Stock Market: Is The Brexit Hysteria A New Collective Psychosis?

(Drivebycuriosity) - The global stock markets are under pressure - again. If we believe Bloomberg & Co. stocks have been falling recently because of the Brexit talk. On June 23rd the English will decide if they want to leave the European Union. Many politicians & pundits are using scare tactics. They claim that the exit would do great harm to the UK, the rest of Europe and the global economy.

I think that the Brexit scare on the stock markets is just another case of collective psychosis. Since spring 2009 the global economy has been recovering and stock markets have been climbing in spite of frequent attacks of mass hysteria:  The  Dubai crisis (2009), Iceland crisis (2009),  US government shut down (2013), Greece (2015), China hard landing (2015), collapsing oil prices (2015) and more. All these issues had temporarily caused turbulences on the stock market, but they couldn´t stop the bull market and the S&P 500, the gauge for the US stock market, gained about 200% since spring 2009.

It is quite understandable that at least a part of the English population wants to leave the European Union.  Brussel wants to decide about everything. Take for instance Commission Regulation (EC) No. 2257/94 of 16 September 1994 which is laying down quality standards for bananas, also known informally as bendy banana law. It is a European Union regulation specifying classification standards for bananas ( wikipedia ). According to EU law, the Brits cannot work for more than 48 hours a week, averaged over 17 weeks ( marketwatch ). And there is much more:  60% of the laws come from the EU in Brussels rather than from Parliament in London ( marketwatch.).

Many English also are concerned about the deluge of refugees who use the open gates of the European Community, a wave of sexual attacks in Cologne by muslim immigrants ( independent )  and the terror in Paris & Brussels.

The Brexit fears are overblown. 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?

 I reckon that the Brexit hysteria will soon be history like the many collective panic attacks before.