Brexit

Featuring Raoul Pal, Grant Williams

In the wake of the momentous Brexit vote on the 23rd, Raoul Pal and Grant Williams look through the politics to assess the likely impact on financial markets.

Published on
25 June, 2016
Topic
Macro, Brexit, Politics
Duration
23 minutes
Asset class
Equities, Currencies, Bonds/Rates/Credit
Rating
18

Comments

  • sl

    simon l.

    11 7 2016 07:04

    3       1

    Thanks for the focus and clarity. Constructive analysis of market trends - refreshing break away from the pomp and rhetoric of the Brexit politics and social change. Pharma equities have been struggling to regain share prices after the China syndrome in winter 2016. Now what happens ? I feel no visibility into the true value of many Pharma stocks! Asian wealth and population growth make attractive markets for long term investment in medicines and diagnsotics-BRICS has been a strong engine of "emerging market" growth over the past 10 yrs for health care. Unfortunately the last 1 year of stress, dysfunction and collapse of Brazil, Russia and China economys creates incredible uncertainty where/ how Pharma/Biotech sector will sustain sales in these markets?? The roller coaster volatility rides are acceptable and "healthy corrections" are okay- FDA and EMEA regulatory decisions and guidelines. The problem is as a layman investor I can no longer judge the "true" short term and mid term value of the pharma /biotech firms because of the distortions you guys explain!!! -a) cheap money/ Fed low interest rates b) rigged/ banking and finance systems, c) corrupt politics. Investors like me get burnt from market down turns which erase 5 years of profits in 1-2 days of trading respectable companies (i.e. JnJ, Novartis, Abbot, Abbvei, Pfizer, GSK, Amgen, Celgene, Teva). This is not good healthy capitalism, but rather out-sourced Service Technocrats and shadow bankers running the show.

  • KC

    Klendathu C.

    10 7 2016 13:32

    0       0

    Another great video. Grant and Raoul at their finest. Their unique perspectives intertwine to find this peerless thread from Brexit.

  • SB

    Stewart B.

    3 7 2016 18:20

    1       0

    Thanks gentlemen. From someone in London, I suspect Article 50 won't happen. Consider the scenario where the next PM is pro remain and will plan signing A50 next year. But by then the unexpected has happened (as unexpected events do), eg Russia in the Balkans, US in recession, European bank bailouts or whatever. They then pull a Janet Yellen and say, 'We need to be patient as the global system has changed'. Patience goes on for years and never happens. Just my thoughts. Please keep the analysis coming from RealVision

  • GT

    Graham T.

    1 7 2016 12:33

    0       0

    Brexit, Political elite, WTF!!
    you're only supposed to BLOW THE BLOODY DOORS OFF

  • JL

    John L.

    28 6 2016 22:38

    1       0
  • DS

    David S.

    28 6 2016 19:41

    1       1

    It is reasonable for the people of Scotland to rethink their own sovereignty after the Brexit vote. One of the reason given for Scotland remaining in 2014 was the economic value of being in the EEC. The decision to leave or remain now is an opportunity for the citizens of Scotland to review, negotiate and decide again. It seems to be framed in the press as staying with Great Britain or joining the EEC and Euro. In the land of Robert the Bruce, David Hume, Adam Smith and James Boswell, I am sure that they can figure this out. Good Luck.

  • DS

    David S.

    28 6 2016 18:47

    3       0

    It has now been several days since Brexit. Sometimes we are forced into our best decisions. Brexit may be an excellent example. PM Cameron and the Conservative Party have navigated the Brexit aftermath beautifully. They understood their job and started to implement Brexit quietly and forcefully. They did not make demagogic tweets or pander to the people or press. Chancellor Merkel, the most pro EEC and Euro supporter, rose to the occasion by supporting the democratic Brexit vote. These are leaders of substance and I wish all of them well. When the dust settles, the Conservative Party in Great Britain will agree that self-governance is more powerful than rule by the elite in Brussels. After all it is a British tradition.

  • TP

    Tay P.

    28 6 2016 14:02

    0       0

    Great views! Would be grateful if you can share your views on the upcoming "fiscal stimulus" effect on US Dollar and any unintended consequences of such a stimulus.

  • NH

    Nigel H.

