"Brexit Is A Time Bomb..." UBS Chairman Warns "Europe's Not Out Of The Woods With Macron Win"

Tyler Durden's picture

It appears the chairmen of UBS have plenty to say on Europe.Following former UBS chairman Peter Kurer's comments that "to the elites, the EU is a means to get rich quickly and export their problems," UBS current chairman Axel Weber has warned bankers that Europe is not "out of the woods" from its political risks even after Emmanuel Macron’s reassuring victory in the French presidential election.

Peter Kurer recently remarked on the end of the Euro...

Following an unfortunate combination of wrong decisions at the top and the uncontrolled flourishing of a self-serving bureaucracy, the union has moved in a direction where it has become a prisoner of its own constructed reality.

 

The EU was a great idea but it has been ridden to death. Back in 1992, almost half of Swiss voted to join the European Economic Area, including the traveller. If there was a vote today on joining the union, the latest polls say just 15 per cent would vote yes.

 

The EU had its chances. It squandered them, and maybe it will come to an end in the foreseeable future under the weight of its burdens: La messa è finita, andate in pace.

And over the weekend speaking in Tokyo, as The FT reports,  UBS Chairman Axel Weber said that political risk in Europe remained “actually quite high” even though “we’ve seen the centre hold in France” with Macron’s victory over far-right candidate Marine Le Pen, and even though all the signs were that the centre will also hold in the upcoming German location elections.

“That doesn’t mean Europe is out of the woods,” he told the International Institute of Finance’s spring meeting. “There is still Italy where it is very unclear that the centre will hold. And there is still Greece.”

 

He continued: “Where you find some bright side….there are (also) some downside risks that are not really priced into the market but could derail (Europe).”

 

“Brexit is a time bomb… and the countdown is on. It will be two years from now,” Mr Weber said. He added that “if the British really do leave the customs union and single market there could be a lot of volatility which could impact on the global economy”.

This is not the first time Weber has dared to comment against the global elites' party-line...  Speaking on the sidelines of their annual meetings of the IMF and World Bank last year, Weber warned that monetary intervention is causing international spillovers and major disturbances in global markets.

"They (central banks) have taken on massive interventions in the market, you could almost say that central banks are now the central counterparties in many markets. They are the ultimate buyer,"

 

"Investors have been driven into investments where they have very little capability for dealing with what is on their plate and I think that is a sure reminder of where we were in a different asset class in 2007," he said.

 

"So I think the central bankers need to be very careful that they do not continue to produce disturbances in the markets, which they acknowledge - it's a known side effect - but the perception that the underlying impact of monetary policy outweighs the potential side effect in my view is starting to be wrong," he added.

 

Since the global financial crash of 2008, central bank policy has focused on buying up bonds in large quantities and cutting interest rates to record lows. The Federal Reserve has since looked to unwind its own policy which focused on the Treasury market and the yield curve, but the Bank of Japan and the ECB's large-scale bond-buying programs continue.

 

"I don't think a single trader can tell you what the appropriate price of an asset he buys is, if you take out all this central bank intervention," Weber warned, adding that it often meant investors were making bad choices with where to put their money.

UBS Chairman Axel Weber is a former policymaker at The ECB and was the president of Germany's Bundesbank.

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Thoresen's picture

Brexit timebomb indeed.
No one can see the downside to the EU that's coming. The SNP wants Scotland to leave the UK but join the EU. This alone is proof that politicians put their own roles and fortunes ahead of the publicl

peekster's picture

Yup, Scotland could be stepping onto a sinking titanic.

land_of_the_few's picture

Last time round it was people berating the Scots for *not* voting for independence, and telling them they were stupid and useless for voting to *stay in* the UK, having been unduly influenced by Cameron's propaganda to do so.

SolidAssets's picture

she was a waitress in a cocktail bar now she owns a jet... http://bit.ly/2jdTzrM

Magooo's picture

Does anyone really give a fuck?

peekster's picture

Yup, the break up of the EU will have global consequences. So if you live on this planet, you should give a fuck.

Magooo's picture

I seem to recall Brexit being voted on how many years ago???

 

Nothing has changed.

 

Wake me up when it matters.

 

Otherwise - fuck off

peekster's picture

11 months ago. But you're not awake. So I'll let you off.

new game's picture

to the point: central banks buying assets. that is the obvious with the outcome completly in their control.

once majority stakeholders, the outcome is predetermined. this is not a marketplace. command economy china style.

insider market controlled by fiat print. printed prosperity for the few. debt to service by the vast majority. maff for the control of the masses. austerity next as they turn the screws. this is reality for the majority to understand and hence the poverty facing mankind...

