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b"With Mohamed El-Erian, Bloomberg View columnist, Chief Economic Advisor at Allianz and is Chairman of President Obama's Global Development Counsel, and Author of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse\\xa0

Making sense out of Great Britain\\u2019s decision to divorce itself from the European Union is a job for a highly-qualified expert. Mohamed El-Erian, author, Bloomberg View columnist, Chief Economic Advisor at Allianz, and Chairman of President Obama's Global Development Counsel, is such an expert.
Mohamed foreshadowed the chaos caused by Brexit in his latest book The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse, which was the subject of a compelling interview here at On The Money Radio last February. At the time, he spoke of the T-junction, that point in the road where you come to an intersection and must choose between following two dramatically different roads. Because of Brexit and other disruptive factors in our world economies and societies, Mohamed warns that we are now approaching that T junction, the end of the road, so to speak, and political choices will greatly affect the order of the world going forward.
How Brexit became the improbable that turned into a reality is best explained by going back to the beginning of Britain\\u2019s entry into the European Union. Unlike most of the other member countries who welcomed the opportunity to participate in a free trade zone and enjoy close economic, financial, social, and political ties, Great Britain viewed the EU mainly as a super free trade zone. Instead, they were held to regulations and requirements they found difficult to swallow, including those concerning immigration and open borders.
The political arena that ensued involved a Prime Minister, David Cameron, and his Conservative Party whose stability was threatened by the UKIP, the United Kingdom Independence Party, a fringe party much like the Tea Party branch of our Republican party, whose main goal was to exit from the EU. In order to win re-election, Cameron promised a referendum if he was unable to achieve certain concessions from his European partners. Apparently, the UKIP was not appeased, the referendum took place, and, to the surprise of even those who voted for it, Brexit ruled the day. And now what does remain is a mess.
Because this is such a singular world event, with no playbook to refer to, no one knows precisely what comes next. The ball is up in the air and how it all settles, Mohamed says, depends on the political choices made in the near future, not just in England or in the rest of Europe, but in the United States, as well.
Politics greatly affects the economy and the shock waves from something like Brexit create what Mohamed calls \\u201cunusual uncertainty\\u201d. Investment wise, so many factors are in play at one time that investors cannot differentiate between the good and the bad. With plenty of cash to invest, this could be a perfect time to pick up good names that are trading cheaply. Mohamed defines good names as those companies or countries with strong balance sheets, positive cash flow, and good management.
As for broad-based index funds or passive investments, the appeal is low fees, but part of the danger lies in passive funds being part of the index. Mohamed offers the example of Argentina which defaulted in 2001 and was 22% of the index."