Brexit

[petec]

That's way above my pay grade! That said, I've read some quite good critiques of the models used to predict disaster, and one of the ex-governors of the BoE is very vocal that it won't make a huge difference. I read that the UK has grown (marginally) faster than Germany since the vote, which I find remarkable, and unemployment is at its lowest since 1971. So my instinct is that the risks are being exaggerated and that a recession of GFC severity is unlikely. The far bigger issue is whether someone with a brain is Prime Minister, or Jeremy Corbyn. If it's the latter we're going to hell in a handbasket regardless of what happens with Brexit.

 

Bear in mind the FTSE100 (if that's what you're looking at) has a lot of foreign & commodity earnings in it so it's not the best gauge of how investors view Britain.

[Guest cherzeca]

I have been following EU credit issues for the last few years and now brexit.  this is beyond strange and prediction. I would make a simple observation. there are no mass riots in London as there are in Paris.  seeing water cannons and tear gas on the champs elysee grieves me.  a common market/society of countries as disparate as Greece and Germany leads one to think of Keats, and a center that cannot hold.  economics and trade are important, but they follow culture and societal cohesion.  to my mind, England will endure especially once it disengages, come hell or high water from the EU.  more EU counties to follow I suspect

[petec]

I have been following EU credit issues for the last few years and now brexit.  this is beyond strange and prediction. I would make a simple observation. there are no mass riots in London as there are in Paris.  seeing water cannons and tear gas on the champs elysee grieves me.  a common market/society of countries as disparate as Greece and Germany leads one to think of Keats, and a center that cannot hold.  economics and trade are important, but they follow culture and societal cohesion.  to my mind, England will endure especially once it disengages, come hell or high water from the EU.  more EU counties to follow I suspect

 

I fear so.

[wachtwoord]

I think the EU has been a bit shortsighted. They insisted we negotiate the divorce settlement first and the future relationship later, with the result that Parliament won’t back the deal because they don’t know what the future holds. That wasn’t smart. Varoufakis has described the deal as something a country would only sign if it had been defeated at war. If that’s even half accurate then they’ve overplayed their hand and raised the risk of a no deal Brexit.

 

All the EU did was aimed at scaring any other country from trying to leave like Brittain did: years of fear mongering (the economy, o no!), years of calling the Brits xenophobes and uneducated, purposefully fucking up any sort of deal while pretending to work on one.

 

It's like trying to leave a gang. The gang leaders will want to make an example out of you ...

 

I hope the Brits do the hardest Brexit imaginable and in 10 years will have a much improved economy to show for it. A giant fuck you to the European "gang leaders".

 

However, I expect the EU to coerce GB into a remain.

[scorpioncapital]

Europe is not one country. There are many countries that operate differently and would have no problem doing independent deals with UK. Europe, in terms of EU policy, is essentially Germany, Scandinavia, France, Netherlands, Belgium (Western Europe). Already everyone center-east is already not complying or loathing many EU policies. Italy has also sort of pivoted East. EU is 2-track, although it appears as a unified voice. The only reason the center-east countries like EU is a) freedom of movement and b) lots of cash going to them in exchange for using their lands and labour.

[rolling]

As a non british young european, I disagree with some of the points mentioned above.

1- the basis for my opinion is that Both I, my generation, younger generations and some a bit older generations feel strongly european: I don't remember my country out of the EU and cannot imagine such thing. I believe the same happens in the UK. As such, read some of the following points as what I would think if it was in my country.

2- the referendum gave a marginal leave, a 600.000 difference

3- old generations are dictating younger ones destiny, but guess what, If you take expected life years in the EU or out the result was a massive stay, and that's how a referendum should work in a situation like this. The point being:

4- if you are dying in a few years you should not be voting other peoples future, if you have little future what is your right to decide other peoples future?

5-600.000? Many of those have already died or are unable to vote, give them enough time. The vote for LEAVE might already be minoritary.

6- this means I believe there is no clear mandate to LEAVE and people are trying to convince the public opinion there is

 

Part 2: other points

6- participation in the EU elections: STAY will likely vote. Will LEAVE vote?

