Well, the Brits have really done it now. All the experts told us people in the U.K. were smart enough to see that voting to leave the European Union was a mistake -- but not to worry because the referendum was going to lose. I once again must invoke the wisdom of screen writer William Goldman, who as regular readers will know summed up almost everything you need to know with the world's three most important words (no, not those words -- see Item 7 below).
That said, here's how I see it:
1. London, Get Used to It
It was a back and forth between New York and London in the bidding to be the capital of capitalism. That race just ended. This may be good for New York and Hong Kong in some abstract way, but more likely the center of European financial gravity will shift to Geneva or Brussels or Frankfurt; or maybe no one city replaces London and financial power is scattered all over Europe.
London’s ambition to be the world's most important city is now over. Expect it to become more like Colonial Williamsburg: A tourist trap that attempts to depict what life was like in the not-too-distant past.
2. Give Us Your Tourists
With the pound at 30-year lows and falling, the cost of taking a vacation in London has plummeted. Recall the mid-2000s, as the U.S. dollar was in the midst of a 40 percent decline -- the prices in the U.K. were insane. A reasonable and not luxurious hotel ran more than $1,200 a night, and I recall a decent burger was almost $40.
We are now at the opposite end of that currency trade: The pound has had its worst one-day fall ever, and versus the dollar it has returned to levels not seen since the 1980s. It makes me want to take a week off and go for a visit, while doing some bargain hunting. Many in Europe may feel the same.
3. Yes, Donald Trump Is Ecstatic -- For Now
There are two lines of thoughts on this: