Tumbling Tuesday – Markets Wake Up to Realize Risks

ROFL!  

It is so funny to see all the chickens we've been warning about come home to roost – especially when it happens WHEN we thought it would.  As noted in our July Portfolio Review, we are well-positioned for a downturn, having just boosted our hedges during last week's "rally" and already this morning we're glad we did as the Dow is looking at a 100-point drop at the open which is NOTHING compared to Europe's 1.5% decline into lunch.  

As you can see from the chart (despite it's awful choices of key colors), the Brexit dominoes are lining up already and the worst thing that can happen to the EU is for the UK to emerge from their exit with their economy intact.  Fortunately for them, that doesn't seem to be a problem at the moment as economic confidence in the UK has fallen off a cliff as the Top 10%'ers who were betting a Brexit would never happen are now scrambling to cover their mistaken bets. 

And I don't mean at the bookmakers, I mean the bets they made with their company's futures, hiring plans, capital allocation strategies, loan and investment portfolios – these idiots have been living in a bubble and that bubble has just popped all around them and now the Top 10% all over Europe have to wake up to the reality that the Proletariat still have a bit of power and are willing to use it – no matter how much you try to cower them into submission. 

Nigel Farage has now joined Boris Johnson in stepping down now that they've won the UK vote and we had a discussion in our weekend chat as to whether it's a noble thing that shows they weren't in it for political gain or whether they just grabbed the wheel on the Titanic, steered it into an iceberg and are now grabbing the first lifeboat off the ship.

Morgan Stanley is assuring us that "Brexit is not a systemic risk" and the fact that they have to say that should terrify you.  As I pointed out to our Members, people don't say "Remain calm, all is well" when things are
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