7- give them enough time, but ideally make them have another referendum before leaving: that seems to be the strategy, and, as explained above, it seems to be both the best strategy and the correct way to get an honest result for the British people. People have the right to make an informed vote in something this important: if you don't do a referendum after a deal as been reached you are denying them a choice

[John Hjorth]

rolling,

 

Just to get a better understanding of your last post here and its backdrop: If I remember correctly from your prior posts here on CoBF, you are a Portuguese citizen. Is my recollection correct? -Thank you. [ : - ) ]

[rolling]

rolling,

 

Just to get a better understanding of your last post here and its backdrop: If I remember correctly from your prior posts here on CoBF, you are a Portuguese citizen. Is my recollection correct? -Thank you. [ : - ) ]

Yes, greets

[Spekulatius]

EU has been great. You can travel to a lot of countries without showing your passport, stupid border controls. You can move ,work in France , Italy, Germany as you please. A lot of countries like Spain, Portugal, Poland, Czechoslovakia have benefited tremendously. No expensive currency exchanges.

 

The Greeks screwed up, so what. They had the choice to leave. The U.K. will leave, but at the end of the day, they will still be closely connected to the EU by trade.

[Spekulatius]

That's way above my pay grade! That said, I've read some quite good critiques of the models used to predict disaster, and one of the ex-governors of the BoE is very vocal that it won't make a huge difference. I read that the UK has grown (marginally) faster than Germany since the vote, which I find remarkable, and unemployment is at its lowest since 1971. So my instinct is that the risks are being exaggerated and that a recession of GFC severity is unlikely. The far bigger issue is whether someone with a brain is Prime Minister, or Jeremy Corbyn. If it's the latter we're going to hell in a handbasket regardless of what happens with Brexit.

 

Bear in mind the FTSE100 (if that's what you're looking at) has a lot of foreign & commodity earnings in it so it's not the best gauge of how investors view Britain.

 

Thanks, much appreciated. The table from the Guardian seems to indicate very slow GNP growth in Britain in 2018 and the near term future, but no crisis. Projections always need to be taken with a grain of salt and were based on soft Brexit:

 

https://www.theguardian.com/business/2018/nov/08/uk-economic-growth-slowest-europe-next-year-european-commission-forecasts-brexit

[SharperDingaan]

The reality is that the MAJORITY of British citizens voted to LEAVE, and that it will affect individual citizens very differently.

If an individual feels strongly enough; nothing prevents him/her from simply emigrating from the UK to the EU - and the younger that citizen, the easier it will be for them to do so. This is nothing new for the UK.

 

Our own view is leave, and see where it goes.

No matter what, 30 years on it will be a different conversation with the EU, and the EU will be a different place to what it is now. As a young person with only modest prospects, my future depends on disruption; and if I don't have the ability to emigrate, this is very likely one of my best opportunities. Additionally, there is nothing to prevent simply 'joining' the EU at a later date; it doesn't have to be done now.

 

Of course, if you work around Canary Wharf - this is heresy!

Just a different POV.

 

SD

 

[Guest cherzeca]

question for board:  how integral to the EU is the euro?  seems to me that a federal scheme such as in US where notwithstanding 50 states there is one federal govt that manages a federal system of taxation and spending is what the EU needs to support a single currency.  all of the EU directives on social/cultural etc can be annoying, but isn't it just inexorable that the EU will render apart as credit issues reappear and continued stress is placed on euro.  can there be an EU light with separate currencies and nil trade/border barriers?

[CorpRaider]

I don't understand why they can't just leave Northern Ireland in the customs union as like a special economic zone and have a customs border when stuff comes into GB.  I'm sure NI could use the economic tailwind, if any. Seems like it would deal with the Irish border question at least and then you get a chance to iterate on both systems.   

[John Hjorth]

cherzeca,

 

Wikipedia : List of currencies in Europe.

 

This article is actually a bit confusing because of its level of detail, but anyway, reading the first paragraph of the article fairly states the overall picture.

