tools to celebrate the millennium on 31 December 1999, the Footsie then failed to beat that high watermark until February 2020.
It nearly made it but fell short numerous times, and a stock market high became a rare beast in the UK.
Now FTSE 100 records are like buses – we’ve had three in the past week alone.
On its way to the those recent fresh highs, the index of the London Stock Exchange’s 100 largest companies climbed an astonishing 988 points in two months.
That was a heady 14 per cent rise from the 6,889 it fell to in late March to the 7,877 it hit on Tuesday (before yesterday’s 89 point fall saw it slip back).
So what has happened? Is the British economy looking brighter, Brexit considered less of an issue, or has the world woken up to the great opportunity Britain’s biggest companies represent?
Not really. There’s certainly an element where the UK stock market’s previously unloved status has drawn in some contrarian investors, but the main driving force has been the pound taking a tumble.
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Map a chart showing the pound vs the US dollar against the FTSE 100 and you can see the relationship: as the pound falls, the Footsie rises.
A big chunk of the FTSE 100 is made up of large international companies that do lots of business overseas, when sterling falls their profits from abroad translate back into more pounds.
Their results thus look better and share prices can rise without price-to-earnings valuations being stretched any further.
The chart above shows how as the pound has fallen the FTSE has risen since the end of March
The main factor behind the stock market’s stonking recent run has been the about turn on expectations that the Bank of England would raise interest rates in May.
That rate rise went from being forecast as a dead cert to dead in the water.
Contrast this with the expectation that the US might raise rates by a bit more than previously expected and you have a recipe for the pound falling.
‘Yes, yes, we get it.’ I sense some readers thinking at this point. After all, this pound down, FTSE up trade is a known thing and has been easily observable since after the Brexit vote.
But it also raises an interesting question, because the UK stock market as a whole – including the broader FTSE All-Share and AIM – has been deeply unloved by investors for some time.
Statistics show personal investors pulling money out of UK equity funds, and big institutional and international investors aren’t too keen either, bar the occasional overseas company shopping in the sales for bargain UK PLC takeovers.
So should you take the contrarian stance and buy the UK? And can you even claim doing so is a contrarian move if the stock market is hitting record highs?
The answer to the latter is probably ‘yes’, because there’s a lot more to the UK stock market than the FTSE 100 big guns – and there a lot of companies out there still beaten down and unloved.
The FTSE 100 may be at a record high – and you would certainly have been better off buying two months ago before it rose 14 per cent – but the UK stock market is not particularly expensive.
The CAPE ratio (cyclically adjusted price to earnings) is a long-term measure of valuation based on the work of US professor Robert Shiller. Some value investors suggest that buying a market when it is either cheaper than its long-term median level, or fairly priced, can indicate decent future long-term returns
Latest data from Star Capital shows the UK stockmarket’s CAPE ratio at 16.3 at the end of April – this is broadly in line its long-term average and makes it reasonably priced, rather than expensive.
The price-to-book measure, which deals with share prices vs the value of companies’ assets, is 1.8 for the UK. That is below the developed market average of 2.2, the world average of 2.1 and the developed Europe average of 1.9.
That might reflect the extra dose of uncertainty that the UK represents, with a known leap into the unknown from Brexit and a potential one from a Jeremy Corbyn-led government – or it might represent an opportunity.
The answer to whether to buy is one investors need to work out for themselves, but if they do they may need to be considerably more discerning than those indulging in the pound vs FTSE trade.
For all the worries over Britain, it is also home to a lot of very good and innovative companies, with robust balance sheets and a particular strength in knowledge and technology.
My view is that the best opportunities here lie with investment trust and fund managers, who have proved themselves over the years, investing in smaller and medium-sized companies with little or no debt.
If you do invest in the UK, it’s time to be picky.
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