That final tally 52 votes to leave, 48 to stay. David cameron was on the wrong side of that outcome and he announced hell step down as Prime Minister by october. The british people have made a very clear decision to take a different path. And as such, i think the country requires fresh leadership to take it in this direction. I will do everything i can as Prime Minister to steady the ship over the coming weeks and months, but i do not think it would be right for me to try to be the captain that steers our country to its next destination. On the flip side uk independent leader nigel farag jubilant. Dare to dream that the dawn is breaking on independented United Kingdom. Let june 23rd go down in our history as our Independence Day [ cheers and applause ] obviously very big questions, jim, being asked about globalism and nationalism, but on a shortterm basis, on a today basis, do you go shopping . Well, look, theres a couple things we have to keep track of down 7 , we get the trading halt 15 minutes, that could scare people given the fact we think of trading halts in the face of china. That would be about 1965. Okay. Remember we were down on february 11th. We hit the low of these could be in play. The way i look at these things and i know its characterized buy on a dip, completely wrong. Im not saying buy on a dip. Im saying theres a hunt for yield that will go on and the market will be bifurcated. The companies that yield 3. 5 right now that yield 4. 5 that have been unattractive and these are typically dominion power kind of thing suddenly come in to play is where you might want to be. We still have to compare bonds to stocks. We have to believe that we are in an even lower permanent yield given our currency is going to be a bit of a magnet. Stop thinking about the yen as some sort of safe haven. Were the best house in a really bad neighborhood. Do you want to occupy that house day one . Maybe a little. Maybe move into the living room. Maybe a tiny bit. By the way, on Market Conditions i can tell you having spoken with many people this morning, liquiditys been fine, it was fine overnight. In europe its been okay on the credit side, so thats important. Were going to obviously start off here in the equities with large volume but liquidity expected to be strong there. The bigger issues are the ones you sort of touched on there, jim, which are longer lower for longer on rates. The stronger dollar, what is going to be the impact on our companies here and macro level what is it going to mean for the likes of china if it continues for some time . Will they be forced to devalue down the road . Will capital flight begin again in that country . Seemingly it had abated over the last few months. Questions of course about the european banks are key. Their market caps are so small but Balance Sheets very large. Most people im speaking to do not believe theres going to be any sort of contagion that the ecb will handle it. Theyre going to be out there buying all sorts of stuff including a lot of Corporate Bonds. Right. But that is a concern right now. Of course the idea of a recession in the uk and the slow growth that weve become so accustom to overall in europe certainly expected to continue if not get worse. Whats that going to mean for the banks . Youve seen their stocks right now. Thats got to be one part of this story. Im talking Deutsche Bank, barclays, lloyds. As were speaking the bbc reports that Morgan Stanley has begun the process of moving 2,000 Investment Bankers and banking staff to dublin or frankfurt. Well, you have to. Anyone whos ever tried to do business overseas its almost like, listen, if youre in a country where they dont have reciprocation, you have nothing. Put it like this, i try to buy some property in mexico, city is really huge in mexico, one of its divisions. You cannot use city to buy anything in mexico. Right. So think of it like that. Say you think i see a citi office in cairo or these are very different institutions. Yeah. It makes sense for Morgan Stanley to do that if only just because if you were buying property in europe and you had a Morgan Stanley, you may not be able to do it any more than we can use citi to buy something overseas where it looks like citi but it isnt. When it comes to the banks here you can see all down sharply as we havent started trading yet. Of course the rate environment is not good for them at all. 1. 5 on the tenyear, not to mention theyre still enemy number one. Even after the yeah, it does seem to be the case, certainly over there and over here to a certain extent. But, guys, the idea of uncertainty being introduced for a longer period of time, i mean, there may be shortterm responses, Morgan Stanley may be moving some people now. But figuring this out is going to take quite some time. The concern about the eu and whether its going to be able to continue in its current form or some way, the euro, the idea all of it is coming into question. Those are questions that are not going to be answered day one, day two, week one, week two, not to mention its going to take the uk two years just to disentangle itself. Article 50 is not even launched. Johnson this morning trying to like calm everybody down. Well, i saw where the euro was, and i say, guys i mean, were not most of our viewers arent sitting here trading currencies. Sarah will be talking currency, but i think that the euro is still way too high versus where it could be. You do . Just because, i mean, if youre going to talk about the idea like ive heard many people talk about this morning whos next. Im not going to play the whos next game because i dont know and theres a lot of consequences to leaving the eu for the countries in europe. But if youre going to play that game, do you want to be long euro while youre playing it . That brings to mind scotland for instance, which voted to remain 62 38. And now theyre saying, look, the fact we have to leave the eu against our will is unacceptable. And we may try for a second independence vote. Theres like theres chapter one. Eu, i mean, there are things about theyre a la carte. They do have their own currency to begin with. Its a lot more difficult to disentang disentangle, remember