 

So my personal answer to your direct question would be : "Non integral". But the Euro is by far the dominating currency in Europe. However that does not in general put constraints on intra-European trade [at least not here in Denmark, where I live]. Here, hedging your currency positions and currency cash flow, is a part of ordinary course of business in any company of decent size with a finance department with respect of itself.

 

- - - o 0 o - - -

 

In a broader sense, there is also a cultural and emotional dimension of Brexit, I think.

 

Nations Online - Interactive Map of European States.

 

- - - o 0 o - - -

 

The whole thing is more about how much gravel will be thrown into a well functioning & existing European trading system & structure.

 

- - - o 0 o - - -

 

Thank you for being open minded, cherzeca.

[Guest cherzeca]

"The whole thing is more about how much gravel will be thrown into a well functioning & existing European trading system & structure."

 

right, but I just dont see how common usage of euro is integral to an integrated trading structure.  but I do see the euro creating massive issues for a federated system in which the several issuers cant control their own currency/debt/tax program.  if I am right, and as an American I admit I do not understand the EU as a governance structure, then bexit is the easiest break that the EU will experience given England's separate currency.  fire next time...

 

[rb]

I don't understand why they can't just leave Northern Ireland in the customs union as like a special economic zone and have a customs border when stuff comes into GB.  I'm sure NI could use the economic tailwind, if any. Seems like it would deal with the Irish border question at least and then you get a chance to iterate on both systems. 

Because of a nationalistic NI party that's keeping the Conservatives in power.

[John Hjorth]

"The whole thing is more about how much gravel will be thrown into a well functioning & existing European trading system & structure."

 

right, but I just dont see how common usage of euro is integral to an integrated trading structure.  but I do see the euro creating massive issues for a federated system in which the several issuers cant control their own currency/debt/tax program.  if I am right, and as an American I admit I do not understand the EU as a governance structure, then bexit is the easiest break that the EU will experience given England's separate currency.  fire next time...

 

cherzeca,

 

In short, I agree on the first emphasized part of your post above, ref. my earlier original post. I'm reluctant at elaborating further here - because of fear of participating in or triggering to derail this topic about the Brexit.

 

This also applies for the second part of your last post emphasized by me above, ... but just even more.

[Spekulatius]

"The whole thing is more about how much gravel will be thrown into a well functioning & existing European trading system & structure."

 

right, but I just dont see how common usage of euro is integral to an integrated trading structure.  but I do see the euro creating massive issues for a federated system in which the several issuers cant control their own currency/debt/tax program.  if I am right, and as an American I admit I do not understand the EU as a governance structure, then bexit is the easiest break that the EU will experience given England's separate currency.  fire next time...

 

cherzeca,

 

In short, I agree on the first emphasized part of your post above, ref. my earlier original post. I'm reluctant at elaborating further here - because of fear of participating in or triggering to derail this topic about the Brexit.

 

This also applies for the second part of your last post emphasized by me above, ... but just even more.

 

I believe the vote for Brexit is more rooted in political disagreement than economic causes. Personally, I would prefer if this thread would be more focused on the economic and especially investment angle, as this is the focus of this message board.

 

For one thing, I believe that the fact that the UK kept it’s own currency and hence independent central bank ist the reason why British banks earn a higher NIM and are hence more profitable. exit should perpetuate this structure, which means that British banks should be more profitable going forward too. If correct, that would be an important consideration in terms of investments.

[thowed]

First off, I think the Brexit situation is so complicated, that having a truly intelligent view is impossible without a solid knowledge of European history, UK law, economics and more.  It certainly shouldn’t have been left for the British public to make a binary decision on.

 

I don’t know what the answer is, but here are some points to consider:

 

Sunken costs: If it is better for the UK to be outside the EU, will that improvement be worth the cost of leaving, and untying so many years of connections and systems?

 

War: One of the most important functions of the EU, which balances the terrible EU politics, is keeping Europe together and avoiding another war.  Too many people don’t appreciate the importance of longer-term European history.

 

The 2016 campaign: there were so many terrible lies spun by the campaign about how great and easy it would be for the UK to leave.  Even without knowing what leaving will really entail, it seems pretty incontrovertible that it will not be great or easy. 

