Well, the unimaginable has finally happened. The 17% chance of a ""Brexit"" has come to pass and global markets are paying the price for a political situation. Prime Minister David Cameron of the U.K. has in essence stepped down, but said he will stay on till October, by when Britain should get a new PM.
Our futures are indicating a lower open. However, European markets are well off their lows, while our own equity futures are well off the lows of the night. Our futures were off a lot more a few hours ago, when the vote in favor of Britain leaving the EU was first made public.
This is mainly an EU issue and a Britain issue with global ramifications, but not to the extent that people might think. Yes, the dollar will strengthen, yes the yen has strengthened, yes there is a knee-jerk reaction to run to gold. However, in the big picture not much will change after all is said and done.
George Soros will make a killing on his bet against the British pond, but already the pound is at the high of the day vs. the greenback.
The Bank of England has just said that it stands ready to inject up to 250 billion pounds ($342 billion) into the British financial system if required.
The FTSE 100 is down around 5% after having plunged around 8% at the open, and has pretty much given back just what it gained in the last five trading days. It is back at last Thursday's levels, which in the big picture is not as bad as feared.
Of course, the Asian markets like Hong Kong and Japan got hammered due to the fact that they were closed by the time the European markets opened. Shanghai was barely down given the events of the day, closing lower by 1.3%.
Can our markets react as calmly as the Chinese markets did? I doubt it.
However, I have never been happier that our markets did not move up in the last five or six days like the European markets did. Maybe our markets had already sussed out that "Brexit" was a go, despite the odds makers saying there was virtually no chance of that.
Given the fact that we did not participate in the upside the last week or so, maybe our drop will also be small relative to the European markets and more importantly wash out the excess in our system.
The key as far as investors here at home is to not give in to the panic that the headlines, the talking heads and the pundits, swamis and gurus will try to introduce into the trading environment today and for the next few days.
There is a lot of uncertainty at the moment globally, and most importantly, it will take up to two years for Great Britain to leave the EU, and a "Brexit" does not mean a global economic collapse.
Just like the global markets recovered from the dotcom crash, the horrific fallout from 9/11, the global subprime thievery, "Brexit" will be a long and drawn-out process and most importantly, pales in comparison to the afore mentioned events.
In essence, the "Brexit" event just means that we have to find a way to turn the current short-term volatility into an opportunity.
Editor's Note: This article was originally published at 6:17 a.m. EDT on Real Money on June 24.