Brexit What Happens Next Thread ---multiple merged threads.

[Bruce Banner]

2 minutes ago, crouch said:

They will restart QE to be sure but there have been growing doubts about the efficacy of QE for some time but, nevertheless they will try it.

Rates can't really be cut unless we go negative, which I wouldn't rule out but this would cause major trouble.

The net, net ,net of all this? If sterling does drop then they may well be forced to support it but will certainly resist that.

To demonstrate how IRs and QE have affected us since I retired 11 years ago... If I bought my annuity now, remembering I'm 11 years older and have been drawing my private annuity pension for 11 years, I still wouldn't get the 7.5% I got then

[crouch]

1 minute ago, jonb2 said:

Keep on blaming anybody but our fecking government. The EU and now businesses. Perhaps we should blame our farmers for most of them voting leave. Still won't stop a great deal of them going bust when tariffs are upended.

I'm not blaming them I'm merely saying that Brexit is a contingency and the function of management is to plan for contingencies. If bad weather is forecast they should plan for that; it's no different in principle. 

[jonb2]

21 minutes ago, Confusion of VIs said:

I suspect that is how Brexit itself will come to be viewed, even by the non hysterical. 

?

It will go down as one of the greatest historic declines ever. Putting Greece and Rome into the shade. Appearing in textbooks all over the world for centuries to come. History teachers will transfix their pupils with the story of how stupid a country can be.

Edited February 10, 2019 by jonb2

[crouch]

1 minute ago, Bruce Banner said:

To demonstrate how IRs and QE have affected us since I retired 11 years ago... If I bought my annuity now, remembering I'm 11 years older and have been drawing my private annuity pension for 11 years, I still wouldn't get the 7.5% I got then

Bruce, this is the huge and hidden cost of the last ten years. It will take time to percolate through but many who are crowing about how cheap their mortgage has been will be shocked when their retirement plans are torpedoed.

I've been retired nearly nine years (2010). If I had retired in 1990 I believe that with the same amount of money I would have received 2-3 times the pension I do receive. If I retired now I reckon I'd get 25% less.

[jonb2]

2 minutes ago, crouch said:

I'm not blaming them I'm merely saying that Brexit is a contingency and the function of management is to plan for contingencies. If bad weather is forecast they should plan for that; it's no different in principle. 

Fine if you know what weather. But they don't know whether it's a torrent of rain, a snowstorm, a hurricane or a dangerous heatwave thanks to the government.

[Confusion of VIs]

14 minutes ago, crouch said:

They will restart QE to be sure but there have been growing doubts about the efficacy of QE for some time but, nevertheless they will try it.

Rates can't really be cut unless we go negative, which I wouldn't rule out but this would cause major trouble.

The net, net ,net of all this? If sterling does drop then they may well be forced to support it but will certainly resist that.

Real rates can and will be significantly cut by providing liquidity in the form of cheap loans to banks. The headline rate will probably be cut back to near Zero but is less important than the rate the banks can lend at. Tough for savers but needs must.

The BoE is prepared to accept a large fall in the £, the further down it goes the shorter will be the recession.   

[Bruce Banner]

4 minutes ago, crouch said:

Bruce, this is the huge and hidden cost of the last ten years. It will take time to percolate through but many who are crowing about how cheap their mortgage has been will be shocked when their retirement plans are torpedoed.

I've been retired nearly nine years (2010). If I had retired in 1990 I believe that with the same amount of money I would have received 2-3 times the pension I do receive. If I retired now I reckon I'd get 25% less.

But they don't care because their, soon to be torpedoed, houses are their pensions.

[crouch]

1 minute ago, Confusion of VIs said:

Real rates can and will be significantly cut by providing liquidity in the form of cheap loans to banks. The headline rate will probably be cut back to near Zero but is less important than the rate the banks can lend at. Tough for savers but needs must.

The BoE is prepared to accept a large fall in the £, the further down it goes the shorter will be the recession.   

All this is hastening the final bust and putting up the real cost of living up. Although the BOE  have "looked through" inflation before I think the natives might well get more restless.

