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Finance: Keep calm and let’s talk Brexit

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PHUKET: The results of the Brexit vote have shocked markets almost as much as it has shocked the global and Brussels’ elites, with plenty of talk of impending doom and gloom for the UK and the markets. For example, the Morgan Stanley strategy team was quick to proclaim they expect European stocks to fall 15 to 20 per cent from their close on June 23, and that the British pound could collapse as well.

But before you start to panic, take a step back and ask yourself how many of the so-called ‘experts’ reacted to:

-The Fukushima nuclear power plant meltdown and the subsequent meltdown of the Nikkei Index?
-The repeated and dragged out Greek debt crises and bailouts that has created continued uncertainty for the EU and European markets?
-The various bird flu or swine flu epidemics that have repeatedly roiled Asian markets?
-The 9/11 terror attack, which actually shut down Wall Street?

Each and every time there were predictions of doom for the markets – only to see them remain intact or eventually recover. And, while the US economy is still feeling the lingering effects of the collapse of the housing bubble, US stock markets have recovered their losses and moved higher since the 2008-2009 financial crisis.

As for the Brexit, it won’t happen overnight. It will take years for the UK to untangle itself from the bureaucrats and politicians in Brussels. Until the UK does, it will still have to abide by EU laws, regulations, trade agreements and treaties, which means nothing has changed.

The UK also represents only around six per cent of the world’s GDP. So even if many of the doom and gloom claims made by the ‘remainers’ come true, it’s not going to have anywhere near as big an impact on the global economy or markets as the US housing bubble and subsequent collapse did.

More telling was the reaction of London versus European indexes. The FTSE 100 (INDEXFTSE: UKX) dropped immediately from its June 23 close at 6,334, to as low as 5,806 just after markets opened the next day, before bouncing back up to 6,138.69 – down 3.15 per cent. Keep in mind that back in January, the FTSE 100 bottomed with other markets at the 5,536 level.

On the other hand, Germany’s DAX (INDEXDB:DAX) sank from a June 23 close at 10,257, to open Friday morning at around 9,264 and then closed at 9,557– down 6.82 per cent. France’s CAC 40 (IN-DEXEURO:PX1) sank from a June 23 close at 4,461, to as low as 4,013 on Friday morning, and closed only modestly higher at 4,106 – down 8.04 per cent. In other words, despite what experts are saying, it seems investors think Brexit is going to be much worse or more painful for the EU than it will be for the UK.

In the short term (which may end up only being last week), the markets are going to get hit hard. However, I don’t see Brexit triggering some sort of global recession, unless January through February lows are broken, plus the US Fed, ECB and other Central Banks will liquefy the markets to try to quickly restore confidence. I personally own US stocks and funds (which will probably benefit from a flight to safety), but I have no direct exposure to Europe, the UK, or emerging market stocks or markets.

As for the EU, it’s in – and faces – a much bigger mess than the UK does with Brexit. Without tough love and discipline, two things the bureaucrats and politicians of Brussels have been (thus far) unwilling to practice, the EU may find itself slowly coming unglued by the rising and increasingly angry populist movements within its remaining members.

If Greece continues to fester and the migrant crisis goes on unabated, the UK leaving will look like the first passengers who boarded the Titanic’s lifeboats. While the EU ship may not yet be sinking, its clearly rudderless and listing hard under its own weight.

Don Freeman, BSME, is president of Freeman Capital Management, a registered investment adviser with the US Securities Exchange Commission (SEC), based in Phuket. He has over 15 years experience working with expatriates, specializing in portfolio management, US tax preparation, financial planning and UK pension transfers. Call for a free portfolio review. Don can be reached at 089-970 5795 or email at freemancapital@gmail.com.

— Don Freeman

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Governments & old media versus social media – who will win? | VIDEO

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Governments & old media versus social media – who will win? | VIDEO | The Thaiger

We look at the recent changes made by the Australian and Indian governments to except control over the world’s biggest social media platforms. India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social. There is now an open battle between the rise of social media platforms and the governments and ‘old’ media that have been able to maintain a certain level of control over the ‘message’ for the last century. Who will win?

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told. The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

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The social media giants in battle with ‘old’ media and world governments | VIDEO

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The social media giants in battle with ‘old’ media and world governments | VIDEO | The Thaiger

“The rules signal greater willingness by countries around the world to rein in big tech firms such as Google, Facebook and Twitter that the governments fear have become too powerful with little accountability.”

India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social.

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The companies are also being made to publish a compliance report each month with details about how many complaints they’ve received and the action they took.

They’ll also be required to remove ‘some’ types of content including “full or partial nudity,” any “sexual act” or “impersonations including morphed images”

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told.

The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

Keep in contact with The Thaiger by following our Facebook page.

Never miss out on future posts by following The Thaiger.

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Turbulence ahead for Thailand’s aviation industry | VIDEO

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Turbulence ahead for Thailand’s aviation industry | VIDEO | The Thaiger

When the airlines, in particular, were asking the government to put their hands in their pockets for some relief funding in August last year, it was genuinely thought that international tourists would be coming back for the high season in December and January. At the very least local tourists and expats would head back to the skies over the traditional holiday break. And surely the Chinese would be back for Chinese New Year?

As we know now, none of that happened. A resurge in cases started just south of Bangkok on December 20 last year, just before Christmas, kicking off another round of restrictions, pretty much killing off any possibility of a high season ‘bump’ for the tourist industry. Airlines slashed flights from their schedule, and hotels, which had dusted off their reception desks for the surge of tourists, shut their doors again.

Domestically, the hotel business saw 6 million room nights in the government’s latest stimulus campaign fully redeemed. But the air ticket quota of 2 million seats still has over 1.3 million seats unused. Local tourists mostly skipped flights and opted for destinations within driving distance of their homes.

As for international tourism… well that still seems months or years away, even now.

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