talking about the drachma and the problems of the drachma . Its just not that easy. European justice cant overturn british laws. Cant forget that. Britain always had that. So britain, it always had one foot out the door to begin with. So it was easier for that second foot to come out. Yeah. But there are other signs when i look at barclays, lloyds, look at these stocks they take your breath away because that remind you of another era in our country. But are the stocks representative . Well, that has to do, david, with the Balance Sheets. Well, their Balance Sheets are huge but market caps are tiny, which is interesting. Yes. I want to get some specific stats on that, but this doesnt help them, jim. Theyre going to certainly have to try to figure out what their business looks like in this new world and its going to take quite some time to do that. I havent spoken to anybody who seems particularly concerned at this point about contagion, but at the same time when you see stocks down 20 , and when you have the worries about a recession, its concerning. Oh, no, look, im not look, theres two ways to approach it. Theres the way to say, look, theres guys, trucks outside right now from all the major media operations. It must be scary. But when you see those it tends to be closer to a bottom. Though theyre reacting very quickly. And also we have to differentiate between here and there. Yes. Because look, do i want to pull the trigger this morning on buying j. P. Morgan . He bought it where did jamie dimon buy, low 50s, maybe i wait. What about a drug stock though . Something with a nice 3 or 4 yield. By the way uk stocks are many up this morning. Unilever. In part because of their yields and earnings are going to look good because theyre in pounds. Though of course if you own them in dollars youre going to get hurt on the conversion. Trust glaxo more than astrazeneca. Inbev had a good quarter. I think one of the big problems we have you know, i was out west, the rally we had this week was so humongous in all the stocks that we just talked about. It was a monster rally in the face of reporting an okay quarter, red hat okay quarter, lennar quarter people didnt really care that much. If you take a look at the weak at what reported, we didnt have anybody that was good other than kb homes. You know, i just think we have to remember that the earnings backdrop this week was subpar to begin with. The idea the combination of dont buy any of the bookie stocks by the way in europe, 71 last night. Oh, man. You take a look at what went up this week versus the earnings that weve had this week and you look at a ford motor, 16 uk, spent a lot of time with mark field talking about a driverless car, i dont want to be in a driverless stock. But penske motors, then utility, pra health and then you get to ford. We dont have a lot in the uk. But i know when i look at the stocks bcs of you know, royal bank. Right. I look at those stocks and say can a stock price cause something thats an event . And i would point out that do you think that the central bankers havent thought about it this time . Im not going to say theyre going to prop it up. Im going to say they can provide liquidity. Liquidity at home by the way is a core four. There is plenty of liquidity. Ecb is buying bonds of all kinds most likely. And corporate borrowing rates by the way are getting even lower than they were given how rates are moving. How about individual borrowing rates . Thats the question, is anybody going to be able to borrow at all . See the problem is i think youre going to see another cessation in their growth. They were just starting to get going. Recession you mean. Banks unwillingness to lend to people. Yes. And open up that Balance Sheet for germany. The German Government right now. They say we need to do 100 billion public works right now to put these people to work because this was a societal decision by the uk. They didnt want these people coming. And weve got them, and lets just make it so its not its more palatable to those who were not migrants. Of course. Not that had big turkish migrants when they didnt have enough workers before and that worked in germany, but just be aware theres societal things at play here. The boe saying it has 250 billion pounds in liquidity ready to go. The fed has a statement out now saying theyre carefully monitoring developments in Global Markets in cooperation with other banks. They say theyre prepared to provide dollar liquidity through existing swap lines. The nyse says the premarket trading has been higher than usual, but all systems operating normally and that theyre prepared for the market open. Heres the kind of thing im talking about, home depot, which is all domestic. Im using that add a paradigm. Home depot at 113 on february 11th, its at 128. I cant tell you, carl, i want you to buy home depot at the opening because it was at 113 back then. The dax is only back to last tuesday. Thats how much weve added in the ten sessions or so. I just look at where things were when i left to go out west. Say you cant go buy them when we thought it was 50 50. Yes. Lets get to london and see what the picture looks like from there. Sarah eisen of course has been covering this story from the beginning. Good morning, sarah. Reporter good morning, carl, jim and david. Just wanted to offer a little color about what a dramatic 24 hours it has been in the markets. Currency traders, you heard all the reports, were ready for action, they were fully staffed overnight here in london. And, boy, was that a good thing. Because before some of the british voters went to bed, the british pound was all the way up to 1. 50 making new highs for the year against the u. S. Dollar, and then after the results started coming out showing that it was looking like britain would vote out of the eu, it plunged all the way down to just above 1. 