The banks of course may channel such loans into assets (read property) and exacerbate the trends of recent years but I think there is a limit to this finagling and the room for manoeuvre is less than you suggest.

[MonsieurCopperCrutch]

34 minutes ago, dugsbody said:

When the brexit vote came in I already knew interest rate cuts were on the way. They won't raise them to protect the Pound, they'll QE and devalue further.

Good for me. My debt is in GBP but my equity is in global funds.

I don't see it helping people buy houses.

It won't. Foreign money will flood in to pick at the carcass of the United Kingdom. Anyone with any brains is busy offshoring their finances. The little proles that were fooled into voting for this mess will be the ones left eating the grass at the side of the road. Let them eat sovereignty. 

[rollover]

1 hour ago, Bruce Banner said:

Someone on Sky News just said that a lot of MPs favour a no deal Brexit because they think it's closest to what the people voted for, but as it's not what's best for the people they won't get it. Democracy in action, the nanny state instincts are strong in these ones .

I don’t see it that way. The Someone could be wrong or intentionally misleading SKY viewers.

Instead, I think he/she could be related to the new Brexit party and trying to fish for new/old sympathizers and sponsors.

[crouch]

15 minutes ago, jonb2 said:

Fine if you know what weather. But they don't know whether it's a torrent of rain, a snowstorm, a hurricane or a dangerous heatwave thanks to the government.

The precaution is to stockpile and many businesses will already have done that.

[jonb2]

2 minutes ago, crouch said:

The precaution is to stockpile and many businesses will already have done that.

Repost.

I suggest you watch the video here.

https://www.bloomberg.com/news/articles/2019-02-07/brexit-is-nine-days-away-for-exporters-sending-ships-to-asia

[MonsieurCopperCrutch]

32 minutes ago, jonb2 said:

Keep on blaming anybody but our fecking government. The EU and now businesses. Perhaps we should blame our farmers for most of them voting leave. Still won't stop a great deal of them going bust when tariffs are upended.

One pertinent thing you will notice that when it comes to a leave voter, it is always someone else's fault. Never their own. Very telling. 

[crouch]

22 minutes ago, jonb2 said:

?

It will go down as one of the greatest historic declines ever. Putting Greece and Rome into the shade. Appearing in textbooks all over the world for centuries to come. History teachers will transfix their pupils with the story of how stupid a country can be.

When the EU is no more, in twenty years time, the subsequent textbooks will chronicle the hubristic decline of a utopian project that was pursued over the heads of those it was meant to benefit paying no regard to their wishes in a complete denial of democracy.

In particular the failure of the Euro will be seen as almost insane; a project that was known to be faulty and yet pursued, creating divergence with the EU and exacerbating the scandalous level of youth unemployment already existing.

Britain, which left the EU, will be seen as taking the wise decision to leave a ship that was already sinking and using the opportunity, and indeed the struggle, of leaving, to renew itself both politically and economically.

 

[crouch]

11 minutes ago, jonb2 said:

Repost.

I suggest you watch the video here.

https://www.bloomberg.com/news/articles/2019-02-07/brexit-is-nine-days-away-for-exporters-sending-ships-to-asia

Good video.

He made the same points I have made and of course he's right. But the context of both the article and the video are about lead times not costs. There are short term costs but the actual contingency can be met and should be planned for.

[GrizzlyDave]

1 hour ago, crouch said:

When the EU is no more, in twenty years time, the subsequent textbooks will chronicle the hubristic decline of a utopian project that was pursued over the heads of those it was meant to benefit paying no regard to their wishes in a complete denial of democracy.

In particular the failure of the Euro will be seen as almost insane; a project that was known to be faulty and yet pursued, creating divergence with the EU and exacerbating the scandalous level of youth unemployment already existing.

Britain, which left the EU, will be seen as taking the wise decision to leave a ship that was already sinking and using the opportunity, and indeed the struggle, of leaving, to renew itself both politically and economically.

 

Amen to that!

[Confusion of VIs]

1 hour ago, crouch said:

All this is hastening the final bust and putting up the real cost of living up. Although the BOE  have "looked through" inflation before I think the natives might well get more restless.

