Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Brexit

See all MNHQ comments on this thread

First Brexit employment casualties

616 replies

Stopyourhavering · 25/06/2016 15:02

dd graduated this week, happy times.....phoned this morning to say that 2 of her friends, who had also graduated ( business/law degrees) and been offered jobs had been telephoned by their prospective employers to say that because of Brxit, they were now basing their headquarters in Berlin rather than UK and would no longer be employing them......I fear this is just the start....I am so angry and upset for our youth. My ds and dd2 are so angry and feel betrayed....I wish 16 &17 year olds had been given a vote as I feel they had a better handle on the repercussions of Brexit

OP posts:
larrygrylls · 26/06/2016 16:37

Don't need to read about it. Traded through it and read many post mortems. The best one being 'fool gold' by Gillian Tett. You read it?

CoteDAzur · 26/06/2016 16:43

"one more link to help in your continued education of 2008 and all that. "Tis all about the CDOs (that is 'collateralised debt obligations')"

Oh thank you, larry. Much obliged. I love to learn about a subject I studied at Master's level and then worked at for many years from keyboard warriors whose claim to authority on the subject is having read a few websites Grin

Since you have heard of the term CDO, you might understand that the blame for the 2008 crisis rests squarely on the shoulders of US politicians, notably Republican Senator Phil Gramm who forced through the Gramm-Leach-Bliley Act that deregulated financial services in 1999 and Bill Clinton who signed it into law. This bill not only deregulated the industry in significant ways, but also blasted apart the legal separation between commercial banking, investment and insurance.

Everything else followed from there. Almost all of what you blame bankers for happened within (very misguided) legal framework.

CoteDAzur · 26/06/2016 16:48

"Typically some young spreadsheet jockey will run a model over hundreds of potential acquisitions. If the spreadsheet comes out with a black number, a salesperson will go to the CEO and CFO of the potential acquirer and persuade them to bid."

That is not AT ALL how corporate finance deals come about! Shock No salesperson has ANYTHING at all to do with M&As, and junior analysts don't come up with potential deals anyway.

I am flabbergasted that you can be so clueless about corporate finance (in theory AND practice!) and yet talk so much about it as if your opinions have any worth. It's unbelievable Shock

CoteDAzur · 26/06/2016 16:51

As for your M&A studies showing just how much money was lost through them: They are about the US and include the .com bubble where many high-value acquisitions were indeed made based on not much more than hope and dreams. Yes, many of those went bust or lost most of their market values. Not many of them because they had M&As, though.

larrygrylls · 26/06/2016 16:53

Cote,

Good insults but, once again, you fail to address a single material point that I have made.

Brilliant to blame the regulators as if, without being told not to, it is inevitable to act immorally.

I once employed a highly qualified Mba as a trader. Two weeks into work, he wAnted to know when he was going to start managing, as he knew it all already. You remind me of him.

Missinglalaland · 26/06/2016 16:57

Not sure which thread to post this link on:

www.vox.com/2016/6/25/12031254/no-brexit-article-50

With so much regret, are any of these options viable?

larrygrylls · 26/06/2016 17:28

Cote,

I cite studies, I refute your claims with evidence. You nit pick over who goes to see whom etc rather than the substantive weaknesses of the process.

Rather than linking to studies or mentioning specific books, you tell me to 'read some books'.

If you knew more about the subject you claim expertise in, you would attack the ball and not the man.

If London banks were innocent in 2008 how about you tell me what securities were held
In the sivs of the London banks to which you claim intimate knowledge.

AnyaJulia · 26/06/2016 17:41

Yes, indeed. My US company had two scenarios, one was expanding the EU HQ in the UK, the other one was relocating the HQ to Germany. The day after the referendum, the second plan was put in place. It does not mean relocating many people from UK to Germany, only European nationals will receive a relocation offer. Further recruitment will be within the EU, the UK people will either be offered a local (non-HQ) job, or laid-off. Internships within the UK have been cancelled. Generally speaking, closing companies is much easier in the UK than in Europe, where workers are much better protected. Extremely sad... why did this happen? Betrayed by politicians.

