June 24, 2016 – The decision by the U.K. to leave the European Union after 43 years caught global investors off-guard. On Thursday the stock market had a nice pre-Brexit-vote rally amid expectations that Britain would vote to stay. The pound crept up to its highest level this year. After the vote results released overnight with Brexit winning 51.9% vs 48.1%, financial markets everywhere plunged. At the time of writing, the S&P 500 was down 2.71%, the Dow dropped 2.61% and the Nasdaq lost 3.22%.
The Brexit vote is yet another example of the prevailing angry mood here and around the world. The prosperity leading up to 2008 and the ensuing collapse created the conditions for a revolt. Until either more time passes or those left behind regain their prior economic success, we should expect seemingly unsound political results like Brexit to occur as reflections of their anger.