radio. i'm scarlet fu. alix: i'm alix steel. also joining us, london anchor matt miller. scarlet: we want to get to the bloomberg first word news. mark crumpton is back with more. mark: a petition to parliament that calls for a rule that a voter turnout of less than 75% and a remain or leave photo under 60%, there should be another referendum. the british government said that during the campaign there would not be a second vote. in spain, exit polls showed the main progressive parties, the socialists and the antiestablishment group podemos probably won a majority of seats in today's election. the caretaker government one the 121, savings with 117 to

although both second and third place groups have ruled out supporting. prominent conservative columnist is leaving the republican party because of donald trump. george will says he switched his party registration to unaffiliated. the pulitzer prize winner tells pj media that republicans should "grit their teeth" during a hillary clinton presidency and hope to beat her in 2020. federal officials in west virginia are assessing the damage from devastating floods that killed 21 people. present obama has offered condolences and signed a -- president obama has offered condolences and signed a three-county disaster declaration. they have canceled the greenbrier classic, which was scheduled for next month. an auction to sell the belongings of james "whitey"

a traditional diamond ring went for $3000. the boston globe says the proceeds will be split among the families of bolger fell victims, including 20 people killed by bolger and his gang. ae 86-year-old is serving life sentence for a host of charges, including his for just a beige. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. back to you. scarlet: hedge fund managers jenner day and david harding have reported gains in the aftermath of brexit. ahead of the vote, o'day conducted a poll and it showed the result that was much closer the markets were expecting. us, our guest from

richmond, virginia. y that or went long on the u.s. dollar and gold. that was a winning strategy. going forward, what strategies will prevail? guest: i think strategies that are focused on relative value. people are worried about the capital markets going forward. comingt just the e u.k. out of the eu. what is next? each country that puts up a vote will create uncertainty in the marketplace. when investors the uncertainty or risk him a they require a higher return on capital, which lower pe onially a equities and higher spreads on fixed income. lower value hedge fund strategies, for example, should do pretty well because they are not dependent on the moves of the market and they are trying to pit those stocks that will

benefit positively and sell short those that will get hurt. yates did very well on friday. they are not correlated with the market. so far this year, they have been correlated. i think it is the time to diversify. maybe not all cta's, but if i present allocation. alix: don, does that mean we will see money rotate from strategies into ones that have been beaten up the last few months? i think that there will be large rotation. that started in august when the market sold off in jenny were in february, and now it will be intensified. people will move out of strategies that have a lot of data in them. distressed debt, long bias, equity managers, activist managers. i do not think it will leave the hedge fund industry.

i think it will shift into strategies that are uncorrelated with the capital markets. matt: we talk a lot about whether hedge funds will lose writes.ing i know the swiss had to negotiate hundreds of different agreements, bilateral agreements with the eu for years and years and years to figure it out, the way they got it set up. is it going to be too tough for hedge funds to stay in london? on: you know, you are talking about regulatory rules as far as marketing various jurisdictions, and you know, i think it will make it more difficult for london-based hedge funds to sell themselves throughout europe. they have reverse solicitation, so investors who know the marketplace can still reach out to those managers, but you will probably see some potentially move out of the u.k. and to make it easier to market throughout the continent.

in general, i think this could potentially benefit hedge funds only because -- the equity market is going to go straight up. hedge funds hedge. if people are worried about downside volatility, the hedge funds tend to be the better place to invest. still?an you hear me or no? i think we are having problems with don. we will try and reconnect him, what i wasd scarlet, going to ask is, one of the questions we will be asking throughout the evening and the weak and maybe the next couple of years -- who is next? does the eu breakup, and what opportunity does that offered to hedge fund investors? scarlet: and if anything, the eu determined to continue expanding. our guest we are speaking to later has a stance where they will continue to and large the

european union -- keep theirwant to jobs. they definitely want to keep their jobs. but do the voting people of europe want to stay committed to the european union as a political construct. the u.k. voted pretty strongly know. alix: and the question is how is this reflected in the markets? the buyers and sellers are forced to sell when it goes one way. if you see the s&p for continuing 4.5% declines over the next few days, you --ld see 98 in dollars of $90 billion of selling. for hedge funds, they give you the support on the downside. that is what they are meant to do. that is tying that back into hedge fund strategy and the outcome for these guys. scarlet: and going back to that idea we introduced earlier -- they did well because they bet