ManonLescaut · 26/06/2016 17:44

Any Cambridge graduate city boy knows that what you have cited as 'evidence' is no such thing.

You've apparently derived your smattering of info on the financial crisis from books & blogs.

Most just went on as normal Really? Lehmans?

And mansplaining bonuses to an ex-banker, seriously?

Don't bother rambling at me further, our discussion stops here.

AnnaMoon · 26/06/2016 17:46

They recruit locally, Europeans often speak 3 languages fluently, one of which English.

LadyRataxes · 26/06/2016 19:07

This seems to have gone slightly off track.
I thought the original question was whether Brexit was likely to mean that firms moved jobs/stopped expanding. Someone said that this wasn't going to happen as their friend had said not. I said that as far as I knew (based on working in a bank) all firms had plans ready to go - because of the probable lack of passporting/ability of european staff to work in London/other options available and would reduce headcount and there would be knock on effects. I fail to see how this is impacted by whether securitizations or CDOs caused the banking crisis, by how big bonuses are/should be and whether bankers spouses are as knowledgeable as bankers about banking.

Maybe you think a reduction in the financial services industry is a good thing and a loss in related/indirect jobs, corporation tax /income tax etc, is a good thing. It doesn't change the fact that post Brexit the only way is down.

But am really intrigued as to what Var accounting is - i've only been a bank accountant for 25 years though...

Girlgonewild · 26/06/2016 19:25

Yes, they all have Brexit plans ready. That is no secret.

The average British person hates bankers (which has been a pleasant change from their usual hatred of lawyers) and of course very unfairly.

However there is certainly an argument that growth is not good and that having more money or even as much as we have here does not make people happier and is arguably not sustainable anyway and that all we really need is water, food, shelter. You can make arguments either way. However most people are likely to feel financially worse off for Brexit. One reason a lot of the people who are less well off voted to leave is because they feel they have little to lose, minimum wage, benefits, can't improve their lives so anything is better (they think, wrongly) than what they have. In fact they risk a drop even in those living standards which they have now.

mathanxiety · 26/06/2016 19:33

Zurich is hardly an exciting place to live - how have they remained a banking centre, outside of the EU?

Zurich is a fantastic place to live and it is a hop and a skip from many other fantastic places, many of them right in Switzerland.

Plus Switzerland is remarkably stable through wars, revolutions and all sorts of calamities, and has capitalised on that to provide a global banking service for centuries.

LadyRataxes · 26/06/2016 20:06

banks were looking at places like Zug though which from my understanding is nothing like as nice as Zurich.
There is a motivation which needs to be weighed up- they won't want to move to a high tax jurisdiction (either company or personal)
I'm wondering what the impact of the Scottish position will be- as several banks have offices there - its easier to expand one than establish from scratch

PresidentOliviaMumsnet · 26/06/2016 20:12

Evening all
A reminder that Mumsnet's raison d'être is to make lives easier.
Please leave the personal attacks out of it and remain civil
Thanks

CoteDAzur · 26/06/2016 20:42

"Good insults but, once again, you fail to address a single material point that I have made"

  1. No insults that I can see. You just don't seem to know much theory or have any practical experience whatsoever about finance. That is not an insult.

I may be wrong, though. Feel free to tell us all about the formal education you have had in economics & corporate finance, and the experience you have in working in financial markets, if any.

  1. I have addressed your points. You can tell that by the way I have quoted them and then answered them in three successive posts.
Girlgonewild · 26/06/2016 20:42

I have been in Zug on business (pharmaceutical company). About 14% corporate and up to 23% upper rate of income tax. It was also lovely, covered in snow, very civilised. I could live there quite easily. Easier to go skiing than in London, that's for sure.

The country voted in the Tories knowing there would be this referendum. We have to live with the consequences of that. They are not going to be pretty but we just have to make the best ofi t and get along, tighten our belts, cut back and hang on for what is going to be a very bumpy ride.