32. This is a move like we have never seen. It is a record move lower for the british pound, even bigger than black wednesday which some may remember that was back in 1992 when george soros and other speculators sold the pound. Soros made 1 billion known as breaking the bank of england. He had weighed in before this vote saying if britain does vote to leave the pound could fall as much as 20 . Havent quite gotten there, but we did reach levels we hadnt seen since 1985. Theyve rebounded and the word from the trading desk as david sort of alluded to, no liquidity problems, everything was orderly. It was more seen as just a readjustment because it was totally not priced in. And now the readjustment on the british economy that it could get ugly, potentially even drop into recession this year that the bank of england will not be raising Interest Rates to fight higher inflation and could make its job a little bit harder. Just another sense of the craziness overnight, carl, we did see the Swiss National bank intervene, step in to sell its currency because that is a classic safe haven. The swiss franc, japanese yen and gold also soaring overnight back to 2014 levels. David blum told us hes going with gold because you cant fight a central bank, you cant intervene in gold if you want a little safety today. Gold at a twoyear high, the biggest rally for gold, sarah, since the financial crisis. And those miners, jim rand gold is the fastest grower for those who want to play that game. Buy the ones that are most levered. But if you want to buy growth gold its rainbow. Youve said this how many times . 50 times because its up 50 points, is that what youre saying . I happen to love mine where the gold is and thats been the right one. Six firms have downgraded in the last six weeks. Rand gold. I know a number of hedge funds that own gold and now finally looking to exit because it was the hedge to a certain extent. My only problem with exiting is worldwide gold has much more value than it does here. I mean, to michael eisner, if i were to sell gold and buy a steady yielder, you know, you take a look at look just go down. Take a look at a cisco, which youre going to be talking to tonight because they won a very big verdict against them. Thats better than owning gold with one of the biggest cash positions. So those interest me. Yep. Im interested in 4. 5 , 5 yield. Im doing a run right now. This is when you have to be more clinical and less emotional. Because the fact is the companies that i am looking at at amazon still going to have great growth and im going to say it for the sake of having to say it, bristolmyers which indeed up 13 since the low, they have actually solved another form of cancer, at least gotten since february 11 and that is something you might want to look at on a big discount because there have been many crashes in my lifetime, 530 by the way on the dow versus 508 at 2,300. We need perspective. I hate to say this because i sound like my late father, but im old enough to have perspective. Yes, but you are. I am. Oh, my god, i have five guests on this week said i remember watching you when i was little. I said what am i carson . Ive had a lot of people say i watched you when i was in high school. Its depressing. No, im talking elementary school. Well, thats even worse. Well, youre older than i am. You know, when it comes to logic or a lack of emotion, its interesting i know were probably going to be looking oh hedge funds have been hurt. First of all ive heard a number of hedge funds had taken down their exposure pretty significantly, so i dont know well see the carnage there, but secondarily ive heard the algorithms we talk about so often got this right, not wrong. Why . Because theyre not emotional. And apparently those numbers and whatever they were working with in terms of input and output was a lot truer than what may have persuaded some to take different moves on where they thought a brexit was going to end up. Nate silver today saying the market took polls that were not decisive by any means and ran with them. People say the polls are wrong. Polls werent that wrong. Investors interpretation of them were. I love nate silver. Little wrong about the president ial thing. We havent even mentioned that yet whether people are going to say, listen, all polling is out the window. This is obviously a flawed process. But i like the fact the hedge funds, the algos control the opening. Remember, down seven, market halts. We got to keep that in mind. I know. But what im saying its very thin, theres a very thin book. Dont be surprised we have more of auger remember back in august the 2020 on s p. 2020 . Thats kind of a down. I know. Thats not a dip, david. Well, we did start at 2113. Im just saying. Thats a dip. I just think by the way, if oils back to where it was last week, but oil is just as important to a lot of the algos as distressing as that is and oils down big. Exxon and chevron broke down yesterday. You know what i dont hear you saying is the brexit sentiment will come to the u. S. In a new and different way and will introduce new forms of instability here. Well, i just cant say that because the American Companies that i deal with are just many of them were other than the Financial Companies in 2008, 2009. Ive got to run whats down 5 , im getting some runs about what can yield 5 when it comes down. Those are benchmarks, touchstones. You have to look at bonds versus stocks. A lot of the hedge funds dont think like that, but a person at home is thinking should i buy verizon at 53, and you got to remember verizon was at 50 not that long ago. Buy att at 40, it was at 36, maybe you get that opportunity. Right. Thats the kind of opportunity im talking about. Not necessarily tesla. But dont you believe that Decision Making to a certain extent will be put off now if youre looking to make, even when were talking about sort of industrial data points, which have not been great, are you going to have a pause on big ticket items if youre a corporation . Is this new layer of uncertainty as we work through the implications of this exit by the uk from the eurozone, is it going to prevent people or corporations from doing things they might otherwise do . M a obviously an area i tend to focus on. Right. Are we going to see it first of all you got to wait to see how the market shakes out. That could take a while. Right. Yeah, things are going to be on hold there. I dont know how long its going to be, but this is going to take a long time to