    28 6 2016 11:32

    0       0

    Guys thanks for the urgent update - fantastic service. The markets got Brexit badly wrong because it was following London-based media, pollsters and politicians. No one wants to get out in the sticks anymore to get a view of public opinion. My wife (who is a Facebook addict) got onto pro-Leave and pro-Remain sites and saw overwhelming support for leave. US elections may pan out the same way. Many of the answers can be distilled from social media.

  • JM

    Jason M.

    28 6 2016 09:56

    0       2

    Great presentation.
    But Raoul, my man, is there some poor gypsy fortuneteller missing her bracelets? :)

  • B

    Bojo .

    28 6 2016 07:30

    2       0

    Excellent! I know that you two guys are two humble to focus RV on yourselves, but it would be great if you have this as a monthly or so conversation.

  • jw

    jackson w.

    27 6 2016 22:12

    0       0

    this was excellent. usd and gold up, industrial metals down, along with oil. very interesting times. the world is changing and changing fast. thanks for the content.

  • EL

    Elizabeth L.

    27 6 2016 18:20

    5       0

    Thank you Grant and Raoul for taking the time out of your weekend to do this most helpful and insightful analysis. Will watch this one again and again as this market progresses into the changes.

  • TT

    Tick T.

    27 6 2016 15:43

    2       0

    Thanks guys. So, if the markets got it wrong re Brexit - who won?

  • SS

    Sam S.

    27 6 2016 15:12

    0       0

    Looks to me like Gold will fall off hard then blast to the upside. Money will come off the table the bets placed again. WTF do I know?

  • RM

    Ryan M.

    27 6 2016 13:35

    3       0

    As I learned from Jesse Livermore, "bad news" has little effect on a true bull market. Good news has little effect on a true bear market. We received bad news on Friday (even though it's best for Britain long term), and the markets nosedived. We are not in a bull market. Raoul is right. Something has changed allright...

  • AS

    Alex S.

    27 6 2016 12:23

    4       0

    You guys are amazing. really appreciate the sober manner in which these talks always seem to go down.

    love it, love it, love it ;)

  • MH

    Michael H.

    27 6 2016 12:16

    1       0

    Great stuff. A lot to think about here! This is why I joined real vision TV, which is far exceeding my expectations.

  • KS

    Kathleen S.

    27 6 2016 11:08

    9       0

    The leave vote and the rise of Trump are the people's reaction to governments that no longer care about their well being and governments that have been hijacked by the Banksters and big corporations. IT IS A REJECTION OF THE NEOLIBERAL AGENDA that started under Reagan and Thatcher; maybe they are not sophisticated to know what they are rejecting, but they know the system no longer works for them. Markets no longer even represent the real economy - they are a reflection of CB intervention and Bankster financialization - FYI the FED can never raise rates without bringing this house of cards down (it really is just a big Ponzi scheme) so like Greece we get more pretend and extend - until we don't.

  • MB

    Michael B.

    27 6 2016 09:14

    0       0

    thanks for great presentation. You mention bitcoin at the beginning, and say that you will discuss later but sadly you did not do that... any thoughts? or just maintaining you view?

  • TS

    Thomas S.

    27 6 2016 08:59

    5       7

    Now is the time to get George Soros on RVTV!

  • EB

    ELIZABETH B.

    27 6 2016 07:07

    4       0

    Urgent! More information is needed about the BANKS. BANK PERFORMANCE INDEX US/EU/JAPAN shows low rates stand in the way of expanding net interest margins. There are also rising credit losses outside of the commodity sectors. In addition, the annual rate of change of the sum of charge-offs and delinquencies in commercial loans are rising a record fast pace as of Q1 2016 at 122% y/y. It is surpassing even the rate of change park seen near the trough of the "Great Recession" of 2007-2009.
    Lastly, Credit is very tight. CLO's are the basis of the shadow banking system. CLO's are falling due to the shortage of leveraged loans.

  • GM

    Gerald M.

    27 6 2016 04:51

    3       0

    That was a seriously good discussion. I get nothing like that from other media sources. Thank you Raoul and Grant.

  • an

    adrian n.

    27 6 2016 04:49

    0       0

    Good discussion. The western world is turning Japanese, or is it? How can they all turn Japanese simultaneously? Japan had people to export to when they started stagflation/disinflation. Japan will probably fall headlong into depression then the rest of the west will follow. I don't think it will take 20 years.

    Unless of course....

  • J

    J. .

    27 6 2016 03:20

    1       0

    They both were wearing Polo shirts! I think I should buy Ralph Lauren stock now.

  • BA

    Brian A.