 

buut, but, i voted-LOL...

Sandmann's picture

BreXit vote was on "Plassey Day" 23 June ie. 321 days ago.  Prime Minister changed in July.

US voted 8 Nov  ie 183 days ago and we haven't seen any progress on this wall but $54 bn more for the military.........$54 billion is more than any EU state spends on Defence

quadraspleen's picture

Not when it's the president of UBS telling us. Cui bono

Sudden Debt's picture

One thing is for sure in Europe... IT WILL TAKE YEARS!

nothing moves fast here.

Leveraged Algorithm's picture

Nothing moves fast anywhere with central bank intervention...  Until it breaks like a rubber band.

desirdavenir's picture

better slow and safe than fast and sorry !

Being from France but having spent a lot of time in Gemany, I appreciate a lot the loss of brinkmanship at EU level. 

tuetenueggel's picture

A group of monkeys still is a group of monkeys even if monkey in chief is a new monkey.
Nothing changes. With MOFU Macron in France France won´t change to anything better but into quite opposite direction. Failure.

land_of_the_few's picture

Macron is not the French Parliament, he currently has zero (0) seats out of 575.

Parliamentary voting in June could be interesting ... most likely they will fudge it to make sure the most popular party (FN)

doesn't get to do anything, by moving all the other parties formally under his control or changing the color of their name cards.

So basically FN would have to get 51% or more of the seats to get anything passed, but the other parties can happily get max 20% each or so and get legislation passed as long as they make up some kind of nonsensical coalition where they all hate each other and have different policies and interests.

This is what they do in Eastern EU to make sure peace or economic/social reform don't break out :D

new game's picture

i see corruption, police state of increasing violence and moar wrong direction policies taking freedom incremently.

BetterRalph's picture

I disagree,

when the old cage
gets a new monkey
it's a new cage

hey that's a haiku!

ReignDeer's picture

for (((them))) Europe will be out of the woods when 75%+ population will be exterminated or at least robbed blind

Hapa's picture

Yeah well, let's get on with the bombing, getting tired of waiting

Ghordius's picture

yes, listen to this megabanker, he has some fear products that might interest you

LOL

that meme, "the EU is going to break up"... is just a bit of salve on the mental wounds of Brexiteers that are starting to realize the future might entail a British national revulsion against their whacky direction and, more importantly, a moment when all the Brexit Lies come flushing up like turds in a WC that is clogged

www.brexitlies.com

here my challenge for today. pick any theme out of this link. let's see if you can defend one of those turds

Singelguy's picture

I don't believe the EU will break up. It is more likely that it will be rolled back to what it was originally sold as; a free trade zone allowing for tax free movement of goods and services. The euro on the other hand is toast. It is just a matter of time. It is highly probable that the roll back could occur before the 2 years of Brexit negotiations has expired which would make the entire process moot.

Ghordius's picture

that's the most common British (Remainer and in part Leaver) view on it

but it's not the way we Continentals view the EU and the EUR

and it starts here "what it was originally sold as; a free trade zone..."

Sandmann's picture

EU was never a Free Trade Zone......it was a Customs Union

Ghordius's picture

+1 and it started as a Political Project between France, Italy and Germany, with the Treaty of Rome

a kind of "let us stop making war among each other for resources, let us share them"

see the preceding Treaties, "let us share coal peacefully", "let us share iron ore peacefully", etc. etc.

the UK was invited to the Treaty of Rome. it's gov kind of answered "no, and it won't work". that was 60 years ago

RedDwarf's picture

"The EU was a great idea but it has been ridden to death. "

That it has already been 'ridden to death' after just a few decades is proof it was never a 'great idea'.  It was doomed for a variety of obvious structural reasons from the outset.  You cannot for example give each country a printing press for a common currency.  That takes a bad system (fiat currency) and magnifies the problems by many times.  Can you imagine the chaos if every one of the 50 States in the USA could create federal reserve notes?  Then you had the unelected technocrats.  The extremely different cultures, different industrial forms, etc.  The list is long.

Ghordius's picture

RedDwarf, if you are talking about the eurozone (19 countries), why are you mixing it up with the EU (27 countries)?

the UK is exiting the second club and was never part of the first one

in the US you have a dozen FEDs. and there was a moment in the US history when some of them were on the verge of doing exactly what you are describing with "chaos", they were thinking about not accepting the currency of the other FEDs

I suggest you learn a bit more about monetary history, starting with your country

holgerdanske's picture

there is nothing wrong with Red Dwarfs contribution, so I cannot see what your point is?

You are suggesting what he has not said, and then attacking that.

???

