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Editorial
What does Brexit mean for the next presidential election?
Friday, June 24, 2016
In Scotland to visit one of his money-losing golf courses, Donald Trump congratulated Britain on its vote to leave the European Union, saying he was happy to see people take their countries back.
Stock markets weren't so sure about the Brexit vote.
The U.S stock market dropped about 2 percent on open but was coming back at press time.
Markets were down 2.4 percent in London, 6 percent in Frankfurt and 8 percent in France and Spanish and European bank stocks were headed for their sharpest one-day drops ever.
English voters favored leaving the European Union 52 to 48 percent, and Prime Minister David Cameron is resigning.
Scotland, which rejected the idea of leaving the UK in a vote two years ago, may revisit the issue, and the British pound and euro were both down by record amounts.
The upside is that the Federal Reserve is not likely to raise interest rates any time soon, and there might be some bargains for investors willing to take a chance.
You probably don't want to check your 401K or other retirement accounts today if they're heavily invested in the stock markets, and you'll pay a relative premium if you try to find a safe haven in gold, the yen or U.S. treasury notes.
"In the US there is a clear parallel between the rise of Donald Trump... and what is going on in the U.K. and the rest of Europe," said Rob Carnell, U.S. economist at ING-DiBa in a story by The Associated Press. "The recovery has left large swathes of the population behind, and this is their protest."
"I think this vote has been a vote against open and integrated societies, quite frankly," said Guntram Wolff, director of the Breugel think tank in Brussel. "And I think the sentiment in many other European countries...would be to say, we will not counter that, we are so fearful, that we will basically try to counter populism by following the same road and be more protectionist," he said in the same AP story.
It will take a while for the markets to sort things out, and there's a possibility of more defections from the European Union, but Thursday's vote should give some indication of the results we can expect from our own election this fall.