on the u.s. dollar and gold. you can see gold futures climbing. harding among those who have done very well. alix: d that wraps it up foron. don.at wraps it up for matt: it will be great to find out how much george soros profited on this after his op-ed in "the guardian." eu leaders met to put pressure on the u.k. to leave as soon as possible. bloomberg caught up with the belgian foreign minister earlier today. >> next week we will have a meeting. we have 20 member states. starte start, we discussions formally them a if it is possible. but we need to start as soon as possible to avoid any possible

crisis. go to brussels next for u.s. isight on how the reacting to a divided europe. this is bloomberg's special coverage of the brexit vote and the fallout on bloomberg television and bloomberg radio. ♪

matt: let him bloomberg television and him bloomberg radio, i am matt miller -- live on bloomberg television and on bloomberg radio, i am matt miller. i enjoyed joined by alix steel and scarlet fu. secretary kerry going to brussels as the world grapples with the implications of britain's decision to leave the european union. we go to ryan chilcote standing by in brussels. what is secretary kerry looking to accomplish with emergency talks he is entering into? look, what i think he wants to accomplish is to send a message by visiting the european union, by visiting the top diplomats and brussels for the eu and going to london. the u.s. loves both of them and is here to support the both of them as they go through the separation process. secretary kerry is kind of

coming as a divorce counselor, but not a disinterested one. do not forget, the u.s. has a lot at stake here, and an awful lot on the line. with what iseals the biggest disruption in geopolitics in europe in decades. a sense, ryan, of what is at stake here for the united states. therewell, first of all, is the issue of security. the united states is very concerned about russia. the last thing the u.s. wants on the security front is a divided europe that they think r putin could take advantage of. the u.s. and the european union together represent 64% of global gdp, and that's a lot. u.s.ast three years, the and eu have been negotiating a free-trade deal. they were hoping to get to the end of those talks, maybe even

before obama leaves the white house. that is looking like it might be difficult. nonetheless, they would like to get it done sometime in the near future. there are setbacks, and now with the u.k., the world's fifth-largest economy, the second-biggest in the eu, that will come to get those talks. there's an awful lot of the u.s. wants to support in this process, but also get a read on so they can do their best to navigate through this. where there was one unit, one geopolitical body, the european union now sometime down the road in the near future you may have to do. you are basedknow in europe. you are an american and a keen observer of american politics grade you do realize the two ofple running for president the united states are not exactly huge fans of free trade. ryan: yes, i do. that is part of the issue here. for all of the people who support free trade, they are

concerned the doors on free trade were already closing. not just in the united states, but in europe as well. a lot of people who observe global trade talks say it could be the nail in the coffin. it's one reason why the european commissioner for trade is headed .o the states the wto chief is in london right now. whole framework of global trade is about to collapse as a result of this one brexit or the possibility of the the nearing the eu and future. the little momentum that was there seems to be slipping out the door. absolutely fascinating stuff, ryan. great time to be there, adversely, and brussels. bloomberg's ryan chilcote joining us from the european union capital. we will speak with the chair of the european parliament's foreign affairs

committee. definitely no view you want to stick around for. scar? scarlet: julie hyman joins us with more on the impact on markets. there is anxiety that things will not come down. julie: i have not seen many predictions it is going to calm down. you have the fundamental reaction, and that on top of that, you have the technical, programmatic reaction, and that we examined. 2.6 trillion dollars was erased from the value of stocks globally friday. there is an index that measured that. the world cap index. that is the decrease at you had. according to an estimate of the market cap that was a raised in the united states in particular, there is an estimate that quantitative trading accounted for $25 billion of that. programmatic trading is anything

triggered automatically. if technical levels reach a certain place in stocks, then that triggers another sell order, for example. if volatility reaches a certain level. etc., etc. the jpmorgan derivatives strategist says forget what happened on friday. there could be another $3.5 billion wiped out as a result of program attic trading. another analyst from ubs says as much as $160 billion. this could be significant here. alix: we did see a lot of that in august. we talked about that exacerbate in any kind of selloff as well. take us through any other big historical event somewhat the market similarities were from then to now. the chief global strategist at charles schwab looked at this. he looked at a couple of things. it looked at the japanese earthquake in 2011, the debt ceiling standoff in august of that year, and the 2012 eurozone

