Well look who's suddenly decided to raise his evidentiary standards :downcast:
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Well look who's suddenly decided to raise his evidentiary standards :downcast:
http://www.nytimes.com/2016/06/23/wo...sequences.html
Interesting piece on what the Brexit (the separation itself) would entail.
It goes further than that. In Switzerland it is the people who call for a referendum not the government. The UK referendums are more or less just Cameron trying to get the legitimization of his policies from the people instead of his own party.Quote:
Originally Posted by Hazir
http://www.bbc.com/news/business-36612776
More dumb experts, right Rand?
Not even experts.
http://www.bbc.com/news/business-36611512 Still no link, right?
Definitely a link right now. The markets are closed and the traders on now will overreact to everything.
And why do you suppose the pound falls on any news favoring Leave?
Because the traders are trying to make a profit/minimise losses on the cable while the markets are closed. It's basically people gambling right now.
Right, so the fact that any pro-Leave news leads to losses for the pound and any pro-Remain news leads to a strengthening of the pound is just a coincidence? Do you know how ridiculous you sound right now?
I said it's explicitly not a coincidence right now. The markets are closed, the trading that is happening is entirely due to the referendum. Clear?
Given that volatility for the pound has been higher in the run up to this election than it has been since the last major political event last year when it wasn't anywhere close I think it's safe to say that you're wrong.
Japan, Australia and New Zealand are open. Bankers all over the place are not sleeping.
Bankers never sleep Hazir, the cable for sterling runs 24 hours a day. At this time of night though it is very different types of traders to your typical daytime ones.
Expect massive volatility and overreactions tonight, I said that ages ago.
Actually, there were multiple reports of all the major firms in London telling their top traders that they're staying overnight today.
And if you look at volatility over time you will see that volatility has been extremely high well before tonight, peaking recently.
Of course they are! To trade based on the election result, not due to normal trading.Quote:
Originally Posted by Loki
My point was that the variance based on election trading is swallowed up by normal trading normally, the normal trade has been stripped out tonight this is pure speculation and election trade.
And why do you suppose the speculators dump the pound each time there's good news for Leave?
Because that's the mood. But it then bounces back by more credible traders rectifying the market to what is quite simply inconsequential margin of error movements.
It is ridiculous to attribute the extremely high volatility in the weeks leading up to the election on nothing more than "normal trading".
In addition to the antsy ones the gbp options market has signaled a belief in a dropping pound in the event of a Brexit for a while now.Quote:
Originally Posted by Loki
This is like debating with a Trump supporter. I give up.
I didn't. I said it was bouncing around but then settles back to within the bounds of normal trading.Quote:
Originally Posted by Aimless
Speculators are speculating absolutely so it is more volatile. But then there is a reversion back to mean afterwards. The "shocking" movements appear by looking at snapshots where an overreaction occurs before the market self-corrects back to what is more appropriate.
We'll see. There's been lots of crazy talk of stuff like a 40% fall in sterling if there's a Leave vote. Wouldn't surprise me if there's an overreaction at 9am in the morning but I bet by this time next month we're within the bounds of what you'd have expected even with a Remain vote.Quote:
Originally Posted by Loki
BBC business analyst making the point that volatility at the moment in forex is based on very small overnight volumes of trade.
https://www.google.com/finance?cid=803827875203426
Plus previously linked information about clear trend in options market.
We can draw two conclusions: forex markets see this referendum as significantly increasing risk associated with the value of the pound and have for a long time believe that a negative outcome would lead to a significant drop in the pound. The trends from recent months and weeks are perfectly consistent with what we've seen tonight.
That volatility index just demonstrates what I was saying. There have been overreactions to polling which has then been pegged back by saner heads. Same tonight the graph shows there keep being overreactions followed by bouncebacks. An overreaction followed by a bounceback is very volatile but that doesn't demonstrate that those who overreacted were right to do so, rather it shows that those who ensured it bounced back who represent the bulk of the market think they were wrong to do so.
If as seems increasingly likely there is a Leave vote overnight we'll see soon enough what tomorrow brings. I bet sterling doesn't finish 20-40% down as has been suggested and I further bet there will be an overreaction that then bounces back during the day.
What you don't seem to be understanding is that the sentiment is that Brexit should cause the pound to drop. Previously, cooler headed traders corrected the value for risk/uncertainty and overall the market believed in a slightly higher probability of a win for Remain. However the possibility of a Brexit was viewed as being associated with a drop in GBP. You're right, 40% is a ridiculous number, but just because someone came up with a ridiculous number doesn't mean that you can dismiss what the market has signaled that it actually believes. Yo until recently that was a slightly higher chance of Remain winning and that a win for Leave would cause the pound to drop a few percent (see earlier link for estimated drop).
https://twitter.com/graemewearden/st...49534879866880
2-3% was optimistic. Close to 6%.
Pound at levels not seen since 2009. Now that, rather than levels considerably higher than February this year, is significant.
I expect this is an over-reaction that will see a correction back before too long.