Merkel and Co. Take a Hard Line Stance Against Great Britain Post BREXIT

The totalitarian regime of the unelected EU, led by Germany (surprise, surprise) are taking a hardline against the UK, post BREXIT. They’re pissed at Cameron for allowing the people of Britain to vote on a referendum to leave the EU. And now they’re menacing them with economic punishment, chiding the UK to not ‘delude’ themselves into thinking it will be a seemless transition out of the EU. Merkel and co. intend to make it hard on the people of the U.K.

“There shouldn’t be the slightest misunderstanding about the conditions laid out in the European treaties for a case like this,” Merkel said in a speech to Germany’s parliament in Berlin on Tuesday. “My only advice to our British friends is: Don’t delude yourself about the necessary decisions that need to be taken.”

Merkel won applause from German lawmakers as she laid out her approach to the two-day summit of EU leaders in Brussels that will be dominated by Brexit and the political and economic fallout reverberating across Europe. As she spoke, a taste of things to come was on show in the European Parliament, where United Kingdom Independence Party leader Nigel Farage clashed with European Commission President Jean-Claude Juncker.

“Why are you here?” Juncker demanded, as he turned to look at the leading “Leave” campaigner. Farage hailed the result of last week’s vote as “seismic,” saying the U.K. “will not be the last member state to leave the European Union.”

“We will ensure the cherry-picking principle won’t apply in the negotiations,” Merkel said. “There must be — and there will be — a palpable difference between a country that wants to be part of the European Union and one that doesn’t.”

“The rest of the EU feel they bent over backwards to accommodate Cameron over the last months and he launched this reckless referendum and lost it, so the other EU states are in no mood to do him any favors,” said Mark Leonard, director of the European Council on Foreign Relations. “We don’t know how long he is going to be prime minister for, when a new government could begin to negotiate terms.”

In other news, the EU is forming an army, which will be spearheaded by (you guessed it) Germany.

Jim took off the bow tie and went straight to work today, figuring out methods by which to increase his net worth during a period of grave peril. In an interview done via Skype today (Jim does an interview with just about anyone), he predicted this recent BREXIT induced squall to be the very beginnings of a beautiful catastrophe. The City of London will be flogged about the gibbet and Scotland will declare independence, taking with them their kilts and oil money. Moreover, Jim said England would become Spain, something even the Spaniards take as an insult.

The money quote:

“This is going to be worse than any bear market you’ve seen in your lifetime,” he said on Yahoo Finance’s “Market Movers” program Monday. “2008 was bad because of debt. The debt all over the world is much, much higher now. Stocks in the US, for instance, have been going sideways for 18 months to 24 months. That’s called a distribution by many people. When you have distribution for a year and a half, it usually leads to bad things.”

This is bear p0rn, for you bearshitters out there, waiting up late nights–hoping for conflagration.

I know of many people who called the 2008 crash, but never profited from it. Wall Street is littered with such stories, fables of men who didn’t have it in them to see their visions through. Luckily for you, “The Fly” has a heart made from steel and granite, and a brain made from stone. I will not waiver, or flag, in this fight against freedom. Ultimately, this is what it’s all about, isn’t it? The very essence of our capital markets is one held prisoner to a command economy structure, one rife with orangutan styled manipulation.

Am I lying? (extra you’re part eggplant)

None of you really like the markets. Be honest with yourselves for a moment, maybe two. Sure, you might like a few companies that garner an emotional response, some stupid hamburger joint that you like, a flighty cosmetic product that you’re engendered to. But at the end of the day, like me, you hate this market. The very thought of central banks swooping into ‘save the day’ makes you want to detonate nuclear bombs over the NY Fed. Good thing you’re not a fucking terrorist in control of such a bomb, otherwise you might do it.

The point here is simple: eventually, all manipulations end. Humans are too scatter brained and eccentric to accept a rigid form of anything, let alone way of life. The idea of negative rates and/or zero interest rates for people who’ve saved money, eventually, will cause massive levels of resentment and pitched forked protests. The catamites who operate on behalf of the new world order aren’t prepared to deal with such discord.

I guess what I’m saying is, the bounce in futures now, 0.9% for the DAX, 0.6% for the SPY, is chicken feed. If you have a core thesis that extends past a few trading days, surrounded around the idea that this whole big ball of wax is set to unravel, you’d be a fool to buy stocks now–at the opening salvo of what could be the beginning of a substantial decline.

Stay true to who you are and follow your convictions. Hopefully, you’re not a moron idiot and know a thing or two about investing, otherwise keep reading these prophecies and take notes.

Asian markets are lower, led by Hong Kong–down 1.1% so far.

You should all take notice now and heed their CFA level 3 expertise.

I’m especially bemused by their gutsy calls to buy both FB and AMZN.

It was just Friday when Carter Braxton Worth made an impromptu visit to the CNBC studios, harried from his summering festivities in Nantucket, to warn the world to be fearful of the market, to not use the minor decline as a reason to buy more stocks. Today, after a few bloody marys, Braxton unveiled his checkered pants basket of stocks, which he feels is a buy down here, now that the market went down for two days. He even went as far to embarrass himself by drawing imaginary trend lines on stocks which have clearly broken, the fuck, down.

This is typical Wall Street marketeering, trying to have cake and eat it too. Carter is either unaware of his actions, perhaps distracted by his flailing golf swing, or is simply insane.

You decide.

