Let's embrace the world: Why I'm voting Leave

[Steely Glint]

Everyone expected Corbyn to condemn or expel HIS OWN party members yes. Farage is not in Gove's Party. He is not in Gove's campaign group. How can Gove expel Farage from Vote Leave when Farage isn't a member of Vote Leave?

If a member of the Socialist Workers Party (SWP) makes an antisemetic remark then nobody views him as being Corbyn's responsibility despite being on the same side of a political divide.

I didn't say expel, I said condemn. Which Gove has done.

To be honest, if you're not even going to read what I write you can fuck off.

[Hazir]

While CEOs of other financial institutions like Hargreaves say the opposite. Funny that.

Congratulations on finding a hedgefund manager being in favour of voting out. I can't be bothered to compile a list of people running international banks who oppose it, but you and I both know that list would be much much longer. Amodean claims that these people don't know banking and probably have never worked in it.

You are certain you still want to defend that position?

[Timbuk2]

people talking about bank flight from UK in the event of Brexit obviously do not know what they are talking about, have never worked in the industry. If anything brexit will make British financial sector more attractive.

What would make London more attractive to the financial sector if it has less access to the EU markets?

Just based on the latest polling figures showing a lead for Brexit, the financial markets have taken a hit; UK Financials index has fallen faster than its European equivalent, cost of insuring debts rose to its highest level in 5 months as fears over the risk of those debts rises.

Wall Street Journal summed up the jitters on wednesday:

Investors Flee Banks in U.K. and Europe, as Brexit Jitters Mount

In addition to short-term market turmoil and share selloffs, analysts say, fears of costs for investment banks who may have to relocate their London hubs

LONDON—The beleaguered European banking sector is bracing for another hit to funding costs and profits should Britain decide to exit the European Union in next week’s referendum.

Illustrating investor concern, an index of major U.K. and European financials fell to its lowest price this week since the international market turmoil in February, a sharper drop than the broader European index. On Wednesday, the cost of insuring banks’ debt rose to its highest level in five months.

The moves, ahead of the U.K.’s so-called Brexit vote on June 23, come after recent polls have shown those planning to vote to leave the EU hold a lead of several percentage points over those who want to remain.

“It’s the well of uncertainty that’s opening up,” said Laith Khalaf, a senior analyst for U.K. investment manager Hargreaves Lansdown. “It could lead to a long period during which the U.K. and Europe negotiate what their new world is going to look like.”

Many banks from London to Athens are still burdened with toxic loans following the 2008 financial crisis and are grappling with slow economic growth, and a U.K. exit could exacerbate their woes. In addition to short-term market turmoil and share selloffs, analysts say, a U.K. exit would trigger one-off restructuring costs for investment banks in London who may have to relocate their London hubs, could sour banks’ loans to pan-European companies which could face new trade restrictions, and generally damp demand for credit.

Banks have declined to comment on how they could be affected by the vote. In a sign they are preparing for market turbulence, U.K. banks took advantage of an extra liquidity offer from the Bank of England this week to help them ride out any volatility related to a Brexit, tapping the facility for £2.46 billion ($3.47 billion) in extra cash in the first of three special repo auctions.

Among the banks that would be most affected by a U.K. exit would be Barclays PLC, said Joseph Dickerson, an equities analyst at Jefferies investment bank. Barclays has significant business with the rest of Europe through its London corporate- and investment-banking hub, and an exit from the EU could change business and regulatory parameters now in place. The bank’s shares were trading Wednesday about 9% lower than a week ago.

There are risks, too, to the retail-banking units at Barclays, Lloyds Banking Group PLC and Royal Bank of Scotland PLC.

“It would take longer for Brexit effects to trickle down to households, but the U.K. banks would be affected by a fall in property prices and jobless claims,” Mr. Dickerson said.

Investors in covered bonds issued by U.K. banks also are exposed, as the bonds may lose favorable treatment under EU rules, Moody’s Investors Service noted in a recent report.

That could imply higher capital costs for European holders of U.K. covered bonds, and therefore, lower demand.

Banks that have made London a home for cross-border investments and euro transactions, such France’s Société Générale SA, Germany’s Deutsche Bank AG or J.P. Morgan Chase & Co., would incur costs and disruption if they were to move from London to an EU financial hub. While some European cities could gain from their business, analysts and economists say the Continent also would face an economic fallout.

