As I write this, the exit polls are suggesting the result of the UK election will be a hung parliament.
That is to say, for non-UK readers, there will not be a majority in the British legislative house to automatically push through laws the leading party wants to enact.
The law that needs to be enacted and has paralyzed the UK is the Brexit agreement with the EU and it has driven politics to the borders of nervous breakdown in 2019. Many established politicians have thrown in the towel and quit, so bad has the deadlock become.
So a hung parliament is a terrible outcome because the UK is likely back to the horrible political and economic deadlock of 2019 and this situation will roll and roll again, sucking the life out of the British and their government.
It also means that ‘Dead-Brexit’ is on again. The institutional EU Remainers will rise from their recently dug graves and reattempt to reverse the Brexit referendum. This time it is highly likely they will get their way.
The what-ifs now are almost uncalculatable.
For sure the pound will crater and the London stock market will slump at the thought of more interminable governmental and economic constipation.
It will take months to get to a Brexit or a second referendum and those months will be ghastly for the economy, the polity and for British morale.
Another 6 month to a year of Brexit conniptions can not possibly work out well.
Dead Brexit or Brexit are preferable to yet more interminable Brexit crisis.
So tomorrow unless there is a ‘plunge team’ in place, the markets are going to go into spasm. Lets hope the Trump election night magic, where the Dow futures tanked the best part of 1000 points on the news Trump was likely to win, only to come magically roaring back to par.
This hung parliament is really a terrible outcome for the markets and sadly I’m not likely to be wrong about this negative impact.
Look out below.
So lets look on the bright side. If the market crashes we will great a great buying opportunity. That’s about as positive as I can get in the circumstances.
Don’t forget to buy this crash, but also remember to proceed slowly. Buy on the last leg of the W wave not the initial drop.
A fragile minority government is not going to settle matters quickly so there is unlikely to be a V shaped market bottom and a classic W shaped bottom will give plenty of time to enter the market at or near lows.
Unless the exit polls are wrong and they’ve been right several election in a row, we are in for a rough ride.