Will Brexit Happen? We Could Know By the End of the Day
Political developments out of the United Kingdom are frothing out faster than radiation out of a quasar as Brexit news reaches a fever pitch with everything happening all at once now. Parliament is back in session today and it will try to force Prime Minister Boris Johnson to request an extension to Brexit from the European Union beyond October 31st to January 31st. Johnson has countered saying that any Tory member who supports such legislation will be ineligible to run in the party in the next elections, and if the legislation passes, he would call snap elections for October 14th, the date that Parliament will be back in session from its proroguation, set by Queen Elizabeth II who will deliver a speech that day at the tender young age of 93 to reopen Parliament. Johnson has also said that even if the legislation passes, he would ignore it anyway, making Remainers really incredibly angry with calls about the death of democracy in Britain. Ironically, Johnson is the one trying to uphold the purely democratic Brexit referendum from way back in 2016, while being berated about being a threat to democracy.
Anyway, if Johnson loses the vote, Britain goes to elections, which will basically function as a second referendum. If Johnson is elected, he’ll have two weeks to make a deal or go on with a hard break. If he loses, Brexit will most likely be cancelled, a triumph for democracy, if you’re a Remainer and you lost the referendum at least.
And the pound (NYSEARCA:FXB) is crashing to record lows in the meantime, having just broken the $1.20 level this morning for the first time ever.
China Threatens Invasion, Hong Kong Leader Weary, Yuan Falls, Tariffs Rise
China is threatening to invade Hong Kong in a move that would almost certainly intensify the ongoing trade war between Washington and Beijing, hinting that the “end is near” for Hong Kong protesters. Munitions are still stockpiled at the border between Hong Kong and China. Meanwhile, Hong Kong’s Chief Executive Carrie Lam is getting war weary and wants to resign. “If I have a choice,” she said, speaking in English, “the first thing is to quit, having made a deep apology.”
We weren’t supposed to know that, the meeting being behind closed doors, so she had to walk back the comments and say she never said them, knowing she could get into real trouble with her lackeys in Beijing. But the cat is out of the bag now and she wants out. These are now the biggest protests that China has seen since Tiananmen Square in 1989, which ended with thousands of People being massacred by the People’s Government, for the sake of the People. As this is happening, the Yuan (NYSEARCA:CNY) has also fallen to a fresh low of 7.1842, not seen since 2007. On the trade front, tariffs were already jacked up as of September 1. And China is threatening to sue the US in WTO court. (Everything is totally under control.)
Argentina Imposes Capital Controls Amid Currency Collapse
Speaking of currencies weakening, here we go in Argentina again. The country has decided to impose capital controls to try to stop the collapse of the Argentine peso, which has fallen 35% against the US dollar (NYSEARCA:UUP) since July 23rd, but curiously has fallen an even harder 50% against gold (NYSEARCA:GLD) over the same time frame. The issue is that a new government was elected on the promise of blowing up austerity agreements reached with the International Monetary Fund prior to the perennially bankrupt country’s latest bailout. Seeing that the country has no more money and that political promises don’t quite yield actual stuff out of nothing, investors are fleeing the peso, causing its collapse. Why would the peso fall even faster against gold though? It would make sense in the context of capital controls, if it becomes hard to buy US dollars because the central bank is limiting purchases of foreign currency, but still allowing the purchase of precious metals, or at least not making it as hard to buy gold as to buy forex. On the bright side, the IMF doesn’t look so spiffy anymore, so there’s that.
Dorian Takes Its Time Pummeling Bahamas
Hurricane Dorian, trying to copy the chaos happening around the world, unofficially became the fattest, laziest, slowest moving hurricane ever over the weekend. It is taking its precious time sitting over the Bahamas barely moving forward and pummeling it beyond recognition. The crawling at literally a snail’s pace west, but the silver lining in the hurricane cloud is that since it isn’t moving, it can’t suck up more heat from new water and so the storm is slightly weakening. That isn’t making it any better for the Bahamas of course, as they’d rather the storm move on somewhere else. Assuming it doesn’t stay over the Bahamas indefinitely, it will eventually hit the eastern Florida coast in at least some capacity and then move up the eastern seaboard from there. Watch the price of gasoline (NYSEARCA:UGA) over the next few days and weeks. If the storm makes a direct hit on Florida and up the coast, gas prices should move higher.
Whirlpool Recalls Stovetops That Turn On At Random
In slightly less exciting news for a bit of a change of pace, Whirlpool (NYSE:WHR) is recalling 26,300 glass stovetops. Their crime? They turn themselves on at random for no apparent reason, which could be bad if you’re not so much into burning down real estate and endangering people’s lives. The decision to execute a recall came after 133 separate reports of stoves turning on by themselves. Of the 133 reports, there were 14 incidents of heat damage, four reports of items catching fire, and two minor burn injuries. So it looks like Whirlpool may have nipped this one in the bud before it turned into a whirlpool of a mess. The recall notice advised customers to turn off the circuit breakers powering the unit, and refrain from leaving anything on the stove, for obvious reasons. Still, you have to write these things down in notices these days.