Brexit cost investors $2 trillion..the worst one day drop ever..China could be the biggest winner
The U.K.’s referendum to leave the European Union was a costly decision in more ways than one.
Worldwide markets hemorrhaged more than $2 trillion in paper wealth on Friday, according to data from S&P Global, the worst on record. For context, that figure eclipsed the whipsaw trading sessions of the 2008 financial crisis, according to S&P analyst Howard Silverblatt.
The prior one day sell-off record was $1.9 trillion back in September of 2008, Silverblatt noted. According to S&P’s Broad Market Index, combined market capitalization is currently worth nearly $42 trillion.
As bourses sold off from Asia to the U.S., the fallout from Brexit culminated in the Dow Jones Industrial Average racking up a 600 point loss. Bloomberg’s Billionaires Index noted that the world’s 400 wealthiest investors lost a combined $127 billion in Friday’s market downturn.
“Brexit is the biggest global monetary shock since 2008,” said David Beckworth, a scholar at the Mercatus Center at George Mason University, in a blog post on Friday. “This could be the tipping point that turns the existing global slowdown of 2016 into a global recession.”
Beckworth also noted that risks stemming from the U.K.’s decision is “hastening the the frantic race to bottom on safe yields.” Safe-haven government bond prices have soared around the world, pushing yields to near-historical lows. Bond yields move inversely of prices.
Massive demand for safe-haven assets is outstripping supply, he added, meaning currencies like the yen and U.S. dollar, as well as government bonds and gold, are likely to keep booming.
Brexit-caused losses of the world’s 400 richest people amounted to an eye- watering $USD127.4 billion in a single day, Bloomberg estimates. Rich Britons have lost a “mere” $5.5 billion, according to reports.
The Brexit vote has sent European markets into the steepest decline since 2008. The pound plummeted to a record low, not seen since Margaret Thatcher was prime minister some 30 years ago.
The Bloomberg Billionaires Index says billionaires lost 3.2 percent of their total net worth, now estimated at $3.9 trillion.
The United Kingdom’s vote to exit the European Union is creating a lot of losers: London’s finance industry. British Prime Minister David Cameron. The pound. The grand cause of European integration. But out of all of the market turmoil and uncertainty will emerge at least one big winner: China.
In the short term, of course, China’s struggling economy may take a hit from the chaos in the EU, its second-largest trading partner. A smaller, less-stable European market and more cash-strapped consumers aren’t good news for Chinese exporters. Over the longer term, though, Brexit is almost certainly in China’s economic and political interests.
there are always winners and losers..you cant have winners without losers..
“The United Kingdom’s vote to exit the European Union is creating a lot of losers: London’s finance industry. British Prime Minister David Cameron. The pound. The grand cause of European integration. But out of all of the market turmoil and uncertainty will emerge at least one big winner: China.”
the sun did rise though..so life goes on..
“Brexit is the biggest global monetary shock since 2008,”
“Worldwide markets hemorrhaged more than $2 trillion in paper wealth on Friday”
more to come..