Uk Loses Aaa Credit Rating.

[Riedquat]

Brexit was an own goal. It was a vote against economic scale, which banks don't like and they got decimated yesterday. Manufacturing exporters don't like it either. You get better input pricing when you can negotiate in scale, and you also get better trade deals when you can export in scale. Renegotiation of trade deals could take many years. The EU is a political monstrosity but a very good economic idea. A very rich trade bloc, the richest in the world, with huge economies of scale. With a sound currency that did not require a tax base for support, it would be even better.

So you put up with that political monstrosity for a bit of money. Whether that's bribery or being held for ransom I don't know but it's the "greed and money are the only thing that matters" attitude that Remain has lost. Unfortunately they're still beyond grasping that the view that we should bend over for anyone with a bit of money in their pocket is not universally shared, thank heavens. It's sickening to see people defending it.

[zugzwang]

In the short-term , stocks like inflation. It makes debt cheaper and allows companies to borrow for capex. The pound got hammered, inflation expected , stocks now responding. Longer term inflation causes mal-investment, misallocation and rot.The weak pound is going to hammer foreign debt servicing and given our trade deficits and total debt(the highest in the developed world), much of which will be dollar denominated, that will harm our long term prospects.

Brexit was an own goal. It was a vote against economic scale, which banks don't like and they got decimated yesterday. Manufacturing exporters don't like it either. You get better input pricing when you can negotiate in scale, and you also get better trade deals when you can export in scale. Renegotiation of trade deals could take many years. The EU is a political monstrosity but a very good economic idea. A very rich trade bloc, the richest in the world, with huge economies of scale. With a sound currency that did not require a tax base for support, it would be even better.

Britain voted for political independence and that's fine, but it will come at a huge economic cost IMO. There may be no solutions left in this debt sodden world of central bank rigging, but for sure, economic isolation is the worst outcome.

Regulated markets are good for some things, not good for others. Free markets are expensive, inefficient and prone to collapse. There is no Invisible Hand.

Brexit was a triumph of hard-headed pragmatism over worthless intellectual abstraction. It leaves us free to impose tariffs on Chinese steel dumpers, reject the TTIP, re-nationalise the railways; choose whom we permit to settle.

The EU is an implacable bureaucratic tyranny, and an economic graveyard. By leaving now we will be better prepared for its inevitable demise.

[IMHAL]

So you put up with that political monstrosity for a bit of money. Whether that's bribery or being held for ransom I don't know but it's the "greed and money are the only thing that matters" attitude that Remain has lost. Unfortunately they're still beyond grasping that the view that we should bend over for anyone with a bit of money in their pocket is not universally shared, thank heavens. It's sickening to see people defending it.

You talk about ransom quite a lot. What we had with Europe is a bi-lateral agreement. We put something in and we get something out. Sure, all was not roses and it could be improved, same as everything.

We are not a prisoner - because we had the option to come out and we took it.

The only question that remains is was this a good thing to do?

Time will tell. When the IMF comes knocking at our door we will know for sure that it was a bad choice. If they don't then we got away with it.

The Leavers really have no plan at this point and all there promises seem to be fading away - its understandably a scary place to be - even for many who did vote Leave.

[InlikeFlynn]

An Article 50 fan chart would be a thing of reverential beauty.

Carney would, of course, remain vigilant

[evetsm]

So you put up with that political monstrosity for a bit of money. Whether that's bribery or being held for ransom I don't know but it's the "greed and money are the only thing that matters" attitude that Remain has lost. Unfortunately they're still beyond grasping that the view that we should bend over for anyone with a bit of money in their pocket is not universally shared, thank heavens. It's sickening to see people defending it.

The EU is a political monstrosity, but an economic prospect and us choosing economic Sackcloth and Ashes is a Pyrrhic victory to make a political point.

The principle of strong economies subsidizing weaker ones in a union for the greater good is nothing new. New York and California have long subsidized Arkansas and Louisiana.

