|  Does anyone remember Brexit? In case you might have been napping the last week or have been without access to the internet, well that is now a long forgotten non- event whereby the British committed financial hari-kari by voting to leave the EU. It rattled US Equities markets for a full two days before igniting a rally in just about everything except the British Pound and most EU stock markets. US stocks ended up +1.28% to +2.57% this week, with the NASDQ 100 (QQQ) leading on good volume. The tell was the immediate vicious snapback rally the prior week immediately shrugging off the entire Brexit shock. This Friday, the S&P 500 hit new record highs as US Treasuries hit the lowest yields ever! All this on the heels of a great jobs report. Just a few weeks ago the “group think” was that the Fed would raise rates with reports of a growing economy but that is a distant memory as well... at least for the moment. Investors bought all asset classes from Equites, Treasuries, Silver, Gold and even Junk. Junk (JNK) debt soared, up over +1.35% on Friday. About $1.25 billion of Transocean (RIG) new debt was snapped up in a fresh deal that just closed, signaling all is clear. Good looking junk it is. Even Gold (GLD), which as an anxiety index should have taken a reprieve from its recent tear could not stay down and closed up +.6% on Friday. Strange as it seems with negative short term rates in most developed countries it’s getting hard if not impossible to park cash to find a positive “risk free” return. So, it’s not surprising that Gold is finding buyers as it is most sensitive to interest rates. Since it now costs money to park cash in short term instruments why not put take a shot on the yellow metal? Last week we talked about markets at extremes and certainly there is a bubble underway in rates. How far and for how long it will persist is unknown. As we pointed out, the way to burst blowing bubbles is to change the rules of the game as the Comex board did in 1980. They had to bust the Hunt silver corner, avert bankrupting the exchange along with the banks and brokerage firms involved. Only those supporting the corner got burned. Those proficient at the art of speculation (not investing) did well. There is one scenario that might put Humpty -Dumpty back together and prick the credit bubble now unleashed. That requires fiddling with some rules. The fiddle is not pulling the trigger on the Brexit. The final exit requires someone responsible in Britain to sign off on Article 50 and submit it to the EU. So far the Prime Minister and the Parliament have not shown up to do so. Another referendum is being considered to vote on the terms of the Brexit before Article 50 is submitted. It puts the Brexit referendum in limbo. And it could be for a long time. There is a huge amount of cash sitting on the sidelines paying parking fees and losing money. There is no telling where all this might land or how long the blow-off in credit might last, what it will unleash and just how far various asset class can go. It’s historic, fluid so let’s go to the charts and dump the fundamentals! Tap here to go to this week's video. | 
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