The UK Elections, What Traders Need To Know
It's another election, it seems like we can't ever get enough of the polls here in the UK, well that's a little bit unfair, us Brits don't like voting. At one point I recall letters through my door threatening a £1,000 fine if I did not exercise my civic duty for Queen and country... Anyway, in truth no one was going to enforce it, so it was just scare tactics.
Talking about scare tactics.... There seems to be a lot of that going around from running commentary in social media to the major news outlets, I am convinced that after the December the 12th, I should be prepping the underground bunker....Remember the movie 10 Cloverfield Lane? That's definitely the vibe I am getting. On a serious note the world is definitely not going to end on the note that Jeremy Corbyn or Boris Johnson will emerge victorious, after all Boris is already in office and has been for 100 days and the country is still rotting from the inside. This has not changed the fact that the Pound has rallied significantly from its 1.20 lows or that the FTSE is trading at 7400 index after a massive two day rally, so again I ask, where are those monsters?
A scene from 10 Cloverfield Lane
Okay! Okay! There are some concerns about the election.... What can I say? Jeremy is a communist, whoops! Socialist I mean and yes he does want to nationalise our rail, energy and local services and yes he does want to tax Google, Facebook and Amazon and yes he does want to tax the top 5% of earners but we already knew that because that's socialism and yes it is a concern if you are a capitalist. I can already here your thoughts, so you think you are a capitalist do you? Well, I have news for you... You are definitely not a capitalist. Do you have a day job? Are you dreaming about hitting a home run as a trader? Is your PnL a big fat negative? Then you are not a capitalist, you are a wannabe capitalist because good old Maggie in the 80's coined the term "aspirational" if there is such a thing, everybody from there and back again thinks they are Paul Tudor Jones, yeah! A real capitalist, so here we are in this United kingdom getting all weepy eyed about socialism. So there you have it.... Just my two cents on the matter.
I have thrown my tantrum, water under the bridge... So what do traders (wannabe capitalists) need to know about the vote? Well, the Cons have the majority, the Brexit party have agreed not to stand against them even though they have no seats, Labour is 55 or so seats shy of the majority but are planning the next Reformation, the SNP have 35 seats they have pledged to Labour, the Lib Dems have 20 but they think they can win the election and... Oh! Donald Trump thinks Nigel and Boris will make a good team.... This is the state of British politics. So our wannabe capitalists should know that the markets will not pause due to one simple equation, no matter who wins this mad election QE must go on.
This means more money printing as stocks soar and other asset bubbles swell even further, so in the long run expect heavy inflation higher interest rates and more political confusion as the Brexit cat gets kicked further down the road, Yes it's a damn 'cat' I said. Till then, Don't place your bets! You will lose your shirt in this crazy no volatility environment.