“A U.K. vote to leave the EU would be as much of a shock for the European economy as for the U.K.,” said Benoit Petrarque, an equity research analyst at advisory firm Kepler Cheuvreux.

The European economy could be affected if EU firms are restricted in selling to the U.K., and some analysts have said that a Brexit could undermine general confidence, with investors wondering if other countries might also consider leaving the bloc.

A Brexit would undoubtedly make things worse for the Southern European banking sector, say analysts, which already has seen margins shrink amid low interest rates, sluggish GDP growth and slack consumer demand.

The FTSE Italy Banks Index closed Tuesday at its lowest since 2013, down 14.2% from a week ago and nearly 52% from a year earlier, amid capital weakness, balance sheets burdened by bad loans and uncertainty over the U.K. vote. Italian lender UniCredit SpA has lost 56% of its value since the start of 2016.

In Spain, a U.K. exit also would chip away at the profits of Spanish lenders Banco Santander SA and Banco de Sabadell SA, if the British pound falls against the euro, analyst say.

Santander is vulnerable through its U.K. unit, which is the bank’s main driver of profitability, generating about one-quarter of the lender’s profits. Sabadell bought U.K. lender TSB Banking Group PLC last year to help counterbalance its reliance on Spain, where negative interest rates have squeezed margins and lackluster loan growth also has hit profitability.

Analysts say they are monitoring how the recent declines in the price of Spanish sovereign bonds—dragged down by investor wariness over “Brexit”—will affect Santander’s and Sabadell’s debt portfolios. The banks hold billions in Spanish sovereign debt.

...

[Loki]

http://www.bbc.com/news/business-36573757

Rand, where are you getting your financial market info from? It's clearly the exact opposite of reality...

[Asmodian]

1) Fear that the banks will loose access to the EU market in the event of Brexit is unfounded, unless you are really planing to forbid transfers to UK banks which is quite unrealistic and will likely lay the groundwork to destroying the financial system as a whole. Hong Kong, US, Singapore banks have no issues providing services to EU residents despite not being in the EU. I am not mentioning Switzerland because of its special status.

2) UK being out will mean that legislation can be more liberal and it already is the best within the EU, meaning it will be easy to do business with UK banks and require less bureaucracy.

3) Other then that, in my experience UK has long term established itself as a financial center providing competent services and secure environment and this not related to it being part of the EU if anything it is despite being part of the EU.

4) If this leads to UK not participating in automatic exchange of information (unlikely) it would be a great boost.

Bankers in general will oppose any change because it takes ridiculous amounts of funds to adopt to it but once they do there is little doubt that the share of UK financial center will not suffer although the profitability may take a short term hit.

[RandBlade]

I believe you misunderstand the thrust of the argument. While it appears to be a shallow appeal to authority it can equally well be viewed as an indicator of what these people believe will be in their best interests and in the best interests of their various fields. While Brexit is not a "physics question", Brexit's possible impact on the work being done by physicists in Britain is a matter into which British physicists and British universities may have some relevant insight. Dyson is not an objective altruistic expert, he's a self-interested private party who recently had his ass handed to him at least twice due to his opposition to EU energy labelling regulations that he feels unfairly disadvantaged his hoovers. You should look at the consensus in each relevant field and determine whether or not that consensus is persuasive from your perspective and from society's perspective as a whole. For example, there are those who accurately view the EU as being inimical to their interests eg. because of competition from low-wage workers from other countries. You'll have to decide whether or not your--and society's--interests outweigh the interests of those groups.

Indeed I read what Hawking had to say and it basically came down to two issues. Firstly funding, Oxbridge and leading science (like his) does well out of getting EU science funding. Secondly people - a lot of top scientists come from overseas in Europe using Free Movement. He is worried the funding could be cut or that people would not come over.

Except two issues with that logic. Firstly with funding we need to be careful listening to vested interests like that. Yes the EU are paying the bills today, good for him, but we are paying the EU's bills. That the EU spends about £150mn a week with us is no comfort for the fact we are spending £350mn a week (minus rebate) to the EU in order to get that back. If we cancel our payments to the EU we can pay the payments that are getting made currently and have change leftover.

