Does anyone else sense a change of mood re Brexit?

[twofingerstoGideon]

I was rather astounded following the referendum that politicians of all shades weren't making noises about Brexit needing parliamentary scrutiny etc., but at last - after almost four months - it's as if people are waking up, noticing the shambles and saying "Hang on a minute... I'm not sure we should be doing this..." It was shocking to see the lack of reaction to the xenophobia and the way politicians of all shades seemed to be saying we had to blindly obey the very slim majority. The lack of disgust expressed by the press/politicians about the barefaced lies used by the Leave campaign (not to mention that poster) was also mind-blowing.

Has anyone else noticed a change in the air? I'm starting to feel slightly hopeful for the first time since 24th June that the country isn't just going to jump off a cliff in order to follow 'the will of the people'.

Anyone else, or am I deluded?

I think that's rather optimistic, the EU isn't in that perilous a situation and the UK is not that secure.

Smallfox,

Were you around in the Euro crisis?

Latest youth unemployment in Spain: 46%

Latest youth unemployment in Italy: 44%

Latest youth unemployment in Greece: 43%

Debt to GDP ratios continuing to go up at an alarming rate in southern Europe.

Why do you make that statement? Did you get my point about printing money? We can. They cannot without the agreement of Germany and the ECB, not something that can be assumed.

I know there are issues, but we have economic issues too. Our low unemployment rate is deceptive as so many people are in part time or low paid self employed. Our consumer debt ratio is very high. In terms of our , exports, the largest proportion of them are services and nearly 59% of our exports go through the EU or through their trade deals.

The ECB currently has negative interest rates and has undergone another round of QE. I didn't think the problem for the PIIGS countries was not being able to print mone, more like the interest rates had been too low for those countries for years.

Oh and also many of our imports are price inelastic, whilst our exports tend not to be. This makes the BOP even worse.

Smallfox,

Interest rates were not too low. Had they been they would have experienced inflationary expansion. They went into the Euro with their currencies locked in at much too high a rate, miles above PPP. They then could not compete and went into a death spiral. In addition, the wealthy (especially in Greece) did not pay any meaningful tax.

The problem is a money printing problem. If you remember, when Greece was in trouble, all the economic analysis went into what their Euro reserves were and whether they could make their next debt payment. Of course this then led to a higher price (i.e yield) demanded to lend them money, and off they went into a death spiral, ultimately broken by them being granted a package of money and the ECB supporting their debt (rather half heartedly).

We can never be in that position as the BOE can print as much Sterling as we need to make payments on the debt. Of course, that can (in theory) lead to a Zimbabwe with hyperinflation and a collapsing currency. But, we are a long way from that and, hopefully, always will be!

Yes, we have problems, but they are really minimal compared to southern Europe.

Just the slightest hints that Deutch Bank is in trouble is concerning. Deutch bank hold a lot of the debt and bonds from the ECB. Also if Italy needs a bailout then that will be even bigger news than Greece bailout.

A lot of economic analysis says that prior to 2008 there was inflationary pressure in the PIIGS countries and this was effectively caused because the ECB interest rate had been set too low. This is what caused the massive property booms. The inflationary pressures were there, they were just smoothed over by the availability to cheap credit.

Celeste,

I am not actually sure that an Italian bailout is affordable. It is the nightmare scenario for Europe.

Again, we are not anywhere near there yet. I just had a look and Italian 10 year bonds are at around 1.35%, so still no real short term concerns. Although, anyone buying Italian 10 year paper with that yield does need their head examined!

Smallfox,

Yes, globally low interest rates have led to global asset inflation. However, we currently don't measure inflation that way. Maybe we should? It is an ongoing argument.

How does cheap credit smooth inflation? I would have thought it would exacerbate it. If I can borrow cheaply, I can buy more and push prices up.

But if credit is cheap and easily available people don't start to complain about their wages not rising with inflation, they feel wealthy because their assets are increasing in value and then they borrow freely.

www.independent.co.uk/news/uk/politics/brexit-eu-david-davis-cloud-cuckoo-land-brian-unwin-a7372186.html

www.theguardian.com/politics/2016/oct/22/leading-banks-set-to-pull-out-of-brexit-uk

When they say banks relocating they don't mean entire firms. They mean some departments. The City of London is not going to turn into a ghost town.

I know, but the departments relocating will be the ones that export services, meaning that the level of our exports will fall.

Its not great news!

larrygrylls

Good to see you back.

To add, the 3% EU GDP loss isnt uniform and Belgium/Wallonia, France, ireland and Germany will be very unhappy about that.

Bottom line - which culture can take more pain? Not the French I would say. Germany probably can take more pain vs UK.

Hope mad people are not in charge.

When they say banks relocating they don't mean entire firms.

But nor do they mean the workers. Unless they have a non-UK EU nationality which would ensure visa-free travel in post A-50 Britain. Especially given the stance the UK is taking to curtail free movement.

It isn't uniform no. But still they're not king to grant us more preferential terms hand we would have in the EU and any pretence that this wouldn't negatively effect us more than them is silly.

m.youtube.com/watch?v=1rKWEUQBicw
Jorgen Klopp, Liverpool manager, refuses to speak to The Sun.

're: Jorken Klopp, I'm assuming it must be because of Lineker? If so it is relevant here.

No, I think it is about how the Sun covered the Hillsborough disaster-pure lies just to sell their trashy paper.

www.indy100.com/article/remembering-how-the-sun-newspaper-covered-the-hillsborough-tragedy-27-years-ago--WJ6XXbCobW

Why do you make that statement? Did you get my point about printing money? We can. They cannot without the agreement of Germany and the ECB, not something that can be assumed

Larry I really enjoy reading your posts. I also think the political leaders are pushing their peoples to the brink of tolerance. We already know of the rise of far right groups, across the EU but the leaders are seemingly pursuing an ideology at all costs for a super state.

In every way their needs are being put behind this bigger goal and I think it may be the final straw for them to now push UK away in the spirit of punishment when its German car makers who will suffer, its French cheese makers, and wine producers. How much more are these people willing to take all in the name of the EU superstate?

Germany is also the biggest exporter of cheese in the world.

Germany, France, Netherlands export considerably to countries outside the EU...

www.upg-bulletin-se.ro/archive/2014-1/4.Vlahovic_PopovicVranjes_Mugosa.pdf

the political leaders are pushing their peoples to the brink of tolerance. We already know of the rise of far right groups, across the EU but the leaders are seemingly pursuing an ideology at all costs for a super state.

In every way their needs are being put behind this bigger goal and I think it may be the final straw for them to now push UK away in the spirit of punishment when its German car makers who will suffer, its French cheese makers, and wine producers.

Agree. It's blind, it's single-minded, it's ignorant. They have a loyalty to their own 'nation' - that is a transnational grouping of politicians, bureaucrats, bankers and the community of non-government organisations like the UN, which they are seeking to aggrandise. It is not altruistic, or humanitarian. It's their own kind of nationalism.