“There’s no doubt that the consequences will be negative on all sides.”
June 22, 2016
A slim majority of Britain’s population has decided that it is willing to weather an almighty economic and political storm in order to declare national independence and leave the European Union.
Globalists and central bankers are not happy that they have been defied. This was never going to be pretty.
The world’s major banks have been instantly absolutely hammered by the decision. The markets had heavily bet on the UK remaining in the EU.
Britain’s biggest banks faced double digit losses on the stock markets, with shares plunging. Barclays dropped by 23.08% to $8.60, HSBC shares dropped 7.35% to $31.25, Royal Bank of Scotland sunk a whopping 19.63% to $6.02.
All in all at the time of writing, Britain’s banks were facing a $100 billion smackdown, while world stocks saw more than $2 trillion wiped off their value.
The British pound took a massive nosedive by 18 U.S. cents, hitting 31 year low, reaching a 10 percent plunge at one point, and marking by far the biggest drop in recent history. The euro also dropped by 3 percent, with investors fearing it may eventually completely collapse altogether.
In the US, JPMorgan Chase shares were down 6.26% to $60.04. Bank of America shares fell 6.34% to $13.15, Citigroup shares dropped 8.3% to $40.77, and Wells Fargo dived 4.7% at $45.66.
The big investment banks were also hit hard with Goldman Sachs shares down 5.26%, and Morgan Stanley shares dropping 8.57% to $24.94.
Almost every major financial institution was forced to declare that they will provide emergency liquidity to stabilise the global economy.
The impact of Brexit on the banks was made even more massive by the fact that they had been certain that Britain would remain in the EU.
Goldman Sachs Chairman and CEO Lloyd Blankfein admitted that the bank had been planning for months for a remain outcome. “Goldman Sachs has a long history of adapting to change, and we will work with relevant authorities as the terms of the exit become clear,”Blankfein noted.
JPMorgan released a statement urging that Britain will not immediately leave the EU.
“The framework of the UK’s engagement with the EU, including trade agreements, will be negotiated over a period of years,” Chairman and CEO Jamie Dimon wrote. “For the moment, we will continue to serve our clients as usual, and our operating model in the UK remains the same.”
The bank acknowledged, however, that it will most likely have to “make changes to our European legal entity structure and the location of some roles.”
“We recognize the potential for market volatility over the next few weeks and we are ready to help our clients work through it,” the statement read. “As of today, there are no changes to the structure of our clients’ relationships with JPMorgan Chase or their ability to work with our firm, but again this may change in the coming months or years.”
Deutsche Bank’s chief executive John Cryan expressed complete contempt for the decision, saying “there’s no doubt that the consequences will be negative on all sides.”
“I’m afraid that this is not such a good day for Europe,” Cryan wrote, adding “I am a strong supporter of the European project… As a Briton and a European, it especially saddens me that Europe has obviously lost its attractiveness for many of my fellow countrymen.”
While IMF head Christine Lagarde called for “a smooth transition to a new economic relationship between the UK and the EU,” heads of finance and top central bankers from the G7 warned of untold “adverse implications”.
“We recognise that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability,” a G7 statement read.
The predictions of financial armageddon are already coming thick and fast. Australian investment strategist Matt Sherwood said “Obviously, there will be a large spill-over effects across all global economies … Not only will the UK go into recession, Europe will follow suit.”
Figurehead of the leave campaign, and UKIP leader Nigel Farrage stated this morning that the Brexit win is a “victory for ordinary, decent people, a victory against the big merchant banks.”