There should have been strenuous lobbying and wrangling from within the EU. Nothing is impossible. Look what Thatcher managed to extract from Europe at the time, while remaining in the EU. There are now trade blocs all around the world, and then there's us. Disaster.

[Riedquat]

The EU is a political monstrosity, but an economic prospect and us choosing economic Sackcloth and Ashes is a Pyrrhic victory to make a political point.

The principle of strong economies subsidizing weaker ones in a union for the greater good is nothing new. New York and California have long subsidized Arkansas and Louisiana.

There should have been strenuous lobbying and wrangling from within the EU. Nothing is impossible. Look what Thatcher managed to extract from Europe at the time, while remaining in the EU. There are now trade blocs all around the world, and then there's us. Disaster.

So how long do you tolerate that monstrosity for? Unless it reforms all that would happen is that the pressure would keep building up and up which would just make the final explosion worse. It really isn't worth it, and if it ends up sackcloth and ashes I'll put the blame fairly and squarely on the heads of those completely over-reacting, because there's no sound reason for it to be that bad and only their determination to make it so will make it so.

Nothing is impossible true but with no sign whatsoever of anything other than pig-headed arrogance continuing from the EU, the entrenched attitude that its members exist for it and not the other way around, the odds of change are miniscule (and it really needs fundamental change at the heart of the EU, not just us getting exceptions). The disaster would be allowing that to continue.

[Riedquat]

You talk about ransom quite a lot. What we had with Europe is a bi-lateral agreement. We put something in and we get something out. Sure, all was not roses and it could be improved, same as everything.

I keep using the word ransom because that's what it is - if you don't stay you'll be crippled, and Remainers appear to be willing to sell their souls to the devil to avoid that. Yet dodging the pain now only makes the problem get worse and worse.

Analogies aren't 100% precise but there's no way that the EU was equal give and take. It's "you're here for us and we'll throw you a few crumbs every now and then." That simply had to stop, even if the cost was high (although there's no sensible reason to think that the final one will be lower than it looks, although you can never overestimate peoples' ability to make things far worse than they need to be). To say otherwise is just to be in denial. It would have been much, much better if it had stopped because the EU grew self awareness and lost its domination-centred arrogance and we stay in it but that was never going to happen.

[pig]

As a leave voter I was under no illusions that our almighty overlords were going to let us get away with this without dishing out some punishment.

Of course they`ll try and beat us into submission.

F@ck em

I`ve been sharpening my pitchfork

It's always Blame Somebody Else isn't it ?

[Sour Mash]

Wait 'til the likes of DB goes bust or there's another Greek crisis (or from another member state) .. potentially all at the same time.

Then the prospect of not being tied inextricably with the EU should take on a completely different perspective.

The short term blowback from the Brexit vote has been exacerbated by the fact that the markets totally failed to see it coming and thus got caught on the wrong side of a lot of bets, and is completely over-hyped by the likes of the BBC as if this one-off reaction is somehow now the trend.

[warpig]

Well said.

So you put up with that political monstrosity for a bit of money. Whether that's bribery or being held for ransom I don't know but it's the "greed and money are the only thing that matters" attitude that Remain has lost. Unfortunately they're still beyond grasping that the view that we should bend over for anyone with a bit of money in their pocket is not universally shared, thank heavens. It's sickening to see people defending it.

[warpig]

The point is Britain's contributions were greater than the benefits, both financially, democratically and socially.

You talk about ransom quite a lot. What we had with Europe is a bi-lateral agreement. We put something in and we get something out. Sure, all was not roses and it could be improved, same as everything.

We are not a prisoner - because we had the option to come out and we took it.

The only question that remains is was this a good thing to do?

Time will tell. When the IMF comes knocking at our door we will know for sure that it was a bad choice. If they don't then we got away with it.

The Leavers really have no plan at this point and all there promises seem to be fading away - its understandably a scary place to be - even for many who did vote Leave.