Skynews is reporting that several major British banks have been informed of an imminent credit downgrade, post BREXIT.  Moreover, the forecast will be, inexorably, bleak, as Moody’s swashbuckles their outlook to ‘negative’.

If forced to guess, I’d say BCS, RBC, HSBC and LYG will endure the lion share of the post BREXIT wrath. As you can already see, the establishment is quite perturbed over these developments and endeavor to make this a very onerous experience for the Isle of Great Britain.

This is fairly boiler plate jargon by this tool at BofA/Merrill. Essentially, the UK is doomed for at least 3 quarters and the rest of the world is in for a very severe beat down, should any other freedom loving lads in Europe move to separate themselves from the fascist regime of the EU.

The billion dollar question is, which has been asked for hundreds of years during market spells, are these buying opportunities or a red flag for further pain to come?

FINANCIALS: LYG -32% RBS -32% BCS -32% GNW -21% PUK -21% LAZ -21% FDC -21% EVR -19% IVZ -19% CS -19% ING -18% VOYA -18% LINC -16% SAN -16% SCHW -16% DB -15% BASIC RESOURCES: WLL -28% HBM -19% AKS -19%  HUN -18% MT -17% ATI -17% OAS -17% CRZO -17% EPE -16% CF -16% BTE -15.5% SM -15% CONSUMER GOODS: BWA -20% KS -20% TEN -17% LEA -16.5% COT -16.5% PVH -16% AXL -16% THRM -16% OI -15.8% WBC -15.7% FCAU -15.5% DLPH -15.3% TSE -15.2% DAN -15.1% HEALTHCARE: EBS -30% ACAD -19% AGIO -18% VRX -17% PRTA -17% INDUSTRIAL GOODS: ATU -20% X -17% RXN -16% TGI -15.7% MCRN -15.3%  SERVICES: LBTYA -22% MAN -20% GWR -18% XPO -17% AER -17% KFY -15.7% TECHNOLOGY: AV -25% GSAT -20% BT -20% IPHI -18.5% TI -17.6% YY -17.5% ACIA -16.2% ANET -16%

Having fun yet?

The cheery folks out of both Morgan Stanley and UBS are telling clients to fear the end of the BREXIT blade, for comes with it is an undeniable storm that is bound to rip credit markets to pieces. They’re talking corporate credit here, the type of sordid horseshit that almost tipped over in February of this year–only to revive with the uptick in crude.

“Despite the urge to step in and buy U.S. credit at modestly wider levels than a few days ago, we recommend patience,” Morgan Stanley strategists led by Adam Richmond wrote in a note to clients Monday. “While the full impact of the U.K. leave may not be known for some time, the U.S. economy is not in a position to withstand a large shock.”

High yield debt has been widening–because they truly do suck. More than that, the vast majority of it is in the basic resource space–a sector of the market which has enjoyed the lionshare of gains since the March lows.

According to Exodus, there is upwards of $150 billion in distressed basic resource debt. But right behind it is another $450 billion, which will become distressed should their share prices continue to slide. In other words, the BREXIT issue, although concerning, pales in comparison to the type of ripple effect a large scale credit event in the oil and gas space could impose.

UBS’s Stephen Caprio is advising investors to resist deploying new cash to buy bonds on the cheap for now as Brexit increased the likelihood of a U.S. recession to 34 percent. That along with a stronger U.S. dollar, low oil prices and banking sector stress could upend vulnerable credit markets. In that case some high-yield and investment-grade companies may struggle to access debt markets, according to UBS.

“We do not believe investors should be buying Friday’s dip in credit yet,” Caprio wrote in a note to clients. “It is not often that an exogenous shock has hit so late in the credit cycle with central banks already at the zero bound.”

The U.S. economy and company creditworthiness are already weak enough that it may not take much to spark a deeper sell-off in corporate bonds, according to Morgan Stanley’s Richmond.

There were signs economic risks were rising even before the Brexit vote: U.S. corporate profits are down 15.5 percent from a peak in the fall of 2014 and business investment has deteriorated, Richmond wrote.

What’s more, companies — even large blue-chips — are about the least creditworthy they’ve ever been as they’ve borrowed rampantly in the face of weak earnings, according to Morgan Stanley.

“A catalyst is here,” Richmond wrote. “The worry that global growth is weakening and central banks can’t do much about it, which was prevalent earlier this year, won’t be far behind.”

There you have it, folks. The BREXIT vote has created an environment that is onerous to the increase of crude prices. In turn, there is an increased likelihood of a large scale credit event in the oil and gas space, one that is teetering on the brink of destruction. Should this occur, a recession is all but a forgone conclusion.

I haven’t even mentioned China in this post, something we’ll leave for another article.

If you tried to be more condescending than Mssr. Moritz Kraemer, Chief Sovereign Ratings Officers at S&P, you could not. In a somewhat high strung interview, with the BBG hosts hammering Moritz for the reasoning behind the downgrade, the S&P company made one thing indelibly clear: they are in the business of affecting political change via pressuring governments to bend the knee to their will–which is the same as the globalist, oligarch, elite.

S&P cut the UK two notches to AA, citing political uncertainty and an increased funding risk for British institutions, because of BREXIT.

Listen to the tone and tenor of this empty vessel. The EU has every intention of being punitive to the UK, punishing them for not agreeing to be their subject.

I found it ironic that the chief sovereign ratings officer happened to be a German national. This downgrade, like the one given to the US, is pure politics.