During Friday’s bloodbath I heard a CNBC anchor lady assuring her (scant) remaining audience that Brexit wasn’t a big sweat. That’s because it is purportedly a political crisis, not a financial one.
Presumably in the rarified canyons of Wall Street, politics doesn’t matter much. After all, when things get desperate enough, Washington caves and does ‘whatever it takes’ to get the stock averages moving upward again.
Here’s a news flash. That’s all about to change.
The era of Bubble Finance was enabled by a political abdication nearly 50 years ago. But as Donald Trump rightly observed in the wake of Brexit, the voters are about to take back their governments, meaning that the financial elites of the world are in for a rude awakening.
To be sure, the apparent lesson of the first TARP vote when the bailout was rejected by the House in September 2008 was that politics didn’t matter so much.
Wall Street’s 800 point hissy fit was all it took to prostrate the politicians. Indeed, the presumptive free market party then domiciled in the White House quickly shed its Adam Smith neckties and forced the congressional rubes from the red states to walk the plank a second time in order to reverse the decision.
This post was published at David Stockmans Contra Corner by David Stockman ‘ June 27, 2016.
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