BREXIT

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24 Aug 2016 2:41 PM by baz1946 Star rating. 2327 posts Send private message

Almost every financial brain around the world I have read believes Brexit is a huge loss for the UK people and its economy. You may think you know better but I think I know who is right.

How many 'Finacial Brains' have made a superb much up of the money systems they have held control over? More then any ten people have toes and fingers thats for sure.

I remember way back it being said that Phillip Green was a 'Finacial' wizard soon after buying BHS....Suppose he was if you count he knew how to steal peoples pensions, fiddle billions, avoid paying tax, put thousands on the dole, no doubt they said the same about Maxwell....Sounds about right for money wizards.

Chief economists at HSBC and UBS both agree Sterling will be at parity with the Euro by mid 2017 when the Brexit disaster gathers apace

How can they work out with any true certainty what will happen in 12 months time on something that has never happened before?

 

 

 





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24 Aug 2016 3:41 PM by Mickyfinn Star rating in Spain and France. 1833 posts Send private message

Investment bank economists give their expectations and forward guidance to their investors based on models and historical trends. They are right more times than wrong or they lose billions of their client’s cash and would not last long.

Historically Sterling hit Euro parity in January 2009 and made very little significant recovery for three years. The currency began its return to norms in 2015 until the referendum date was announced and has struggled ever since.

Tourist rates at airports are currently changing Sterling at parity, a sure sign of street expectation.

There are no winners with Brexit, it’s all lose, lose for the UK except for a bunch of died in the wool right wing politicians who landed cushy jobs they would normally never have.

The only rescue from the coming abyss will be agreement to join the EFTA and sign up for some degree of free movement of peoples. Hiowever the knarled old Tories won't have it.



_______________________
Time is the school in which we learn Time is the fire in which we burn. Delmore Schwartz.



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24 Aug 2016 4:31 PM by baz1946 Star rating. 2327 posts Send private message

Tourist rates at airports are currently changing Sterling at parity, a sure sign of street expectation.

So the tourist rate for Euro's, and the expectation of how it will be, is governed by what the currency exchange will give you at an airport, when even the UK Post Office is giving more then the airport.

 





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24 Aug 2016 4:45 PM by Sanchez1 Star rating. 853 posts Send private message

Tourist rates at airports are currently changing Sterling at parity, a sure sign of street expectation.

And 1.17 currently available on Transferwise!!  That's compared to the 1.15 I got with them last week...



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24 Aug 2016 5:12 PM by Team GB Star rating. 1245 posts Send private message

Team GB´s avatar

Airports have always been a rip off  - they will make as much margin as they possibly can on the mid price, they fix the prices (supprised they have not had their collar felt for this) so most UK airports are exactly the same. 

The next vulnerable events for GBP are when UK Gov announces the date on which they will trigger article 50 and then again when they actually do it  - I think there is a level of uncertainty priced in at the moment that Brexit may not in fact happen. - If it all goes ahead I'm sure it will be parity or worse



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24 Aug 2016 5:58 PM by Mickyfinn Star rating in Spain and France. 1833 posts Send private message

Another negative story for the UK is the pension’s deficit. Basically companies are struggling with their obligations to pensioners because of diminishing returns.

Their returns are reducing because of the central bank, the B of E is continuing with QE and interest rate cuts after Brexit to stimulate the flagging economy. Company stock values are based proportionally on the value of their pension fund which will eventually cause their share price to drop.

UK bond returns are now miniscule.

I hear European companies are now moving away from the banks in the City of London because they cannot guarantee continued funding within the single market. If the UK is excluded from the single market after Brexit, trade and services with Europe will incur tariffs.



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24 Aug 2016 6:34 PM by hughjardon Star rating in Jaywick Sands. 418 posts Send private message

hughjardon´s avatar

Most people I speak to are not bothered about all that investment bank stuff they are happy spending there money in the UK enjoying the nice weather good food and culture and not worrying about exchange rates and that will continue I think for a good few years

Tourist levels are at an all time high so a weak pound is positive for the UK ecconomy people are happier now and excited about the future everything looks fine so far

We will always have the doom and gloom under achievers brigade wasting there life worrying and been negative just avoid them I say

We should be proud of our country and what it has achieved with BREXIT and the Olympics I know I am

Live Hugh xx

 



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24 Aug 2016 6:42 PM by hugh_man Star rating in Kent/Roda . 1593 posts Send private message

hugh_man´s avatar

For pitys sake Micky Finn, bond yields are at historically low around Europe, did you not notive the massive QE the ECB has put in place.

As for Pensions, no major companies have to meet all there demand currently, deficits are met with ongoing input, none will have to pay out that amount in one go.