    27 6 2016 02:07

    2       0

    Great Stuff Guys....thx!

  • MB

    Mike B.

    27 6 2016 02:04

    3       0

    The value add of RV is the timely response from RP and GW on topics of interest such as BREXIT fallout.

  • MB

    Mike B.

    27 6 2016 02:02

    4       0

    I LIKE THE FACT THAT RAOUL AND GRANT HAVE INTELLECTUAL DISAGREEMENTS AND HAVE TO DEFEND THEIR POSITION.

  • CH

    Calvin H.

    27 6 2016 01:09

    1       0

    At the 8min mark is where you both delivered for me. What is going to happen in the markets. R quickly countered G's point that market is going to 'take back' ownership. I concur, the Fed offensive team is warming up to get into the game with another round of QE. The market is nowhere near ready to man up and take what is rightful ours. We need a major recession and more crisis's then a single Brexit. Just one more brick in the wall.

  • TR

    Thomas R.

    27 6 2016 00:51

    2       0

    The best part about RV is that it makes you think. Tom Rae

  • TR

    Thomas R.

    27 6 2016 00:41

    3       0

    Raoul - unless I'm mistaken - you appeared to be a little under the weather. If that was so - hope you feel better.

    Tom Rae

  • DS

    David S.

    27 6 2016 00:32

    0       1

    If everyone is going to buy US treasuries and the US dollar is going up, why will treasury rates fall?

  • RA

    Robert A.

    26 6 2016 23:51

    2       0

    Thanks guys for getting on this straight away and as they say, "Stay Tuned"!

    Of interest to me is the fact that the markets"got it wrong" and my understanding is that they very, very, rarely do. So....is this a "one off" or has the sea change Raoul is noticing a precursor to perhaps the markets simply not being able to, indeed, "get it right" in the future; are things and correlations becoming so unhinged that the markets have lost their predictive abilities? Now THAT would be quite an unwelcome mooring status change.

  • LA

    Linda A.

    26 6 2016 23:27

    8       1

    Brilliant conversation! I applaud the UK for brexiting. The EU was failing badly in its prime goal of creating a better economy with creating jobs, unity. Instead central banks caused a greater wealth gap. Loans not getting paid back in Italy, DB with derivatives. In my opinion, DB is already insolvent and gold & silver is now trading like a currency rather than a commodity -going parabolic as the economy unravels. The charts are telling in that once a major trend breaks further downside is warranted. UK will be fine look at Iceland- they got rid of their bankers & now their economy is doing much better.

  • DS

    David S.

    26 6 2016 22:46

    11       1

    I am optimistic about Brexit because I believe in Great Britain, its people and its traditions. (I am an American.) The elites in Brussels did not listen to practical reason. Prime Minister David Cameron did his best to renegotiate the EEC terms with Great Britain. Brussels bureaucrats just said "Let them eat cake". If immigration were better dealt with by Brussels, Brexit would not have happen. Hopefully now Brussels will listen to the citizens remaining in the EEC.

  • jm

    jim m.

    26 6 2016 22:35

    2       0

    Thank you guys for at a minimum, highlighting the importance of Brexit. One area I hope you will focus on is why the dollar will go up in an environment of U.S. declining interest rates and soft economy. Go up against what? Yes, it seems like the Euro will fall. However most people thought the Yen would fall given negative rates? I think you should do a program focused on the world's most liquid cuirrencies: USD, BP, Euro, Yen, Aussie and even NZD.

  • DS

    David S.

    26 6 2016 22:22

    0       0

    Sorry, I do not know how I posted this comment twice.

  • DS

    David S.

    26 6 2016 22:20

    3       0

    One big take away from Brexit for me was how wrong the English bookies were. The world stock markets followed the bookies in lock step. It may be that most of the bookies were in London; listening to people in London, taking bets from people in London. (London voted solidly for Remain.) Did the bookies sit down in the pubs elsewhere? How many bets were from outside of London? Were large bets made by hedge funds or politicians as a head fake? It could have paid off.

  • B

    Bob .

    26 6 2016 22:07

    0       0

    Excellent and very importantly this piece was posted quickly. The only suggestion I have about your service is that often times there is a one week lack time between the interview and posting.

    Continue the good work. I think Brexit won't take place, but there is plenty of downside and damage that will happen prior to a nullification of the exit process. The real question is how a reversal will be meet by the global markets.

    Thanks.

  • BL

    Bruce L.

