Stock Markets: Brexit? What Brexit?

(Drivebycuriosity) -  If you believe the media & the pundits, then the Brexit will drive the world into a new recession. But the global stock markets think otherwise.

Above you can see the chart the FTSE 100, the gauge for the British stock market in London. After a sharp & hysterical response in the early minutes of Friday 24th, the day after the vote, the index more than recovered.   "The FTSE 100 has recorded its best weekly performance since December 2011", reports the Guardian ( theguardian ).

Wall Street shrugged as well. Above the chart of the SP 500, the gauge of the US stock market. The SP 500 had the best week in this year so far ( bloomberg. ).

The stock markets show that the hysteria in the media is unjustified. The British economy will be better off when they leave the European Union (EU). Brussel has been gaining more and more power over the years - developing the EU Union into something like the defunct Soviet Union, a bundle of states ruled by a central government. The European Parliament and the EU committee, especially Jean-Claude Juncker, the President of the European Commission, treat the EU increasingly like a kingdom. Even after the Brexit decision they want to expand the power of the EU and demand more integration, meaning more power for Brussels ( spiegel.de).

UK will benefit from the exit because it will be less regulated. A liberal (less regulated) England could attract companies and investors from all over the world. The economy blogger Scott Grannis writes "one of the very good things that could come of a Brexit: shaking off the Eurosklerosis  that has held back growth in the Eurozone for many years" ( scottgrannis ).

Small countries can prosper even when they are not part of a big union: Switzerland and Norway aren`t member of the European Community - and both countries are doing well. People worldwide are buying Swiss products & services and don´t care whether the country is part of an union or not.  If you need more examples for small independent countries who are prospering, you might take a look on the history of Singapore & Hong Kong. It is highly unlikely that the rest of the world will curb trade with England and invest less there if the country is on her own. Companies are doing business with the island because they are making profits there. Why should they give up these profits?

London will stay one of the leading global financial centers. Frankfurt is not an alternative because the town is too small & too provincial. Paris is the capital of a bureaucratic, over-regulated & xenophobe country with an anti-corporation tradition  (ask the French what they think about the English, the Americans and the Germans, look how the government treads foreign big companies). The global finance business will still need an alternative to Wall Street & New York and doesn´t want to be too influenced by the US policy & Washington DC. London could even be a winner when the financial center is not anymore controlled by Brussels. Even the management of HSBC, a bank which was founded in Hong Kong with most of the business in overseas, declared to want to stay in London ( ft.com).

UK will continue to prosper, maybe better than before.