[curious1]

What if that happens (dB failure, Greece etc)during the brexit process... would we be on the hook for our share of the bill? Where's the cut off?

[evetsm]

The point is Britain's contributions were greater than the benefits, both financially, democratically and socially.

The market does not agree. The currency and bond markets dwarf the EU stipend payments. We've saved a penny to lose the pound.

Nice one.

[Kiwi Toast]

-

Edited June 28, 2016 by Kiwi Toast

[warpig]

Until we're out of the EU, we can be forced to lend other member states money. In 2015 the EU forced Britain to lend Greece £600 million and given Greece's credit rating, that's little more than a stealth bailout, it's not a loan. At best Britain will see 20p in the pound returned to these shores. The third Greek bailout is due this month or next.

What if that happens (dB failure, Greece etc)during the brexit process... would we be on the hook for our share of the bill? Where's the cut off?

[warpig]

Until the volatility subsides, you can't tell where supply intersects demand. The markets are awash with speculators in search of a quick buck. That said, the EU and it's member states are on the verge of bankruptcy, so yes it was a nice one.

The market does not agree. The currency and bond markets dwarf the EU stipend payments. We've saved a penny to lose the pound.

Nice one.

[Impatiently Waiting]

Until we're out of the EU, we can be forced to lend other member states money. In 2015 the EU forced Britain to lend Greece £600 million and given Greece's credit rating, that's little more than a stealth bailout, it's not a loan. At best Britain will see 20p in the pound returned to these shores. The third Greek bailout is due this month or next.

Well that's not true is it? The U.K. didn't bail out Greece via the EU but instead via an IMF loan.

Furthermore The UK had already struck a deal with the EU that we wouldn't fund any EU bailouts. The only two we ever funded was Ireland and Portugal at a total of €9 billion.

[evetsm]

Well that's not true is it? The U.K. didn't bail out Greece via the EU but instead via an IMF loan.

Furthermore The UK had already struck a deal with the EU that we wouldn't fund any EU bailouts. The only two we ever funded was Ireland and Portugal at a total of €9 billion.

And our bailout of Ireland was basically vendor financing. Saving one of our biggest trade markets(if not THE biggest ?). We probably would have also have done it outside of the EU.

[warpig]

I can't work out what your point is, but my point is Britain bailed out Greece, which you begrudgingly seem to agree with.

http://www.bbc.co.uk/news/uk-politics-33532485

Well that's not true is it? The U.K. didn't bail out Greece via the EU but instead via an IMF loan.

Furthermore The UK had already struck a deal with the EU that we wouldn't fund any EU bailouts. The only two we ever funded was Ireland and Portugal at a total of €9 billion.

[Limpet]

Well that's not true is it? The U.K. didn't bail out Greece via the EU but instead via an IMF loan.

Furthermore The UK had already struck a deal with the EU that we wouldn't fund any EU bailouts. The only two we ever funded was Ireland and Portugal at a total of €9 billion.

Bailed out German banks via Greece

[evetsm]

Bailed out German banks via Greece

and by extension bailed out The City. Jeez, it probably bailed out the entire world, given how everything is interconnected.

[SpectrumFX]

and by extension bailed out The City. Jeez, it probably bailed out the entire world, given how everything is interconnected.

Did we save the world?

You are Gordon Brown AICMFP

[long time lurking]

Meanwhile gilt yields fall to record lows. It's never been cheaper for the government to borrow.

Kicks all the economic doom and gloom off the field

[The Masked Tulip]

Well, the world has not ended yet.

[Oliver Sutton]

It leaves us free to impose tariffs on Chinese steel dumpers, reject the TTIP, re-nationalise the railways; choose whom we permit to settle.

Dream on.

http://www.dailymail.co.uk/news/article-3518278/UK-blocked-EU-bid-raise-China-steel-tariff-protected-industry-cheap-imports.html

"Britain led efforts to block EU tariffs that might have protected the steel industry in this country from a flood of cheap Chinese imports, it emerged yesterday."