E Disunited Kingdom

Global markets are in convulsion after the surprisingly strong UK vote to leave the European Union. Wall Street shares opened down 2-4 percent, while markets in the Disunited Kingdom went into free-fall, down nearly 9%. The Euro stoxx 50 index dropped by double digits before recovering.

Sterling at one point hit a 30-year low down 11% to $1.3224 but there were plenty of fluctuations back up again subsequently. Seeking shelter, investors bought UK bonds, pushing interest rates down to 1.02%, vs 1.37% yesterday. US Treasury bonds also jumped slashing the yield on the 10-year note to 2.47% from 1.67$ yesterday. German 10-year bunds fell to a new low of minus 0.18% overnight. Hardest hit were banks which have to deal with the chaos which followed the referendum results and the London Stock Exchange's own shares, down over 12% on deal uncertainty on the planned merger of the London and German stock exchange. Also hard hit were bookies which had been offering good payoffs for Brexit based on misleading recent polls.

Will Britons take to drink to solace themselves for a bad outcome and to celebrate a good one? The pub indicator was confused. Fuller was up 2.5% while Wetherspoon (JDWPY) fell 7%.

The politics were also dreadful. PM David Cameron resigned. Scottish nationalists demanded another referendum to let them vote themselves out of the United Kingdom since Scotland had voted overwhelmingly for “bremain”. Sinn Fein in Ireland demanded that Northern Ireland be reunified with the Irish Republic which is in the EU. Spain demanded sovereignty over Gibraltar.

Right-wing parties in France, Poland, Hungary, and the Netherlands, demanded referendums on Frexit, Polexit, Hexit, and Nexit. The Brexit vote provides ammunition for isolationist (and often anti-Semitic and anti-Mjuslim) campaigns and candidates across Europe. This could be the start of the whole EU imploding over broader social issues.

As a politician with funny blond hair, Boris Johnson, who led the Conservative anti-EU block which won the referendum prepares to demand the premiership, another pol with funny blond hair, Donald Trump, is also likely to gain from echoes of a vote that was largely anti-foreigner.

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