As for migration I support getting migration and so too do Gove, Johnson etc - recently the government changed the rules I believe to exclude students from the count for net migration because we don't want to be discouraging students. Anyone Hawking wants to bring over should be able to get a visa if necessary.

[RandBlade]

http://www.bbc.com/news/business-36573757

Rand, where are you getting your financial market info from? It's clearly the exact opposite of reality...

I'm getting mine from the facts rather than journalists chasing an exciting and easy story that happens to be really twisted. On 11 Feb the FTSE closed on 5537, on Friday the FTSE with Leave leading in the polls the FTSE closed on 5950, the lowest it's closed in the last month is 5923.

Given that Leave only caught up and then overtook Remain in the last month why is the FTSE over 400 points up before today on what it was only 4 months ago?

[RandBlade]

I didn't say expel, I said condemn. Which Gove has done.

To be honest, if you're not even going to read what I write you can fuck off.

I did read what you wrote. Corbyn was made to suspend (not simply condemn) Livingstone or otherwise he'd be condoning what was said as acceptable within HIS party. It was relevant to Corbyn because he's in the same party.

Gove has condemned Farage not as someone from the same party, but someone who has fuck all to do with what Farage has to say.

[Loki]

And the reason you're using February as the starting date instead of when polls started putting Leave on top is? Other than sheer dishonesty, like the rest of the Leave campaign that is.

[Khendraja'aro]

1) Fear that the banks will loose access to the EU market in the event of Brexit is unfounded, unless you are really planing to forbid transfers to UK banks which is quite unrealistic and will likely lay the groundwork to destroying the financial system as a whole. Hong Kong, US, Singapore banks have no issues providing services to EU residents despite not being in the EU. I am not mentioning Switzerland because of its special status.

You obviously haven't read up on the relevant laws then. If you as a bank want to deal with EU citizens, you are forced to have an independent subsidiary company inside the EU.

Which means that the banks currently residing in London have two choices:
a) Create such a subsidiary (creating quite a lot of headaches concerning transfer of funds and stuff)
b) Move their headquarters somewhere else.

[Aimless]

Hong Kong, US, Singapore banks have no issues providing services to EU residents despite not being in the EU.

Yeah, partly due to being able to get authorised in the UK and then taking advantage of the passporting rights that will be far less certain in the event of a Brexit.

[Loki]

For some actual data: http://www.xe.com/currencycharts/?fr...to=USD&view=1M

The very prospect of a Brexit depresses the pound's value by about 4%. On June 10, polls come out pointing to strong gains for the Leave campaign. Next market day, the pound loses over 1% of its value. On the 16th, Jo Cox gets shot, weakening the Leave campaign. The pound instantly regains the 1% it lost the previous week. Over the weekend, we get polls showing renewed support for Remain. Pound gains another percent in value. The stock market is moving in tandem with the pound the entire time.

So are you guys smarter than the market?

[Aimless]

Indeed I read what Hawking had to say and it basically came down to two issues. Firstly funding, Oxbridge and leading science (like his) does well out of getting EU science funding. Secondly people - a lot of top scientists come from overseas in Europe using Free Movement. He is worried the funding could be cut or that people would not come over.

Except two issues with that logic. Firstly with funding we need to be careful listening to vested interests like that. Yes the EU are paying the bills today, good for him, but we are paying the EU's bills. That the EU spends about £150mn a week with us is no comfort for the fact we are spending £350mn a week (minus rebate) to the EU in order to get that back. If we cancel our payments to the EU we can pay the payments that are getting made currently and have change leftover.

As for migration I support getting migration and so too do Gove, Johnson etc - recently the government changed the rules I believe to exclude students from the count for net migration because we don't want to be discouraging students. Anyone Hawking wants to bring over should be able to get a visa if necessary.

So you're saying we should be wary of vested interests when those vested interests are competent scientists and educators talking about the advantages of EU membership for science and education in the UK, but take what other people with vested interests say at face value when they happen to be a hoover-manufacturer that'd benefit from reduced competition from European competitors?

Regardless, your assertion that you can "pay the payments that are getting made currently and have change leftover" must be taken with fistful of salt.

