Thursday, June 23, 2016

Reader Alert: Jim Rickards issues an alert due to Brexit Vote

Today I listened to Jim Rickards monthly webinar which is not yet posted to the internet. Jim pretty much nailed what is happening tonight in regards to the Brexit vote. Jim said today that should the Brexit vote pass it would be important to monitor events very closely.

If global markets start to sell off too much it could trigger a derivatives failure somewhere in the system (contagion- recall Lehman in 2008). The point is that this situation could lead to a deeper crisis of confidence that would force some kind of global response by the central banks etc. I did reach out to one expert source who tells me he is not seeing liquidity concerns so far. It's just important to stay alert to events right now in my view.

Tonight Jim is making even more comments about all this on his Twitter feed. I would recommend readers here follow Jim on his Twitter feed while this situation unfolds. You can do that here.  (see examples below for how serious he is taking this event)

I will keep this post updated today with any significant twitter comments.

At 10AM CST):  while we are seeing market selloffs as expected, we are not seeing the kind of selling or market reaction that would indicate a panic or crisis situation. Unless something changes significantly later today, it does not appear that we will see any market closings or bank closings. Just normal market reaction so far. This does jive with what an expert source told me last night that he did not see any signs of an immediate lack of liquidity.


These two are immediate reaction last night after the vote results:

Lots of talk about bank holidays & closing exchanges in UK. Please don't tell . He says it can't happen

You'll see this sign around the world on Friday. When they closed UK exchanges in 1914, the sign said "House Closed"

This one from 7AM (CST) - 6-24-16:

What we've seen so far is repricing. Next comes momentum. Then contagion from margin calls. Last stage is . Let's see if it gets there

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