UK vote to leave the EU ['BREXIT'] - 23rd June

[Wd40]

The FTSE is just opening, approx -8.5%, but the German DAX index is -10%... lol, shows you who this vote hurts the most.

France, Germany, Spain, Italy, Portugal, Belgium, Austria - all now lower than the FTSE-100. The other 'major' exchange in Europe is Switzerland [non-EU/safe-haven], and that's +0.65%

The GBP fall is limiting the FTSE fall. This is the joke: The Brits chose to leave the Euro, but the Pound chose to join the Euro.

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[Brah]

Is it just me or does it not seem like all of the possible scenarios (French referendum, Cameron's replacement, etc. ) were not thought out enough for both possible outcomes and the ramifications, and now chaos will ensue?

[Brah]

Cameron said in his speech there was a "clear" decision by the people, but like any number of recent US presidential elections, it was hardly clear when in fact it shows a country divided.

I don't know a better way but...

[JR8]

WD: The GBP fall is limiting the FTSE fall. This is the joke: The Brits chose to leave the Euro, but the Pound chose to join the Euro.

Britain has never been in the Euro; you mean the EU? The pound hasn’t chosen anything, it’s being dumped due to the near-term uncertainty – I don’t think that’s a surprise. What is a surprise IMHO is that BREXIT won, that’s genuinely is stunning... no wonder the markets are having a cardiac over it...

Brah: Is it just me or does it not seem like all of the possible scenarios (French referendum, Cameron's replacement, etc. ) were not thought out enough for both possible outcomes and the ramifications, and now chaos will ensue?

The entire ‘machine’ [UK govt, EU, IMF, Obama blah blah blah] were issuing so many hysterical threats I honestly don’t believe they imagined such an outcome possible. Chaos will now ensue, the EU will ensure that it does. They played very high stakes in what they made an all-or-nothing game and they lost.
So the next question will be ‘who’s next’ again and then again... what ever happens the EU will be changed for ever. This is what happens to empires constructed outside of democracy, they end with a bang.

Brah: Cameron said in his speech there was a "clear" decision by the people, but like any number of recent US presidential elections, it was hardly clear when in fact it shows a country divided.

Yes, point well made. And the additional point that it shows how far the democratically elected UK leaders [just last year] diverged so far away from the wishes of the citizenry.


--- I wonder if anyone has produced a version of the 'Hitler in his bunker' video, re BREXIT, channelling Merkel ...

[Wd40]

WD: The GBP fall is limiting the FTSE fall. This is the joke: The Brits chose to leave the Euro, but the Pound chose to join the Euro.

Britain has never been in the Euro; you mean the EU? The pound hasn’t chosen anything, it’s being dumped due to the near-term uncertainty – I don’t think that’s a surprise. What is a surprise IMHO is that BREXIT won, that’s genuinely is stunning... no wonder the markets are having a cardiac over it...

I heard last week from an analyst on Bloomberg, that if Britain left the EU, pound would fall to parity with the Euro, so that would kind of be funny leaving the EU only to match your currency with the Euro so essentially leaving the EU but joining the Euro in terms of value.

But the Pound has held up quite well, Soros actually said that if Brexit were to happen it would be worse than black Wednesday( apparently referring to 1992)

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[JR8]

Won't be funny for EU companies that export into the UK, example Mercedes, BMW etc etc. The EU exports more to us than we import from them. They're the net losers. It also leaves them and not us in what is now revealed as a badly failing super-state. That is why EU markets have crapped themselves far more than the UK one has.
It's amazing the EU let it come to this, their arrogance is breath-taking; but they would not negotiate our membership terms *at all*. As a result of which they have reaped the whirlwind.

[Wd40]

FTSE has ended less than 2% down, this is remarkable considering the kind of shock that has been delivered today.

[JR8]

You said/quoted it yourself: The services trade deficit is much higher than the net surplus. This is why the EU [ex-UK] is hurting more than the UK is.

[JR8]

'Word of Thanks to the Person Most Responsible for Brexit: Angela Merkel
It’s time to pay tribute to the single person most responsible for the amazing Brexit outcome: German Chancellor Angela Merkel. Without Merkel’s stunning idiocies and stubbornness. In welcoming refugees with open arms. In making a deal with Turkey behind the backs of other EU leaders. In refusing to admit she was wrong on the refugee crisis. This outcome would not have been possible. Merkel calls Brexit a ‘Watershed for Europe’. I call it a rare victory of common sense over political stupidity. Nonetheless, I give credit where credit is due. Thank you chancellor for making this moment possible. She should resign now to get her head on straight.'
https://mishtalk.com/2016/06/24/word-of ... la-merkel/


Well, quite!

[x9200]

This perhaps is the 2nd most disturbing thing (after the equal split of the votes) of the Brexit voting:

[BBCWatcher]

That is so sad. The olds won't have to live with their decision.

Regarding German exports, we're talking about a 10 percent tariff if Britain wants to curtail EU/EEA immigration in anything except a mild disincentive way (Cameron's negotiated formula). That'll be the deal. German companies will continue exporting lots of BMWs and Mercedes to the United Kingdom with a 10 percent tariff. The U.K.-EU trade deficit will likely widen in the EU's favor in that event. The Leave side just never understood basic economics or even game theory, so their trying to predict "what Germany will do" are badly off the mark. Germany isn't going to stand for access to the common market without freedom of movement. Note that BMW builds tremendous numbers of cars inside the United Kingdom (the vast majority of MINIs, at Plant Crowley). BMW certainly doesn't have to, and (quietly) BMW fairly recently started building some MINIs in Austria. Do you think Austria (for example) is going to object to a 10 percent tariff on U.K. built exported MINIs, even if there's a 10 percent tariff on Austrian...strawberry jam (or whatever)? I don't.