The £350 million figure is dubious as you well know. The rebate is applied before payments are made. Taking into account the money you get back from the EU budget, the number drops to well below £150 million/week. Much--if not all--of that will be eaten up by the increased costs of trading with the EU as well as by the reduction in trade, not to mention the extra NHS hospital you've promised to build every week.

In addition to the lower overall research funding, you'll have to deal with the problem of having funding becoming increasingly concentrated to some areas and projects while underfunded fields, where a little money can go a long way, will suffer. Top-tier scientists and teams will be able to do reasonably well even without the EU, but second-tier scientists will suffer, for better or worse. Even top-tier scientists risk getting sent to the back of the queue when it comes to getting access to important scientific infrastructure, as opposed to the priority access they often have now. Furthermore, the UK will cease to have an influence on the EU's science funding priorities.

With all that said, the letter signed by those 150 British scientists in favour of remaining in the UK was not an attempt to scare people into voting for Remain. Rather, it was an attempt to remind the publcic of the good the EU has done for science in the UK. You could say it's part of that "positive case for the EU" you apparently couldn't see anywhere, obv. for lack of trying.

[Khendraja'aro]

[RandBlade]

And the reason you're using February as the starting date instead of when polls started putting Leave on top is? Other than sheer dishonesty, like the rest of the Leave campaign that is.

I'm not I'm using February as the year's FTSE minimum (which it is) and that is BEFORE the polls started putting Leave on top.

So since the polls moved to Remain the FTSE is higher than it was in Feb.

[RandBlade]

For some actual data: http://www.xe.com/currencycharts/?fr...to=USD&view=1M

The very prospect of a Brexit depresses the pound's value by about 4%. On June 10, polls come out pointing to strong gains for the Leave campaign. Next market day, the pound loses over 1% of its value. On the 16th, Jo Cox gets shot, weakening the Leave campaign. The pound instantly regains the 1% it lost the previous week. Over the weekend, we get polls showing renewed support for Remain. Pound gains another percent in value. The stock market is moving in tandem with the pound the entire time.

So are you guys smarter than the market?

For some actual data: http://www.xe.com/currencycharts/?fr...to=USD&view=1Y

The variance in the last month is just normal variance that occured in January, February, March and April too, as well as Sept, Oct, Nov and Dec 2015.

Correlation does not equal causation, just because there has been a variance that correlated with poll leads does not mean it was caused by poll leads.

[Aimless]

I'm not I'm using February as the year's FTSE minimum (which it is) and that is BEFORE the polls started putting Leave on top.

So since the polls moved to Remain the FTSE is higher than it was in Feb.

That's just silly. Better (although not by much) to examine how the market seems to respond to apparently significant changes in the likelihood of a Brexit. By comparing only with Feb you're increasing the likelihood of seeing the effects of factors other than the referendum. Either way, any impact the coming referendum may have on the FTSE right now would largely reflect increased uncertainty on the part of investors rather than any certain conclusions. Everyone already knows a post-Brexit UK would be worse for business than it is now, at least for several years, but no-one knows how much worse or for how long or how much it'll cost.

[RandBlade]

No just looking at how the markets respond in a short-term glance without looking at the long-term is silly because it leads to the mistaken assumption that correlation equals causation. Correlation does not equal causation. Anyone who is making an assumption based on correlation alone is not seeing the woods for the trees.

If concerns over Brexit were really rocking the markets then you'd expect to see changes that were outside normal paramaters.

[Loki]

That's ridiculous. The random changes that occur would have pushed the pound and/or the stock market in either direction. The reality is that they pushed it in one direction, a direction consistent with the market fearing a Brexit. Virtually all the financial experts are saying the exact same thing. But as Khen's video says, fuck the experts right? Who needs experts when you have Farage and Johnson!

Edit: More "dumb" experts: http://mobile.reuters.com/article/idUSKCN0Z62FR

[Aimless]

No just looking at how the markets respond in a short-term glance without looking at the long-term is silly because it leads to the mistaken assumption that correlation equals causation. Correlation does not equal causation. Anyone who is making an assumption based on correlation alone is not seeing the woods for the trees.

If concerns over Brexit were really rocking the markets then you'd expect to see changes that were outside normal paramaters.

