At the end of this historic week, the "what's next" headlines are piling up from Australia to Malaysia to Buenos Aires to New York to Germany to New England and, of course, to jolly Old England. In other words, everywhere you look.
That's the funny thing about unpredictable events: The more unpredictable they are, the more we all seem to crave some sort of prediction.
So here's my humble prediction about what's next: A bunch of failed predictions about what's next.
It's sort of like the paradox of big data that's unfolding: The bigger it gets, the harder it seems to be to wrap our arms around it and crunch it in any predictive way. So traders and pundits crunched everything from opinion polls to bookmaker odds to allegedly secret voter polls paid for by hedge funds to not-so-secret polls of hedge funds themselves to the signals being sent by the market itself.
Did someone get it right? Sure. There's famous pound shorter George Soros. And probably someone else. Somewhere. Probably on their way to a beach in the Hamptons or Cannes or wherever right now to enjoy this lovely Friday.
But the nasty puking sounds being heard throughout the global markets indicate that so, so many got it so, so wrong. The bulk of the number crunching, it turns out, ended up being about as nutritionally satisfying as we'd expect from crunching on Burger King's new Mac 'n Cheetos.
When genius failed this time, it had plenty of company.
But there are a few images from crystal balls that have captured my gaze, so I'll just leave them here for you to ponder.
"Buy the dip" is the mantra I heard repeatedly Friday morning, at least for U.S. equity markets, so I might as well retweet it here with the standard caveat that retweets do not necessarily equal endorsements. UBS strategist Julian Emanuel makes the case that investors were "over-hedged" leading into the referendum and that the unwinding of those protections could cushion U.S. equities. So will, in his estimation, the facts that S&P 500 companies derive less than 3 percent of their revenue from the U.K., that the Federal Reserve will be hesitant to remove any more punch from the punchbowl and that the funk in corporate earnings is likely to subside.
So if you're looking to remain in the bull union, Julian's your guy. If you vote to exit, at least in Europe, Goldman Sachs's chief global equity strategist Peter Oppenheimer advises that a rise in the equity risk premium by an amount similar to previous "major risk episodes" would send pan-European benchmark indexes down 19 to 21 percent.
From the cheap seats here, I like the advice from hedge fund consultant Milton Berg, who has advised being flat for a couple weeks now and advises to continue to do so -- don't try short the weakness or buy the dip until the dust settles -- as unsatisfying as it is to be stuck on the sidelines.
In other "what's next" takes, I'm biased toward my Gadfly brother from another mother, Lionel Laurent, who points out the slim but intriguing chance that the bloodbath in markets could increase the chances of Britain deciding to take a mulligan on this vote and stay in the EU: "Call it a second clash between will of the market and the will of the people. But in the rematch, the result may be different." This chance of a mulligan is also buttressed by the fact that Britons are "frantically Googling" what exactly the EU is, now that they've voted to leave it.
I'm also intrigued by the growing speculation that Britain's departure from the EU will be the final catalyst needed to load up the central bank choppers with some "helicopter money."
The notion of helicopter money dates back to economist Milton Friedman in the 1960s, and the cash being dropped from the air is meant to be a metaphor for central banks printing money to give to citizens to stimulate the economy. This is to distinguish it from quantitative easing, which is when the helicopters land on the roofs of the skyscrapers in the world's financial capitals and bags of money are simply delivered to those who need it most: bond traders.
Asked in the predawn hours in London about the prospects for helicopter money, Manulife Asset Management economist Megan Greene told Bloomberg Television: "I've always thought the Bank of Japan would be the first to to actually invoke helicopter money. I now think the U.K. will be."
What are the odds of helicopter copter money being unleashed? I would guess it's a long shot. Maybe the good folks at Ladbrokes and Paddy Power will offer a helpful betting line on it soon. In the meantime, the Trade of the Week is clearly buying a net just in case.
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