All of which will makes markets around the world shudder, shrug and generally behave like petulant teenagers. “Stocks have entered a new realm of volatility, unlikely to abate anytime soon,” according to a Wells Fargo research note issued on Monday. It warned, “Get used to it.”
But it would be wrong to focus exclusively on Britain when considering the possible financial ramifications and permutations. In a truly dire scenario, Britain is just the leading domino. It’s the next dominoes — most likely across the Channel — that matter more.
“We see Brexit as just one step in a process that is unavoidable of further referendums by other nations to exit the E.U.,” Felix Zulauf, an investor who operates a hedge fund in Switzerland, wrote in a note on Monday, contending that “the damage” of Brexit “will therefore be far worse for the E.U. than for the U.K.”
Of far greater concern will be if other European Union countries attempt their own exits — even if their efforts are unsuccessful. More glimmers of no-confidence among nations in the consortium could ultimately lead to a crisis that would be felt far beyond Europe.