Alternative Thinking on Brexit…the Brexit…and What the Brexit, Brexit…

Jun 24 2016 | 1:00pm ET

The Daily Alpha: Alternative Thinking on Brexit…the Brexit…and What the Brexit, Brexit…
By Garrett Baldwin

There are thousands of stories about Britain’s decision to depart the European Union. Here’s a round-up of 10 that catch our attention.

“The EU should regard the referendum result as a wake-up call.”

That’s Mark Gilbert at Bloomberg. 

The author warns that the European Union should avoid “revenge” upon the UK in response to the British vote to leave the world’s largest economic bloc.

As he notes, British voters aren’t the only part of the European Union upset with the bureaucracy of Brussels.

“The proportion of French respondents with a favorable view of the EU, for example, slumped to 38 percent [this past month] from 69% in 2004; in Spain the deterioration was to 47% [this past month] from 80%.”

Too many people have been saying that UK citizens voted against their own self interest.

Voting in for your own sovereignty is the basic definition of self-interest.

Do we really think that the EU is going to shut down access to its second-largest economy?

The argument for most of the pro-Brexit crowd was the impact of regulations on the British economy. Slapping more regulations in the form of taxation would be a ham-handed response.


“I have been listening to all this talk of risk in emerging markets, but the incalculable risk was right here at the EU’s door.”

That’s Quijano-Evans at Commerzbank AG.

Everyone overlooked what was right in front of them.

This week’s rally has ended. Now, everyone is looking around with their eyes in the sky.

That’s the danger of complacency.


"It's a great day for humility."

That’s Jim Grant on Squawk Box this morning. 

Grant explains that markets were just flat out wrong all week.

In an interview in which Andrew Ross Sorkin and Marc Faber tried to argue that the Brexit vote was a bad case for international order and the markets…

Grant explains that it’s a great time “value investors.”


“I think I may be the winner. I’ve had a pretty tough year.”

That’s hedge fund manager Crispin Odey.

Odey has long supported the Brexit and might end up with one of the biggest gains out of the entire industry.


“Brexit could well be the worst self-inflicted policy wound by a G7 country since the formation of the G7 40 years ago.”

That’s Larry Summers…

As we all know, Larry Summers is never wrong.

Ever.

At least he hedged his prediction with the word “could.”


“Basically they took back their country.”

Donald Trump… in Scotland, while opening a golf course.

He’s talking about the Brexit in a country that is now poised to leave the United Kingdom, while he opens a golf course and wants to run the U.S. government?

Not even a great fiction writer can make up this stuff.


“In the end, all politics is still local.”

Joseph Schatz at Politico explaining there isn’t a connection between Donald Trump and the Brexit.

It’s a good piece, but its just more of the same: political writers still in political denial.


“Stephen Hawking and around 150 other members of the Royal Society at Cambridge University have 
said that a vote for Brexit would be a "disaster for UK science and universities."

That’s Amar Toor at the Verge. 

This is exactly the type of fear-mongering that makes absolutely no sense in the long run.

It implies that all of the funding for some of the world’s best universities is going to magically disappear. It will be the end of science. We will be cast back into the dark ages of flat earth societies and burning witches to appease the Sun.

Can we all calm down and realize that there was a lot of rent-seeking going on here?

Can we take a few minutes and realize that once Britain’s economy stabilizes, its Universities will no longer have to appeal directly to Brussels?

Why again do scientists need to seek direct funding from public resources all the time?

Are there not crowdfunding efforts and private companies engaged in these fields?


“World leaders reacted swiftly to the United Kingdom's vote to leave the European Union, with many expressing deep concern and uncertainty over the referendum.”

ABC News has a round up of quotes from European leaders discussing what they will do next.

You’ll notice a strain of outrage is a common theme for people who had a lot to lose.


“The people of the United Kingdom have spoken, and we respect their decision.”

Finally, that’s President Barrack Obama. 

Funny, the President respects their decision now.

It was just a few weeks ago that he was actually in London threatening to push England to the back of the line when discussing trade deals. How did it go again?

“[Obama] warned that the U.S. wouldn’t cut a trade deal with the U.K. ‘anytime soon,’ saying one of America’s closest allies ‘is going to be in the back of the queue,’” The Wall Street Journal writes.

This was a glaring sign that the President doesn’t understand how free trade actually works.

Did this guy study mercantilism while in Congress or market capitalism?

Why are a bunch of bureaucrats necessary to free trade agreements?

Free trade agreements don’t involve massive negotiations like NAFTA or NATO.

An American company should be allowed to show up in London tomorrow and say, “I’ll give you money for this,” and the government stays out of it. Governments aren’t trading with other governments. No one in Congress is trading with members of the English Parliament.

Free trade happens between individuals and companies in one nation with individuals and companies in another nation, typically through intermediaries like importers and exporters.

Some one needs to just invent a board game so that our leaders can understand how it works.

It’s not complicated.

Garrett Baldwin is the voice of The Daily Alpha column and features editor for Modern Trader


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