Felix qui potuit rerum cognoscere causas

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"If you think that a referendum vote on June 23 by UK citizens on whether to withdraw from the European Union (called Brexit, short for British Exit), is simply a proxy on whether the UK should dislodge itself from the edicts of Brussels, think again. It’s morphed into a much broader debate on whether citizens worldwide should surrender their right to a participatory democracy in order to further the interests of multinational corporations, secret trade agreements packed with secret court tribunals, global banking hegemony and central banks attempting to keep all these balls in the air for their one percent overlords..."
Why Brexit Is Such a Threat to the New World Order

Labour MP Jo Cox Murdered On Street:

                                                                      Widely quoted eyewitness Abdallah admits he didn't hear killer shout

“..only “a few lunatics” may want to join the EU now...”

***Switzerland withdraws longstanding application to join EU

<Angela Merkel Diagnosed by Psychoanalyst as Narcissistic, Verging on Mental Breakdown>

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Caution: Central Banks Trapped, No Exit From ZIRP/MRP

"Buckle up, because there is a lot to talk about, as something has finally happened. Namely, world bond markets tanked pretty hard overnight, with 10-year yields worldwide rising somewhere between 8 and 10 basis points. And while that was a big percentage change, given how low yields are, it really doesn't signify that much, though (if it continues) it is liable to be very painful for everyone around the globe who has been madly chasing fixed income.
Most likely, fixed income is declining because that market has exhausted itself on the upside, as central bank monetization pushed it to one place, and in conjunction, tons of entities scrambled for yield out of the fear that rates would go even lower, which helped take it to the "final" peak. (I'm not saying that is definitively what happened, but it very well could be.) Having said that, there is no indication that there has been any sort of change in psychology, which is what really matters.
Such Insubordination Nonetheless, I would like to point out that the fact the bond market has declined despite central bank buying and wanting rates even lower proves a point that I think a lot of people who have only been investors for the last 20 years have a hard time understanding, and that is: when markets want to do something, they are bigger than the central banks. I'm not saying CBs are panicked about the backup in yields, but I am pretty sure they are not excited about it. People get used to rates (or stocks) only rallying, and they change their behavior, then all of a sudden rates go against them and it causes problems.
So the bond market may have exhausted itself, or it may not have. It is quite likely that if we are going to see more bond weakness, or even just this amount, it will precipitate a long-overdue break in equity markets. If that occurs, bonds could rally again. In fact, if we get a big enough decline, which we will at some point, then we will start the discussion of QE4 in America and other countries doing something similar. That could produce a blow-off or it could lead to a failing rally. We just don't know.
Hold That Thought The point is, yields have backed up in a way that signifies something important may have happened, but it doesn't indicate any sort of change in psychology that would trigger other investment decisions. So while it is quite possible the 34-year-old bond bull market is done on the upside, it doesn't mean much to anything else. Yet.
That said, it does impact equity markets and, to the extent the stock market has been an accident waiting to happen (just like fixed income), we are liable to see stock prices start to decline. And of course the economic news will be interpreted as weak (as it has been) instead of folks trying to pretend it has been strong simply because the stock market has gone up. (Or as I like to say, the SPOOs write the news.)
Stock market weakness and the perception of economic stagnation means there is no chance the Fed will hike in September or December. They only talk about it because they are trying to act as though their policies work, and they can hike if they need to because the economy merits a hike, even though all of those thoughts are false. (Rates are far too low, but that is a totally different discussion.)
Running Out of Road If I were to sketch out a roadmap I would suggest we are liable to see more stock market weakness, as there are plenty of reasons for the market to decline. Quite frankly, I believe the only reason it has held up is because of the monetization that has taken place around the globe. If you take a step back you can see that the SPOOs pretty much stopped going up when QE3 ended. We went sideways for a long time and they couldn't make a new high, then they did after Brexit, but I believe the U.S. stock market has only held together because of the central bank monetization of other G7 countries. Now even that is not enough.
From here, weakness in the stock market will lead to QE chatter and ultimately QE4. However, any signs of said weakness is just a trade leading up to that. The next monetization scheme will set the stage for the investment landscape for the next couple of years. But you can't look at what central banks do in isolation. It has to be as a function of what they do and how markets respond. If the bond market blows off to make a new high, that will require thought and analysis to understand what it may mean. If they have a failing rally, that will be really important and have severe consequences.
Who's In Charge Here? The truly important moment in time will be when the central banks ease and bond markets decline. That will signify a loss of control. If central banks ease and bond markets rally, and the rally sticks, they haven't lost control. That doesn't mean they will get their own way, but it is not the big psychological sea change we are looking for. The only way the investment landscape is going to change for real is when psychology about the efficacy of central bank policies changes, and in my opinion that can only happen after QE4. So life has potentially become interesting, unless today turns out to be a one-day wonder, which I don't expect.
As for the metals markets, they could see a bit of a bumpy ride as the crosscurrents of what all this means get sorted out, but the fact of the matter is we are closing in on the moment in time that it is clear that central bank policies don't work and they are trapped, yet they keep doing the same thing over and over again. That is a recipe for a much higher gold price, while CBs trying to fight a decline in the bond market after they have lost control -- which is several steps away -- would be even more wildly bullish for gold.
While that may be getting ahead of ourselves, it does appear that the recent script that everyone wanted -- i.e., stocks and bonds gently going up ad nauseam forever -- has finally been shredded.
The Unicorns In the Coal Mine Turning to the action, the market here lost almost 1.5% through midday, with the Nasdaq leading the charge lower and almost every stock on the screen red. The fact that the market has run higher on fumes, ignored bad news, and traded sideways for a couple of months leads me to believe that today's action is the start of a much bigger break.
In the afternoon the market kept on sinking -- instead of rallying, as it has done so many times recently -- and closed on the lows, losing over 2% (and potentially setting the stage for more weakness on Monday). Away from stocks, green paper was slightly stronger, as dollar bulls continue to believe that the Fed knows what it is doing and a rate hike is imminent. Fixed income was roughed up here, although not quite as bad from a basis-point perspective as the rest of the world, and certainly not in percentage terms, either. As for the metals, silver lost 2.5% to gold's 0.75% and the miners were hit pretty hard."