TinySalmon · 26/06/2016 20:52

Did anyone have any sympathy for me when I graduated in 2009 in the middle of the worst financial crisis the world had seen since the 1930s? NO. But you know what? I didn't blame anyone or anything and got on with life - started in an awful job I was overqualified for and worked my way up. Has your DD not applied for other jobs? I'd also be sceptical of a company who is making rash decisions 3 days after the vote anyway Hmm

The U.K. will be fine in 6 months time and everyone needs to stop with the panicking. It's called an "economic shock". Jeezus, go read an economics book sometime or pick up a newspaper

Stopyourhavering · 26/06/2016 21:01

Tinysalmon.....thanks but my dd is not the one affected by this....it's her friends... She's off to do a PG teaching English as a foreign language at RG uni and come next year she'll be leaving this country to teach in SE Asia....can't say I blame her!

OP posts:
Schoolandstuff · 26/06/2016 21:24

Basic question from someone who doesn't know the answer and is happy to say so!! I get that we can't trade freely in financial markets within EU any more as not "Passported".

What I don't understand is why We have no issue trading with US/Asian banks when we are not part of any "club" with them. Is the issue that we will get there one day with the EU, as in have same relationship to trade as we currently do with US and Asia finance houses BUT that will take a long time and firms will lose money in the interim?

Thanks for any clarity!

mathanxiety · 26/06/2016 22:52

'...diversifying away from the se and finance...'

Yes. Without the shackles of EU work and environment regs the sky's the limit for manufacturing. Maybe James Dyson will find it cheaper to set up shop back in Blighty again. British labour could end up cheaper than labour in Malaysia, Mexico, Colombia, the Philippines, Indonesia, Bangladesh and other places where people don't need to make enough to heat their homes in the winter.

Meanwhile, back in the real world, a Nissan factory that exports most of its products to Europe may pack it in.

The heyday of British invention and manufacturing was the heyday of the British Empire. Conditions have changed a lot since then. If Britain is to return to manufacturing - and this would mean ordinary consumer goods - then Britain is going to have to figure out how to turn out products cheaper than it can be done in SE Asia.

People interested in buying Aston Martins are probably not concerned about tariffs. Aston Martin and other luxury item manufacturers are relatively well buffered. Nissan not so much. The whole country cannot be employed turning out Aston Martins however. There is s limit to the market, and it is not a brand that prides itself on being seen in everybody's drive.

  • 'I was and am a big fan of capitalism, but what we have is an entrenched elite enriching themsrlves at others' expense'.
  • 'capitalism is meant to efficiently allocate capital'

You can't simultaneously love capitalism and at the same time rail against how it works, decry the perversion of physics in service of greed while also ignoring the fact that capitalism is at bottom about greed, and naked self interest. How those ugly qualities are encouraged, tempered, and/or used for the greater good is what the political discourse that has developed since the end of the age of autocracy and the industrialisation of the west is all about.

Different approaches have all featured efforts to direct or channel the systematised expression of greed - within the capitalist west to put it very directly to the service of the common good in various degrees, or to go the other way and explain to people that there is a trickle down effect when an elite is enriched. The naked self interest element has been used strategically in the political sense as a means of turning former warring enemies into trading partners and shoring up the whole political system against an alternative form of materialism proposed by Karl Marx, via the Marshall Plan and then the EEC and the EU.

Instead of engaging with the promise of the EU to allocate capital efficiently for social engineering and geopolitical purposes as well as for wealth creation (they are all associated) Britain has decided to try to answer the question, 'How low can you go?' in terms of costs - this means primarily labour costs - and the associated question, 'How high can it get?' in terms of profit for those willing to invest, because without the motivation of greed why would anyone bother getting involved - we are talking about businesses here, not charities. Not even the US brand of capitalism, the least Socialist system in the west, has thrown off all semblance of commitment to the welfare of those on the lowest rung the way the Leave vote effectively has.

