As we noted last night, when we previewed the virtually assured "No" vote, we said that "a strong “No” vote will cause Prime Minister Renzi to resign, leading to political instability in Italy.
Forget the "impossible trinity" - Turkey is facing a just as impossible dilemma where it is trying to juggle two things at the same time: attempts to lower interest rates while supporting its currency, and predictably it is failing.
On Friday, the Turkish Lira crashed to record lows, plunging as much as 3.60 against the dollar when Turkish president Erdogan urged banks to lower interest rates because in order to stimulate investment in the economy "there is no other remedy".
Less than a month after the "shocking" election of Donald Trump as US president, the world prepares for another day of political shockwaves, this time out of Europe, when on Sunday all eyes will be on Italy and, to a slightly lesser extent, Austria.
Or, as Bank of America puts it "Meanwhile in Europe..."
We've written several times over the past couple of months about the epic meltdown of the the Dallas Police and Firefighters Pension (DPFP) (see here, here and here for background). It all started when the Pension Board discovered that one of their real estate managers had been consistently overmarking illiquid real estate investments. That discovery resulted in an FBI investigation of the manager and a $1BN write down for the DPFP. In the wake of the writedowns, Dallas policemen and firefighters rushed for the exits and withdrew over $500mm in assets.
In one of the day's more puzzling developments, the Mexican peso tumbled on news that the head of the Mexican central bank, Augusten Carstens, who several years ago competed against Christine Lagarde for the top IMF post, announced he would unexpectedly stand down from his post next July. The term of the 58-year-old Carstens, who headed the central bank since 2010, was due to conclude at the end of 2021, which makes today's announcement particularly surprising.