Have you also not noticed Germany is putting in place State Pension plans to retire 69 due to there funding problems





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24 Aug 2016 8:04 PM by tteedd Star rating in Hertfordshire & Punt.... 990 posts Send private message

Stock market up well beyond pre-Brexit.

Employment up.

Unemployment down.

Pound roughly on pre-Brexit trend so exports competitive.

Exports up.

Retail sales up.

Tourism up.

Revenue reports first monthly surplus since 2008.

Project fear prognosticators very quiet.





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24 Aug 2016 8:23 PM by tteedd Star rating in Hertfordshire & Punt.... 990 posts Send private message

The pensions problems have nothing to do with being in or out of the EU.

Some funded pensions are in trouble because of Gordons Brown's raid and some are in trouble because of employers taking pensions holidays.

Just think, in 1997 we had the best pensions system in the world. Some of the money Gordon robbed went to pay the the part of the EU rebate that Tony gave away.

Unfunded government and local government pensions cannot be funded for ever and will be in deep trouble if Mickyfinn's predictions ever come true. We would be in the same postion as Greece where it is reported that some pensioners are getting only 30% of their original predicted payments. But this may have been where we were heading anyway in the EU.

 

 





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24 Aug 2016 9:06 PM by hughjardon Star rating in Jaywick Sands. 418 posts Send private message

hughjardon´s avatar

Could not have put it better myself ttedd you are of course 100% correct and Mickey make it up as he goes along is wrong pensions are ring fenced example BT 11 billion deficit they would be Bancrupt if it was included on balance sheet most pension trustees are holding 15 year gilts purchased when rates were 8% plus and are 80% equity balanced so have benefitted from post BREXIT rally 

Mickey stop trying to worry people you add no value whatsoever to this site bloody doom monger you are 

I know I'm annoying and an arse hole but a happy arsehole

Love Hugh xx

 



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25 Aug 2016 11:06 AM by Mickyfinn Star rating in Spain and France. 1833 posts Send private message

For those of you who take this subject more seriously this is an interesting read.

Rupert Pennant-Rea in the FT today:

With apologies for asking the question yet again, what will the economic effects of the UK leaving the EU be? In the past fortnight, Brexit supporters have started to claim their optimism is being justified by a buoyant stock market and strong figures for jobs and shop sales.

If Britain in August participated in anything resembling political debate, “What was all the fuss about?” would probably have been the prevailing argument. The only honest answer to the question of Brexit’s effects is “Don’t know”, at least with any precision.

But the strongest clue has not come from the stock market or July’s unemployment and retail sales but from the currency markets. There, the message has been consistent and its implications have still to sink in.

On June 23, the day of the referendum, sterling reached a high of $1.50 and €1.31 shortly after polls closed. It then plummeted, and has since averaged at about $1.30 and €1.18. In trade-weighted terms, the pound is down more than 15 per cent from its level a year ago, when David Cameron, then prime minister, started the renegotiations that would lead to the referendum.

The foreign exchange markets are not always a reliable witness. They can be skittish, and their daily movements are sometimes impenetrable. But when rates move sharply and then settle for more than a month without second thoughts, their judgment shouldn’t be ignored. It is backed not by punditry but by many billions of dollars from in and outside the UK, so deserves more attention than it has been getting.

In essence, the currency markets are saying that all UK assets are worth less than they used to be. Land, property, companies, bank deposits, government debt — everything in the UK has been marked down against the rest of the world. Although the FTSE 100 has boomed, that is largely because its component companies earn most of their revenue and profits outside the UK.

Why do these international valuations matter to the average British household? Not many people are old enough to remember Harold Wilson’s fallacious message to the electorate when his government devalued sterling in 1967. “The pound in your pocket”, he claimed reassuringly, would not be devalued. Of course it was, and it has been again in the past two months, as every British holiday-maker abroad has already discovered.

But nobody should imagine that the traveller’s experience is an isolated exception. Indirectly, all Britons go abroad every day — to buy oil, food, clothes, Hollywood movies and much more. Imports are equal to roughly 30 per cent of UK gross domestic product, and if their cost goes up because of the vote to leave the EU, it is only a matter of time before everybody will be poorer.

The mechanism by which Britons will get poorer is through prices rising more than wages — in other words, a real-wage cut. That would cement the effects of a cheaper pound, and in a textbook world, sterling’s real devaluation would then make exports more competitive, so their volume would blossom while that of imports shrunk. In which case, Britain’s large trade deficit would fall; the economy would start to be rebalanced; in due course foreigners would be so impressed that they would again favour the pound, and its international purchasing power would gradually be restored.

Brexit: An experiment full of risk for British science

Can the UK craft new policies to keep its lead in research and development?