    26 6 2016 21:26

    2       0

    9/11 a good comparison as it did not cause the economic downturn which was already in place. What it did do was catalyze a big response from govt to support the economy. That seems likely here too. Both central bank and fiscal authorities in every major country will be acting in some haste to provide support. (they will call it stability) Should be good for gold but also equities out 9-12 months.

  • DU

    Don U.

    26 6 2016 21:15

    3       1

    Outstanding discussion. Thank you. Brexit seems to me just another step towards an uncertain future, but I'm proud of the Brits for rejecting a stultifying - hope destroying bureaucracy. We face a miasma but, perhaps we always have. When all current government currencies fail to pass a confidence test what happens? I have no idea so, we live in interesting times.

  • SL

    Steven L.

    26 6 2016 21:09

    1       0

    R & G, when you say everyone will pile into UST, does that include agencies or just 10y & 30y?

  • KK

    Karl K.

    26 6 2016 21:00

    8       0

    This is why I am a subscriber. Thank you for the rapidity in getting this piece out.

    What are your thoughts on oil?

  • TJ

    Terry J.

    26 6 2016 20:53

    3       1

    Invaluable market insights gentlemen as always. Brexit is a wake up call to the elites that more and more of us are emerging from the matrix and unwilling to further endorse an undemocratic United States of Europe. Small is beautiful if you value freedom and democracy and I think you are right to warn that Brexit could be the tip of the iceberg for the EU. The beginning of the end I hope for the ill fated European political and economic experiment. Expect Grexit, Spexit, etc. to follow as their electorates tell Brussels where to shove their bureaucracy, their flawed Keynesian economics and stillborn Euro currency. Your investment advice to load up on government debt and gold strikes me as extremely sensible.

  • PT

    Philip T.

    26 6 2016 20:24

    7       0

    Superb! Please have face to face discussions more often.

  • GS

    Gordon S.

    26 6 2016 20:15

    10       0

    Totally agree, Nr 1, on my wish list are more debates; a debate between R & G is icing on the cake! Please more. Thanks for this amazing one in the mean time!

    More central bank printing world wide is a given, I think everyone agrees with that? But bailouts will be coming for the banks too, so shorting could be dangerous?

    I was surprised by Marko Papic saying no other country will want to leave the Euro soon, from all the calls for referendums I may disagree. When EMU countries start wanting to leave, that's when Central Banks will lose control because of redenomination risk seriously picking up? I was surprised explosion in for example Portuguese spreads were not covered in the interview.

    We live in interesting times; looking forward for the near future coverage on RV!

    P.S.: And thanks for making this already incredible website still better every day!

  • AV

    Alvern V.

    26 6 2016 20:01

    9       0

    I think it's interest when talking about a "black swan" event...As Jim Rickards says, when you identify that there is risk in the system, does it matter which snowflake sets off the avalanche?

  • sa

    santosh a.

    26 6 2016 19:43

    2       0

    Great advise to focus on markets. Its going to signal the undercurrent. The banks are caught in a vise as the CBs are trapped in their own incoherence. They can't unwind QE, NIRP, etc. They can only escalate. These moves nail banks P/L to the floor.

    As far as politics is concerned its highly unlikely that Brexit will actually happen. As we've seen with other votes regarding the EU, the apparatchiks either get folks to vote again until the desired result is achieved or they find a way to completely disregard the vote. This is democracy in the West, who happily lecture everyone else about it.

  • DR

    Daniel R.

    26 6 2016 19:43

    4       2

    Great conversation. I don't quite get the 'ignore the politics' angle though. The huge political uncertainty coupled with the highly politicized and uber correlated financial system has to be the driving narrative for the rest of the summer, maybe beyond. No?

  • GT

    Graham T.

    26 6 2016 19:34

    1       0

    That's why we subscribe. The lads voted different ways (I was with you Grant) but can still pick through the arguments with excellent salient points. Just fab , I wonder what Kyle, Julian, Traders etc think.

  • GE

    Garry E.

    26 6 2016 19:14

    3       0

    Worth the year's subscription for that conversation alone. I don't agree with everything you said but, having read almost everything in the media about Brexit over the past two days, this was the most insightful.

  • JS

    Jon S.

    26 6 2016 19:08

    1       0

    Excellent discussion, men. I 100% agree that its the markets that need to be watched, blocking out all the other nonsense. Brexit is the Black Swan, all need to strap in as the ride has just begun. Thanks again RVT!