Ghordius's picture

read again. he mentions the EU... and then he starts to talk about the EUR

again: 27 countries in the EU. 19 countries using the EUR. two different clubs

Sandmann's picture

It is potty. Ghordius is right. UK prints Euro notes too at De la Rue

 

 

http://en.wikipedia.org/wiki/Euro_banknotes#Issuance_and_printing

RedDwarf's picture

The EU is a political union and the eurozone is a monetary union that is a subset of the EU.  However one of the primary goals of the EU is to promote everyone in the EU joining eurozone.  In fact nearly everyone who is in the EU is obligated to work toward meeting the criteria for joining the eurozone and then to join it.  So to my mind when I mention one of the fatal falws of the eurozone and mention how it is also thus a fatal flaw of the EU which is tightly married to and created this policy it is an on point criticism and you are dodging it by talking about the EU and the eurozone like they are independent issues.  They are not.

Magooo's picture

In case nobody has noticed ....  

 

We have a bubble that dwarfs the bubble pre-2008.

 

The stock market is artificially pumped up with central bank cash.

 

The entire world is a house of cards.

 

Forgive me if I suggest - who gives a flying fuck about Brexit - it is a non event ---  the men who run the world would never allow the masses to participate in a meaningful vote on any important issue.

 

So it does not matter that the Brits voted for Brexit - it will change nothing.  

 

And meanwhile we wait for total collapse of the world

south40_dreams's picture

"It's different this time"

BritBob's picture

There is a trade imbalance in favour of the European Union so it is in the interest of the EU to make amicable arrangements with the United Kingdom. What's more, the UK can do its own trade deals on a one-to-one basis instead of having the EU to deal 27 member states before it makes a trade deal.

The UK will opt for a hard Brexit especially when one country (or part of a country in Belgium) can stall negotiations for so long. Spain could act in a similar fashion over Gibraltar and has the cheek to maintain its Gibraltar sovereignty claim. Claim?

Gibraltar - Some Relevant International Law: https://www.academia.edu/10575180/Gibraltar_-_Some_Relevant_Internationa...

And then in 1975 they signed it away again - Part 3 – Inviobility of frontiers

Part 4 - Territorial Integrity of each of the participating states

Gibraltar – Helsinki Accord 1975 https://www.academia.edu/32824301/Gibraltar_-Helsinki_Accord_1975 (1 page)

 

So it looks like a quick hasta luego !

 

holgerdanske's picture

Germany is gaining through the EU, what they sought to achieve during WW2

In those days, only England (and Poland) fought them, the French offered little effective reisistance.

The action today is eerily similar, and the English Brexit is akin to the declaration of war against the third Reich.

Strange people do not see the similarities.

In those days France was just a burden.

So it is today.

Sandmann's picture

Poland did not fight them. As a nation state Poland collapsed and its government dissolved. Poles fought in the Wehrmacht, in the Red Army, and in the British Army-Polish Section - just as in 1914 they fought in Russian, German and Austro-Hungarian Armies.

Britain fought with India, Australia, New Zealand, Canada, Rhodesia, - it was hardly alone

HenryHall's picture

>> India, Australia, New Zealand, Canada, Rhodesia

- all of those were British at the time. Britain did not force independence on them.

Malta was the only country with which Britain, to its shame, forced independence on a reluctant people. Malta should have been given the same status as Gibraltar, but it wasn't.

gregga777's picture

The motto of the Goldman Sachs Feral Reserve System is:

 

"We steal from those who can least afford and give to those who least deserve it."

 

That is also an appropriate motto for the Rothschild's European Central Bank and their sock puppet Macaroni, too.  

HenryHall's picture

This is not the first time that Britain has stood alone against Germany.

Sandmann's picture

Funnily enough most of German/Prussian History  England has been its closest ally.

HenryHall's picture

Britain was a natural ally of Russia until the 20th century.

It is the Americans who have poisoned the minds of the British against Russia. Together Britain and Russia could achieve great things in a planet with its changing climate. Could have in the past, yet could in the future.

I do wish that Russia, like Kazakhstan, would swallow some pride and switch to the Roman alphabet, while retaining the Russian language and culture.

PontifexMaximus's picture

Funny, a german, earning his appanage in switzerland.......he should better su

HenryHall's picture

>> appanage

I learned a new word today.

BetterRalph's picture

I know I have problems where I live with the monetary system, and the financial system, but where I live I can honestly say that the TERM "Brexit" is used quite differently here in my humble home as " a FOOD in different stages. "

What do you want in your Brexit? 2 or 4 strips of bacon?
"Brexit time" quick grab your plate.
Kitty come get your brexit.,
did puppy get brexit this morning?
and finally
Get out of the bathroom, hurry up unless you want some of my "Brexit"