I'm already reading reports of Britons (who are eligible) rushing to figure out which second (European) passports they qualify for (Irish passports, quite often), and to get them as fast as possible. EU/EEA immigrants who were on the fence about moving to the United Kingdom are now going to flood in (and without Cameron's negotiated disincentives -- they were torched with the Leave vote) before the gates close. Anybody living in the United Kingdom who doesn't have U.K. citizenship but who is eligible is at least considering it, so expect a flood of "forced" naturalizations (which already started before the vote). The people of Gibraltar are in a panic (something like 96% of them voted to Remain) because Spain will soon be free to make the border crossing as brutal as it wants since it'll become an external border, not an EU border. And brutal it shall make it. (One assumes the U.K. government will try to protect Gibraltar, but "good luck.") Gibraltar's only recourse may be to become part of an independent Scotland (and thus maintain EU membership, and better yet join Schengen and the customs zone). Northern Ireland is a thorny problem because there will likely have to be a customs border raised -- a border that was dissolved as part of the Good Friday Accords. When you ask the Leave campaigners about this, they say "Oh, no problem, we'll just use 'technology.'" Really?

What a royal mess this will be, at best. The least worse outcome (per the BBC's reporting/guesswork) is that the United Kingdom will emerge with a status more or less the same as Norway's, as an EEA member if not in name then in almost identical nature. But that would mean about 70% of what the Leave campaigners claimed would happen (immigrants!) would not happen. It would mean real, meaningful, bidirectional EU/EEA freedom of movement (perhaps with a veneer of Cameron-esque disincentives) only to maintain tariff free access to the common market -- and with almost zero U.K. influence over those trade-related rules and regulations. Anything less EU-connected and Scotland probably flies away with Gibraltar (and Northern Ireland customs zone problems become intractable).

As for the continent, I think they'll muddle through (as they usually do). New joiners to the euro will be on permanent hold, and some sort of emerging fiscal union within the Eurozone will happen. They'll get some near-term economic stimulus as various EU and corporate institutions relocate onto the continent (and into the Irish Republic), at least to hedge their bets. And they'll have absolutely no reason whatsoever to be anything more generous than "businesslike" in handling the United Kingdom's exit. In fact, EU countries and politicians will be sorely tempted to bash the Brits as their political way of dealing with right wing extremism in their countries. (I could use a stronger word than "bash.")

This vote reminds me in certain ways of the United States failing to join the League of Nations in 1920. The League of Nations was certainly a flawed institution. No doubt about that. But the Great Depression and World War II were worse. I don't think another war in Europe is likely (history would disagree with me), but like PNGMK I think the U.K. took a step in that direction on June 23.

[x9200]

That is so sad. The olds won't have to live with their decision.

It's not only that. Many older people tend to see changing reality through their own sentiments, old memories of the good times, rather than any solid reasoning. The problem is, the good time were good because they were young than, all was more simple and the world didn't run that fast. Nothing to do with EU. It's just the world that has changed and they have changed too.

[BBCWatcher]

FTSE has ended less than 2% down, this is remarkable considering the kind of shock that has been delivered today.

No, that's not correct. The BBC reports that the FTSE100 was down 3.15% on June 24 (at the close of regular trading, versus the close of regular trading on June 23). That doesn't sound so bad, but that was on the same day sterling fell over 8% against the U.S. dollar. In U.S. dollar terms the FTSE100 lost well over 10% in a single day of trading. And that's the index average. Bank and housing stocks (equities), in particular, were crushed on the 24th.

European markets were also down in similar fashion: somewhat less weakness in the euro, somewhat more weakness in the indices. In U.S. dollar terms, they were down about the same. And that makes sense. The uncertainty affects all of Europe, and the possible (or even likely) separation of the (currently) world's 5th largest economy for the world's largest trading bloc is bad for that economy and bad for the trading bloc. Everybody loses economically, in the real economy -- and that's the market consensus.

[BBCWatcher]

Nothing to do with EU. It's just the world that has changed and they have changed too.

This referendum became a flashpoint for every unrelated grievance anybody had. Granted, the Remain side obviously did not run a good campaign.

The United Kingdom genuinely had the sweetest deal in all of Europe: in the EU, and with huge power, but with every derogation the U.K. was ever going to get already granted. Nonetheless, the Leave campaign was happy to exploit the ignorance of voters who didn't know what derogations the United Kingdom had. For example, they talked about the euro endlessly and what a bad currency it is. It is a terrible currency union, agreed! Good news: the United Kingdom never adopted the euro and never had an obligation to do so, ever. But no, the euro is bad, so let's vote against EU membership! Another example: unemployment in southern Europe is terrible, EU bad. Yes, unemployment in southern Europe is terrible -- but WTF does that have to do with the ballot question? It didn't matter: the EU sux, vote Leave!

....Oh well. It's done. Let's hope this mess gets worked out as best as it possibly can in the circumstances. I was about to write that British voters will just have to live with their decision, but that's not even true. It's the younger voters, and their children, who will have to live with this decision, and they didn't decide this.

What a mess.

[valleyman]

Have been following the Brexit discussions very closely. Also, the US presidential campaigns. I read an article somewhere about the parallels and how the "right wingers" are taking over. In all these debates and discussions what I find strange is how the so called "liberals" are themselves so pig-headed and illiberal to accept any view that is contrary to their view of the world.

We had a so called right winger as the PM of India for the last 2 years. Contrary to the liberals and their fear mongering, he has been the best PM for India - ever.

I think a bit of control is not bad and UK(or whatever is left of it) will come out stronger. European business interests will force the EU leaders to settle for an amicable divorce. The sky is not going to fall!