  • KM

    Ken M.

    26 6 2016 18:53

    4       0

    Great comments, very helpful. Check Ben Hunts incites in the latest Epsilon release about this being a Bear Stearns moment and not a Lehman Bros.

  • WM

    Will M.

    26 6 2016 17:55

    3       0

    Super discussion and very timely for RVT viewers as who knows what will happen over the coming days and weeks. GREAT ADVICE from Raoul and Grant, forget the political chit chat and focus on the market movements which as Raoul says, seem to be at critical break levels. Dollar and gold up together could signal the end game to the crisis has begun, for American viewers we are in the 9th innings! I will be glued to RVT daily going forward.

  • cc

    chris c.

    26 6 2016 17:36

    0       0

    thank you for your time

  • GH

    Gregory H.

    26 6 2016 17:28

    2       0

    UK is in much better shape than EU to restructure banks and take drastic action, they can go right back to QE/negative rate, and don't have to worry about whether the Germans (1) finally let the ECB go crazy with QE and backdoor bailout the big debtor Euro members (US of Europe route) or (2) continue to impose depression on PIIGS and weaker members going into already weak macro backdrop...

  • GH

    Gloria H.

    26 6 2016 17:24

    4       0

    Fascinating point about the USD and the precious metals moving in parallel as being one of the things to watch. Thanks Raoul and Grant for a clear synopsis. No empty prognostications, just some slear recommendations of what to watch for in the coming days. Well done.

  • NV

    Nicola V.

    26 6 2016 17:24

    1       0

    Good job gents! thanks for jumping on this topic...helpful indeed.

  • pg

    paul g.

    26 6 2016 17:13

    0       0

    just joined for trail..love it

  • MH

    Manuel H.

    26 6 2016 17:07

    1       0

    Thanks so much!!

  • MH

    Malcolm H.

    26 6 2016 16:59

    13       0

    Timely, useful and thoughtful. Thanks for giving up your Saturday.

  • AD

    Anthony D.

    26 6 2016 16:50

    6       1

    God Bless RV

  • WE

    William E.

    26 6 2016 16:41

    4       0

    I follow markets, asset classes, etc. because investment consulting is my business... But you guys and RVTV help me "knit together" seemingly discrete data into whole cloth for better understanding! Thank You!

  • WG

    Wayne G.

    26 6 2016 16:13

    50       0

    First rate! Interesting to see the interplay between R & G, the areas of agreement and divergence as well as your thought processes. You guys already provide the best financial programming on the planet so it makes me feel incredibly selfish to ask for more Raoul & Grant conversations; so call me selfish...more please.

  • PW

    Phil W.

    26 6 2016 15:40

    5       0

    Thank You! for the 30,000 ft point of view.

  • PN

    Paul N.

    26 6 2016 15:38

    2       0

    Agree. Watch the dollar. Brexit is potentially a huge monetary shock to the global economy. Some good charts at David Beckworth's blog http://macromarketmusings.blogspot.com/2016/06/brexit-biggest-global-monetary-shock.html

  • OM

    Omar M.

    26 6 2016 15:24

    4       0

    Excellent guys, Thank you!
    I can see the Gold bull in Euro's and Pound but still not convinced this move is just a temporary reaction to panic and then it sells off as dollar further accelerates
    More shall be played out... Great timing on this and keep up the great wor. U guys r the BEST!
    Cheers

  • NL

    Nikita L.

    26 6 2016 15:06

    9       0

    Hit the nail on the head again!!! Thanks Raoul and Grant! These are the type of things that me personally and I guess the rest of the subscribers want to see more often. THANKS AGAIN RVTV

  • MK

    Mark K.

    26 6 2016 14:53

    8       0

    Timing is the tough nut to figure out. For now expect more central bank liquidity, in one form or another, and I completely agree with Raoul that US rates are going to keep ticking lower. At some point the "reset" will come. We don't know when that is, but you will be glad to be long some gold when it happens! Thanks guys for taking some of your weekend to provide your thoughts!

  • bs

    bernard s.

    26 6 2016 14:32

    2       0

    excellent

  • TS

    Thomas S.

    26 6 2016 14:14

    17       0

    Thanks Guys! It is in these times where you need to take the emotion out and do careful analysis. Can't wait to here more. Banks are very interesting to me. Doesn't seem like any logical way they don't go way down much more given the fundamentals...might even push Australian Banks into reality.