recession triggered by the crisis there. on thesechart based three events, and he points out, yes, you have big kleins in each of -- big declines in each of these cases, but you have recovery pre-shock levels. we are talking about significant shocks. of ansounding a little optimistic note on what we could potentially see -- not tomorrow, not next week, maybe several months down the road. waslet: the damage we saw extensive. how does this compare to the past? julie: i was surprised. it's not that terribly steep. even if you go back to august 2015 -- to be specific august august 24 --h -- that was a decline of 3.9%. on the first day of trading after the september 11 attacks,

a 4.9% decline. so, it's interesting. i think we have a chart of these various declines, but it's not as large and magnitude. but again, we could see the coming declines in coming days. maybe not a one-day event but a multi-day or a multi week event. are saying,nalysts look, the selloff is orderly. if it is orderly, then we are good. markets are supposed to do this. scarlet: julie hyman, thank you so much. and jules will be back later on with more analysis. alix: thank you for joining us for our special coverage of the brexit vote and what it means. this is "bloomberg markets." ♪

alix: this is "bloomberg markets " on television and radio. i am alix steel.

scarlet: i am scarlet fu. also joining us from london, matt miller. earlier, ralph schlosstein spoke about why uncertainty in the inevitably will hit a ceiling in the post-break world. take a listen. ralph: it's too early to see any effects other than the obvious decline in market globally. but uncertainty always slows down m&a activity, and why does it do that? because what happens is the price that buyers are willing to pay for companies weakens a little bit, because there's more risk and more uncertainty. and the sellers of businesses look at last week's price and say, well, we can't take a discount from that. so, what happens is, the spread between what buyers want to pay

and sellers are willing to accept slows down and that slows down activity, which is why uncertainty always creates a short run slowdown. intermediate to longer term, the of strategic connection or strategic mergers will benefits because the of scale and broader distribution and broader products will continue. >> does the price come down particularly for u.k. assets as we lose or may lose the premium that has been there because of access to the common market? ralph: i think at least in the short run, the two biggest losers of this are going to be u.k. real estate -- both premium, residential real estate and commercial real estate -- because in my own view, in employment in the services

sectors and the u.k., including the very important financial services sector will slow down and probably reverse for a period of time. and the second is obviously the u.k.-based financial services sector. -- u.k. has been predominant a predominant entry point into the eu for financial institutions and it is certainly going forward, but we have no idea at all how this will settle out in terms of the transfer of services across the borders that are not part of the same union. >> given the fact that we have no idea at all, as you say, does it actually, ironically make u.s. domestic internal investment more attractive when prices go up here? we clearly become a safer

haven for risk assets. risk assets being things like equities and currencies and commodities, and clearly you are going to be happier owning and equity in the u.s. at this point in time just from a risk-reward point of view. but there's probably going to be a little bit of pullback from risk assets generally because what happened in britain certainly would cause one to be concerned about the various populist movements that are springing up globally at this point in time. uy: ralph, good morning. it's guy johnson in london. where would you base yourself in europe right now? ralph: i think you would sit firmly on your hands is effectively what would happen right now.

these are gp's and private equity firms are making long-term investments that are fundamentally it liquid -- this point inat time, investors are going to be inclined to make investments that if they see a change in the landscape, they can reverse or exit the next day, and p/e investments are the antithesis of that. alix: that isevercore's ralph schlosstein. of theup, the chair european parliament's foreign affairs committee will be joining us. special coverage of the right to vote on bloomberg tv and radio. ♪

london and new york, welcome to bloomberg's

specials sunday coverage of the briggs it fallout. we are live on bloomberg television and bloomberg radio. i'm matt miller. scarlet: i'm scarlet fu. alix: i'm alix steel. scarlet: here is what we are turning to the sunday. european union members are trying to organize after the surprise brexit vote, putting pressure on the u.k. to leave as ugly as possible. ther brok, chair of committee, is joining us this hour. region's face the second biggest budget deficit. we have more live from madrid. scarlet: let's get you bloomberg first word news. let's go to mark crumpton at the news desk. mark: more reaction to the you k's vote to exit the european union. appearing on abc's "this week," mitch mcconnell said u.k. citizens got tired of being told what to do.