  • 'Brilliant to blame the regulators as if, without being told not to, it is inevitable to act immorally.' The existence of regulations and regulators (and laws in general, and prisons, and crime statistics) should make you suspect that there is a huge temptation to act immorally. It only takes a few immoral actors and a few loopholes, and disaster can ensue.
HelenaDove · 27/06/2016 01:00

Fab post math.

I think a lot of people need to get ready to hear the phrase "we havent got the funds now" as a mantra.

It will be used a lot by employers and landlords even if they do have the funds........when it comes to employees pay rises/Christmas bonuses and when it comes to tenants wanting repairs.

It happened to a relation and a friend of ours after the 2008 crash,

In some cases they will be speaking the truth but some will use it as an excuse.

larrygrylls · 27/06/2016 06:11

Math,

The people who control efficient capital allocation should be business owners. We also do need regulations to ensure a fair playing field. The problem is that pension funds don't vote their shares in the interests of the shareholders, but in the interests of their mates in banks who advise and entertain them (and also frequently end up employing them).

The most egregious example of this was the rbs/Abn amro merger in the teeth of the financial crisis. 90% of the shareholders at the mrerting voted against it (as it was clearly a disaster). 80%+ of institutions nodded it through, showing complete disdain for shareholder value.

I personally think we can compete in the high end/luxury sector, allied to services. We cannot just rely on Europe to allow us to sell non competitive goods and all sink together. I am afraid (from your perspective) we may end up more like the states, with less worker protection, but otherwise we are deluding ourselves.

I repeat what I wrote earlier. Europe's share of global gdp has halved since the 80s. Being a member of a rusting club is nothing to take pride in.

CoteDAzur · 27/06/2016 07:31

"Brilliant to blame the regulators as if, without being told not to, it is inevitable to act immorall"

You would be right if we were talking about murder and rape - immoral stuff that nobody should tell anyone not to do.

But is it immoral for insurance companies to get into the mortgage business? Is it immoral to bundle mortgage-based securities into traceable assets? No. This is not about morality at all.

mathanxiety · 27/06/2016 08:13

In other words Larry, the problem with capitalism is the people.

Wrt global trade and how everybodys' books look, the rise of China has caused a major adjustment.

The UK is most certainly heading at full tilt towards the destiny of becoming a US style workers' paradise (i.e. not a paradise for workers). The current incarnation of the Tory party (and the Blairites before them) is the number one fawning fan of all things American, importing and swallowing whole a multitude of American theories and models and postures, from phonics for four year olds to war in the Middle East to sanctions against Russia, without examining the damage any of it was doing in the American context, and without seeing if any of it was a good fit for the UK. Phonics was tried out on American children at least a year older than those who must now work hard at it in Reception classrooms in the UK, but it is claimed to be evidence-based nevertheless. War in Iraq and elsewhere was Britain's chance to play with the big boys and pose as a global player, and it was eagerly seized. Sanctions were imposed on Russia even though the looming EU referendum might mean Britain would end up casting around for trading partners. Assets were seized. Bridges may well have been burned that will take a while to repair.

Watch out for 'Right to Work' policies and for Wisconsin style crippling of public service unions and the erasing of public service pensions, coming soon.

To give them their due, the Tories did ignore US advice to go easy on the austerity and to maybe try a little more spending the way out of recession. Some also split their party in campaigning against the PM, and their future leader will probably be a man who openly pushed back against quite outrageous attempts by US leadership to influence the British vote. It seems to me that the wisdom of the sort of infrastructure spending that the US undertook as an antidote to recession may now be clear to the Remain leadership, a little late of course. Job creation is important.

Focusing on the luxury market is not going to do that on the sort of scale necessary. Luxury brands tend to have long pedigrees and they are luxury brands because they are not ubiquitous.

Services are competing in a global marketplace that includes China, India, Russia, South Korea, the US, and now the EU is a competitor too. Now at least the UK (what's left of the UK - I might be talking about England and Wales ultimately) has the option of sinking alone.

90% of the shareholders at the mrerting voted against it (as it was clearly a disaster). 80%+ of institutions nodded it through, showing complete disdain for shareholder value.
An apt analogy for the Brexit vote in many ways.