The snag with this happy prognosis is that it hasn’t happened before, at least not on a lasting basis. Seventy years ago the pound could buy $4.03, and it has been devalued periodically since then. Each devaluation produced a temporary fall in the real exchange rate, but it was not long before domestic costs started rising faster than the costs of Britain’s trading partners, and the advantage eroded.

Will this time be different? There is no reason to think so. In fact, a devaluation-powered improvement in Britain’s trade will be even harder to achieve if Brexit is reducing access to the EU’s single market and no alternative export markets have opened up to make good the difference. In which case, the message from the foreign exchanges is bleak. The British have become poorer than they were before the votes were counted on June 23, and that reality will become clearer as the months go by. Just when real incomes had started to recover from the sharp squeeze of 2009-14, they will be set back again.

The holidaymakers returning from abroad have already tasted what is to come. Whether getting poorer is what 52 per cent of the June 23 voters wanted or expected, it is what is happening.

The writer is a former deputy governor of the Bank of England and is chairman at Royal London

 



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Time is the school in which we learn Time is the fire in which we burn. Delmore Schwartz.



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25 Aug 2016 11:30 AM by steone Star rating in Santiago de la Riber.... 383 posts Send private message

What a brilliant article Mickyfinn.

It is nice to see facts instead of guesses. The writer was not making a political point for either side but stating FACT which has been in short supply since June 23rd.

Well done



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25 Aug 2016 12:57 PM by hughjardon Star rating in Jaywick Sands. 418 posts Send private message

hughjardon´s avatar

Well done again Mr Farage even Donald was impressed and me so much so I watched your EU post exit summary again to all those PLEBS in Brussels absolute classic https://www.youtube.com/watch?v=MlN9o3g-yuA

Who cares what sterling was worth in 1928 ABSOLUTELY IRRELEVANT from a failed never quite made governor and a knock on the door insurance man HO HO on 2 mil a year hes really gonna have to cut back

Love Hugh xx

 

 

 


This message was last edited by hughjardon on 25/08/2016.


This message was last edited by hughjardon on 25/08/2016.

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25 Aug 2016 1:03 PM by hugh_man Star rating in Kent/Roda . 1593 posts Send private message

hugh_man´s avatar

I'll bet the Greeks and even the Spanish wished that their currency was 15% lower to help with the uncompetitive problems they have suffered in Europe over the last 10 years.

Did I read something today re UK car production at record levels and Soc Gen Bank expanding in Canary Wharf and oh yes even Martin Sorrell a self professed remain campaigner suggesting things will not be as bad as originally thought after Brexit.

Choice

Buy a cheaper UK built Nissan creating UK jobs or

a now more expensive German built Merc





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25 Aug 2016 2:22 PM by BigAl2015 Star rating. 194 posts Send private message

**** BREAKING NEWS ****

The UK democratically chose to leave the EU, just thought I would let you know because it appears that some on this thread have not got the message.

No need to continue the 'doom & gloom' it's over get used to it.





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25 Aug 2016 2:26 PM by hughjardon Star rating in Jaywick Sands. 418 posts Send private message

hughjardon´s avatar

moderators lets close this post now it adds no real value yes



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25 Aug 2016 5:14 PM by Roly2 Star rating in Almeria. 646 posts Send private message

I don't think it should be closed.   I think it should be an ongoing reminder, as the UK begins to suffer, of what has now been inflicted on the British people.    And a reminder that those who will suffer the most are the young - who voted overwhelmingly to stay in the EU.     Of course anything that states the obvious, such as the indicators that you are crowing about are in fact negative indicators for the economy will be dismissed.   That is the way it is I am afraid.

 





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25 Aug 2016 6:30 PM by eos_moderators Star rating in España. 173 posts Send private message

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Thanks for the suggestion, but this topic will be on going for some time,  and we are sure it will be of value to many other members. 



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25 Aug 2016 8:18 PM by tteedd Star rating in Hertfordshire & Punt.... 990 posts Send private message

Basically the article quoted by Mickyfinn is saying ignor a whole plethora of positive indicators because the indicator that really matters is the exchange rate.

The problem with this is that the exchange rate has been trending downward for over a year and the current rate is just a continuation of that trend with a wiggle around the time of Brexit. It is not rocket science, just put a ruler on the chart and you will have to agree.

Now I'm not into 'Technical analysis' but the analyists are are getting exited because they believe the two recent turns (bumps) signal the bottom of the market and a third turn will see a bull market in the GBP.

So the truth is that the GBP is where you would expect it to be analysing the past years chart with or without Brexit. And if the Technical analysts are right you are likely to end up with egg on your face if you pin your doom projections on the exchange rate because you have nothing else.

I believe in the abilities and flexibility of my fellow citizens and that given adequate government we can easily outperform the EU in the medium and long term.

Don't talk the UK down.





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