The banks of course may channel such loans into assets (read property) and exacerbate the trends of recent years but I think there is a limit to this finagling and the room for manoeuvre is less than you suggest.

Maybe but the end result of Brexit is still likely to be houses that are as high or higher measured in £s but worth less in $ or €.  UK invested savings are going to take a very big hit.

I think if there had been no Brexit interest rates would now be higher and houses cheaper than they are now.

Edited February 10, 2019 by Confusion of VIs

[jonb2]

1 hour ago, crouch said:

When the EU is no more, in twenty years time, the subsequent textbooks will chronicle the hubristic decline of a utopian project that was pursued over the heads of those it was meant to benefit paying no regard to their wishes in a complete denial of democracy.

In particular the failure of the Euro will be seen as almost insane; a project that was known to be faulty and yet pursued, creating divergence with the EU and exacerbating the scandalous level of youth unemployment already existing.

Britain, which left the EU, will be seen as taking the wise decision to leave a ship that was already sinking and using the opportunity, and indeed the struggle, of leaving, to renew itself both politically and economically.

 

Not going to happen.

Again, you have far too much faith in our politicians. The worst in Europe. Quite an accolade. We have a choice between self-serving maggots or 100% incompetence. And yes, I include the labour party in this.

[jonb2]

5 minutes ago, GrizzlyDave said:

Amen to that!

Are you a religious man Dave?

[GrizzlyDave]

2 minutes ago, jonb2 said:

Are you a religious man Dave?

No.

[jonb2]

1 hour ago, MonsieurCopperCrutch said:

One pertinent thing you will notice that when it comes to a leave voter, it is always someone else's fault. Never their own. Very telling. 

I wonder, faced with all the evidence that Brexit being a total shit-show with zero upsides why the justifications still continue. There must be a lot of social psychology students all over world beavering away on their thesis watching the UK captured by idiocy.

Edited February 10, 2019 by jonb2

[wish I could afford one]

2 hours ago, crouch said:

Why, when any business that exports or imports must have known this for many months? Any business should have been planning for a no deal scenario ever since late 2016. This is not a problem with Brexit; it is a problem with management.

So you're expecting every business that could be greatly affected by Brexit to expend precious resources (people and money) on trying to second guess what might happen and then put processes in place to deal with all those what ifs?

Personally, I think a better option would be for our politicians to grow a pair and make some decisions for the betterment of the country vs themselves and their party.  That way those said businesses can use their precious resources to figure out how better to take on their now very global competition.  Then if they have any left after that they might want to return some of it in the form of dividends to the shareholders, which includes our pension funds.

[Confusion of VIs]

1 hour ago, crouch said:

The precaution is to stockpile and many businesses will already have done that.

 

1 hour ago, crouch said:

Good video.

He made the same points I have made and of course h's right. But the context of both the article and the video are about lead times not costs. There are short term costs but the actual contingency can be met and should be planned for.

Stockpilng won't protect the likes of Honda, Nissan, and Toyota. If we get a no deal exit they will face tarrifs. on their components coming in and cars going out. Overnight they will become terminally unprofitable.

Forget what you hear about them stockpiling, that's to cover a few days of disruption if we get a deal.

Their no deal plans are, as far as is possible,  to use up all their stocks assembling cars ship them out and then close the plants for "maintenance". 

If there is a no deal exit, it is likely those plants will never reopen. 

Edited February 10, 2019 by Confusion of VIs

[wish I could afford one]

2 hours ago, dugsbody said:

When the brexit vote came in I already knew interest rate cuts were on the way. They won't raise them to protect the Pound, they'll QE and devalue further.

Good for me. My debt is in GBP but my equity is in global funds.

I don't see it helping people buy houses.

Yep

and the proles don't even notice they're becoming globally a lot poorer as each day progresses.

We already had our HPC.  I wrote about it in early 2013.  It's just unfortunate that those much loved strivers weren't invited to the party.

[wish I could afford one]

1 hour ago, crouch said:

The precaution is to stockpile and many businesses will already have done that.

Sounds like a great idea...  What happens when they then go cash flow negative?  In any business cash is king.  The aim is to reduce working capital not increase it.

Meanwhile their global competitors keep working on their business efficiency.