 

The vote was won 52-48.  3 years later, and so much has changed.  While in a normal situation it would be completely inappropriate to have a second referendum, this no longer seems like a normal situation.

 

Business: so many of the current generation of UK politicians in all parties are ‘career politicians’ i.e. they have been doing it straight out of University.  So they have little life or business experience.  I think there has been huge ignorance about things like the complexity of modern supply chains, and the costs and complications that Brexit will create in disrupting these.

 

Northern Ireland: Again, if you don’t know the history, you don’t know how delicate and important the peace process is, and the repercussions for so many people if Brexit wrecks it.

 

Finally, I find it very depressing to see an increasing number of Western countries, who you hope would know better, sleepwalking into a form of civil war.  The UK with Brexit, the US with Trump etc.  We are all entitled to our own opinions, but we should still always be able to get on with those who have different ones.

 

I think respect for our fellow man, and communication are two of the most important things in being human.  We are always better when we talk to each other – and less likely to say the sort of things people find acceptable to write on the internet.

 

When even people from the same country are so fired up about an issue that they can’t talk to one another civilly, it is a tragedy.

[SharperDingaan]

The economic argument is to just sit on cash until there is a resolution.

We have no idea which way this will go, or by how much when it does eventually go. You're also earning a risk premium on your cash, by AVOIDING the loss from the event itself; were bonds or equities to react negatively (ie: that 100 pound equity becoming worth only 95 pounds on the day of the announcement).

 

Not what the trading folks want to hear.

 

SD

 

 

 

[thowed]

Personally, I would prefer if this thread would be more focused on the economic and especially investment angle, as this is the focus of this message board.

 

I take your point but, with respect, I think that everything is connected, and you cannot consider the economic and investment angle without considering all the other elements.

 

From what I understand, British businesses are apoplectic with the government, as they are completely unable to plan for the future e.g. know which country to build their next factory in etc.  Business hates uncertainty.

[John Hjorth]

... I believe the vote for Brexit is more rooted in political disagreement than economic causes. Personally, I would prefer if this thread would be more focused on the economic and especially investment angle, as this is the focus of this message board.

 

Personally, I have tried to do my very best to do exactly that - in this topic, recently.

 

- Now I think I'll just let it go from here. [some days, I think about if there are major flaws in my English communication here on CoBF ... ]

[meiroy]

The EU will slowly break apart (might be 15 to 20 years from now,  the way these things go) unless Germany acknowledges it is the cause of the main issues and the only one who can fix it. The core issues are economic, as they are in the UK and as they are in the US. Politics is just a more visible layer.

 

 

[shalab]

+1.

 

EU is a quasi democratic body whose main economic engine is Germany. Some people in this board look to Germany as the beacon of democracy, human rights, free enterprise, free trade etc. It is anything but that.

 

EU should let Britain exit cleanly with access to EU markets. They are playing hard ball to make it difficult for others to leave.

The EU will slowly break apart (might be 15 to 20 years from now,  the way these things go) unless Germany acknowledges it is the cause of the main issues and the only one who can fix it. The core issues are economic, as they are in the UK and as they are in the US. Politics is just a more visible layer.

[CorpRaider]

I don't understand why they can't just leave Northern Ireland in the customs union as like a special economic zone and have a customs border when stuff comes into GB.  I'm sure NI could use the economic tailwind, if any. Seems like it would deal with the Irish border question at least and then you get a chance to iterate on both systems. 

Because of a nationalistic NI party that's keeping the Conservatives in power.

 

Thanks.  Yeah I kind of get that a border in the Irish sea is anathema to them, but I mean I don't even really hear that floated as an idea.  Was that even among the advisory (or whatever they were called) votes?  Seems like if it looked to be the only way out, everyone would trample them to run for it.  It might even be a great thing for NI, they could take advantage of special status for as long as the EU lasts then when it collapses the U.K. as a whole would be a lot more anti-fragile.

 

I agree the Eurozone is fundamentally flawed, as arguably was the constitution until generations of amendment and judicial gloss and of course, the civil war.  Definitely do not want Europe to go through the civil war.