Wednesday, June 29, 2016


'Twas a grand day.  It started with Cameron back from Brussels where reports had it that he had been battered...and everyone ignored the reports.  Up went the market and by the time things got going in New York, things were really rolling.  The DOW close up 285 points and everything else followed.  The realization that the UK was not going to sink beneath the sea grabbed everyone and the geniuses who predicted disaster were fewer and fewer to be found.  Of course the July 4th. weekend is coming up so a lot of them might have been off to the Hamptons, having gotten square, where they could count their losses and blame them all on the stupidity of the British voter.  As Richard Haass of the Council on Foreign Relations said the other day--in public, mind you--"These issues should never be left to a referendum."  I'm sure he'll convince everyone at Donut du Jour in Sag Harbor this weekend...if the place still exists. After a few, he might consider a little swim in Plum Gut.  Glub, glub.

But wait!  It got better.  After the bell, Big Danny and his mob announced that from their standpoint 33 out of 35 major bank had paid the vig, got the numbers right and passed the capital plans on their stress test.  Announcements of raised dividends and buy-backs immediately followed.  In after hours trading, the entire sector was up.  Keeping in mind that it was this sector that suffered the heaviest losses on Friday and Monday, tomorrow's opening could be through the roof--keeping in mind that I don't know a damn thing about the stock market.

Oh, the two banks that did not pass?  The U.S. units of DeutscheBank and Santander; which is indicative of what the Euros are facing.  After 8 years, their financial sector still hasn't gotten itself out of the deep do-do in which it has been mired.  Frankly, I'm a bit surprised at Santander but NOBODY is surprised at Deutsche and I suspect that there are many others in the same boat who simply don't operate in size Over Here.  Not to panic, however, as  DeutscheBank has its Angie.  Anybody know the German for bailout?

So, what's it all about, Alf?  Back to original prediction.  The howling will die down, July will come and go and all of the Continent will shut down for August.  While this is going on, the Conservative Party will choose a new P.M. from, I suspect, a goodly number of applicants for the job--more than people expect.  He or she will take control when Cameron decides to leave.   Boris is odds-on but there is a reasonable chance that a REMAIN member might get the nod and this could be important.  Cameron's time-table will come to pass as many in the leadership realize that time is on their side and the Euros can't do a thing until the UK invokes article 50, all the time watching as things get nastier both politically and financially.  There will be rumblings to declare Mario Draghi a Living Saint but look out for Greece in this whole thing.  Their bargaining position has just traded on a major up-tick and it will be interesting to see how far they are prepared to push it.  I believe that the time is now for them to get the best possible deal even if a bit has to come direct from the Bundesbank--which is a total no-go, but in times of stress a way could be found.   Anyway, this is a day to day proposition, so let's wait to see what happens tomorrow.  Fascinating, truly fascinating.

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