Brexit has become a crisis with a long tail and more than a twinge of buyers’ remorse.
As Sung Won Sohn of CSU Channel Islands pointed out in comments to the Business Times, the narrow EU exit vote victory was a boost for populism in the U.S. and elsewhere. It could lead to the disintegration of the United Kingdom if Scotland votes to rejoin the European Union in a couple of years.
On June 24, the British woke up poorer in terms of currency value, house and stock prices and many who voted to leave will lose their jobs as the economy shrinks. That is a form of madness without precedent — it will lead to political second guessing and confusion about how to negotiate an orderly exit from the EU.
It is also a revolt against over-regulation that will resonate right through to our November elections.
Closer to home, the Brexit vote will trigger a flight to U.S. assets that will make coastal California real estate very attractive. British vacationers, however, may not spend their winters on the West Coast. And companies in our region with a foothold in the UK — Deckers Outdoor, Haas Automation and Amgen to name three — may have to make some adjustments.
Among other side effects, the low interest rate policy of the Fed will be with us for a while longer. And the stock market has given up all of its June rally with little clarity about what’s next.
Many will wonder if the British vote might be rejected by parliament or set aside if the crisis worsens but that is unlikely for now.
In the meantime, most of us have little control over the events unfolding in London, Brussels and on Wall Street. With the pound sterling on the rocks, those overpriced hotel rooms in Mayfair and the West End suddenly look like bargains.
Maybe it’s better to leave the speculation to the pundits and take a vacation.
• Henry Dubroff is the editor and chairman of the Pacific Coast Business Times. Contact him at [email protected]