Actual economic effects...

[Spinflight]

FTSE closed on Wednesday at 6138. Closed on Friday at 6138.

Long term borrowing rates have come down as brexit appeared more likely, 10yr ones from 2% down to 1.09% post brexit. Similarly all the European long term borrowing rates rose sharply. Lesson? We are a less risky and more credit worthy outside the EU than in.

One ratings agency did drop our credit worthiness, though oddly the last time they did was out of fear of Eurozone contagion. Seems completely at odds with the long term borrowing rates, which matter quite a great deal given our debts.

The pound dropped, quite significantly. It appears however that there was some 'unusual' activity in the market which forced it down whenever the Leave campaign polled well. To the extent of trying to sell it when there were no buyers.

Some people lost a great deal of money, probably dwarfing the millions contributed to the remain campaign, lets hope it was Goldman Sachs and JP Morgan. :)

[QueenOfNowt]

Spin, thanks for this thread - and thanks, too, Youneedtobrush, for your post.

[smallfox1980]

Because its more informed than others?

What do you read Queenie?

[TheElementsSong]

That's a reasoned response to the news?

[Mistigri]

Why is anyone reading that rag?

The Standard Life story is the front page lead in the FT tomorrow, if you prefer a more upmarket source of news.

[TheElementsSong]

It was also on the BBC website earlier this evening
www.bbc.co.uk/news/business-36708844
not that it should have bloody mattered that the initial link was to the Guardian.

[wispaxmas]

I can't be bothered to read all the replies, but the FTSE doing well has a lot to do with being foreign currency earnings which have been hugely boosted by the pound dropping. Stats mean nothing in a vacuum.

[QueenOfNowt]

Hmm.. the BBC, the Financial Times & The Guardian.

Can anyone spot the correlation?

[smallfox1980]

Yes, your tinfoil hat needs adjusting. :)

[Mistigri]

nowt maybe you'd prefer the foreign press?

www.bloomberg.com/news/articles/2016-07-04/standard-life-suspends-3-6-billion-property-fund-after-brexit

www.irishtimes.com/business/personal-finance/standard-life-stops-investors-selling-out-of-uk-property-fund-1.2710444?utm_source=twitterfeed&utm_medium=twitter

[Roonerspism]

It depends on whether it is fear of fear. Property funds are very illiquid by definition.
In some respects this isn't unexpected and it will happen to others too because people take fright and invest elsewhere. Property funds will always be hit first.

There are more uncertain times ahead. But we are a long way from doom!

[QueenOfNowt]

Thanks, Mistri (although the Irish Times borrowed that from the FT, but I take your point). Will any of this affect the rental of my council house?

[Mistigri]

There is a Standard Life press release out there, if you want it from the horse's mouth.

It won't affect your council house rent (why should it?) but a large fall in commercial property values will affect private pensions.

[smallfox1980]

Oh and...a post brexit government, being Neo liberal and all, may suggest the sell off of council housing.

Don't want to worry you now.

[QueenOfNowt]

Mistri, thanks for replying. I rent my council house privately and don't have a pension. Will I be affected by this news?

[QueenOfNowt]

Small, I'm not in favour of any neoliberal government. Pre-Brexit, did we have one?

[sorenofthejnaii]

Will I be affected by this news

Well - the Government ultimately gets money in through a range of mechanisms including stamp duty. And it decides how to spend money. On pensions, local authorities etc.

Depends if you think this leads to less Government income or not?

[smallfox1980]

We had a mixed economy. Some markets are deregulated, some highly regulated, much infrastructure is nationalised as are institutions.

We are far more mixed than the US.

Coming out of the EU and escaping the "regulation" has been a dream of the neo liberals for a long time. Hence the backing from Murdoch, Rothmere, The Barclays etc.

The chair of JCB backs it because they got prosecuted for unfair practices.

We will be far more neo liberal outside of the EU than in, as I said, the EU regulates markets and has far stricter competition laws, as well as subsidising many industries.

Neo liberal is misused too. In actuality there is no such thing as a free market as all have elements of regulation, and the argument of "free markets" is used when the status quo suits those who want it to stay the same.

But we are going way, way off scale.

Essentially, some markets operate on a "free market" basis, others that provide essential services do not.

Geek alert

[CoteDAzur]

I'm a bit late to this thread, but thought it's important to correct a sentence in the OP:

"Long term borrowing rates have come down as brexit appeared more likely, 10yr ones from 2% down to 1.09% post brexit. Similarly all the European long term borrowing rates rose sharply. Lesson? We are a less risky and more credit worthy outside the EU than in."

UK Gilt rates came down because:

(1) Their prices went up (price and yield are inversely correlated) as investors were searching for a safe haven after Brexit.

(2) BoE pumped over £3bn into the market after Brexit to keep the markets from crashing and that money had to go somewhere.

(3) The market is pricing in a recession and expecting that BoE will have to cut interest rates soon.

It doesn't have anything to do with "We are less risky".

[QueenOfNowt]

Thanks, Small. I must confess I was being sardonic and so I apologise.

[CoteDAzur]

"The small and medium firms however just left their computers on and made a lot of money."

OP - I don't know where you heard this, but "just let their computers on" is NOT how funds are managed. I am actually that you think this is the explanation for how stock markets move up or down.

"Hence the rapid recovery from panic is I think down the algorithmically based trading"

Do you base this opinion on any actual facts, or is this the kind of speculation that you said repeatedly should not appear on this thread?

[smallfox1980]

Oh well. Can't tell with you really Queen.

[smallfox1980]

But if you were hoping for a more left wing style government outside of the EU and are a Lexiter then you truly are deluded.

[QueenOfNowt]

I most certainly am not a Lexiter, Small! They abandoned the working class a long time ago.

[smallfox1980]

Sadly again we'll have to agree to disagree.

The left wing under Blair did a lot for the working class, from the minimum wage, to better rights etc, upgrades in social housing, the EMA to give kids the chance to stay at school, the list is quite long.

However, all of that good has been dashed in the last 6 years.

I have to ask then Queen, what did you think you were getting?

[GoudyStout]

Interesting discussion on Radio 4 this morning that the FTSE indices bouncing around aren't a great reference point, it's more the intangible things like investment being delayed or cancelled that will be having the greatest effect at the moment.