The data in the link Loki provided is not persuasive on its own, no. However, it reflects other information that is more persuasive, namely extremely high volatility in GBP (https://www.google.com/finance?cid=803827875203426) and signs of low confidence on the options market (https://www.poundsterlinglive.com/gb...options-market). I'm not sure why you're trying to make the case that the referendum hasn't caused significant uncertainty among investors.

[Hazir]

I must say it's quite amusing to see this from the sidelines.

I guess George Soros is also just another idiot who doesn't know what he's talking about.

[GGT]

Thanks for that, it was great!



Dear Rand,

While I appreciate your attempts to explain and justify your Brexit vote.....I don't think you've weighed the real and potential costs of doing so, and here's why:

Your "financial services industry" made London its center, but don't kid yourself into thinking it's because London can do things other nations can't. In fact (as Timbuk pointed out) England-based bankers and financiers benefit more from being IN the EU.

Which brings me to your "Let's embrace the world with Free Trade".....when we all know there's no such thing as "Free Trade". All trade is negotiated; putting the word free in the title only makes it sound better, for political purposes. If you leave the EU you'd still have to negotiate with other countries. One by one.

If you're concerned about heavy bureaucracies and red tape, leaving the EU won't solve that problem either. Instead, you'll be a small island (with its own bureaucracy and red tape) trying to compete on the global stage. No offense, but England doesn't have any "special" industry that can't be found somewhere else.

Your tourism industry might suffer too, and isn't that a big chunk of your GDP?

[Loki]

Britain (note: not England) isn't Bahamas.

[Aimless]

Tally so far: arguments based on trade significantly flawed (EU has existing and upcoming agreements with large markets outside Europe, UK can't hope to have the same for quite a few years at least and will initially be bound by unfavorable WTO-rules); arguments based on migration significantly flawed if continued participation in EEA is desired (continued free movement of people with the same hypothetical effect of displacement of non-EU migration, barring changes brought on by the UK simply becoming a less appealing place to live and work for EU citizens); arguments based on "freer" business flawed if EEA-participation is desired (all EEA directives, including those that don't only involve companies that directly trade with the EU, should be expected to apply); arguments based on accession to EFTA and EEA flawed (whether or not it will be possible and how difficult it will be is undetermined, esp. considering simultaneous desire for special treatment); arguments based on financial burden dubious at best (official net contribution lower than has been stated, calculations do not take into account positive effect of EU membership on the overall economy); scientists, universities and businesses representing an extremely large portion of the UK's scientific and economic activity have a positive case for remaining; markets are showing signs of considerable uncertainty.

Remaining arguments in favour of Leave: greater self-determination; UKIP may disintegrate, thus allowing Con voters to return to the fold.

Hope you'll vote to Remain in a few days RB

[GGT]

....or maybe he'll vote to Leave, which would be the weird equivalent of US voters picking Trump for POTUS....in order to blow the whole thing up, and start over?

[Steely Glint]

If a Remain vote isn't close, UKIP may disintegrate anyway. There won't be another referendum for a generation, so what are they going to do with themselves? "We should leave the EU!" "We had a vote on this and you lost, badly. fuck off"

We may also rid ourselves of Boris Johnson, who's made such a fool of himself this campaign I now have a hard time seeing him as prime minister.

The polls aren't suggesting a strong Remain win, of course. They're currently showing a slight remain lead, but they're basically neck and neck - but I'm prepared for the polls to be wildly inaccurate.

The Remain campaign is starting to do something that might actually be recognised as serious campaigning, hammering on the economic damage argument, and how most of the things Leave and UKIP would have everyone believe about the EU are simply outright false. But... hello? There's, like, a day to go. Maybe if they'd been doing this from the start we wouldn't be looking at neck and neck polls.

[GGT]

Britain (note: not England) isn't Bahamas.

Thanks for the correction, I got caught up in the "Great Britain" nomenclature.

[LittleFuzzy]

I must say it's quite amusing to see this from the sidelines.

I guess George Soros is also just another idiot who doesn't know what he's talking about.

Many of us in the US do frequently think that, yes. No more worthy of attention than his right-wing counterparts the Koch brothers.

[GGT]

Many of us in the US do frequently think that, yes. No more worthy of attention than his right-wing counterparts the Koch brothers.

Which begs the question----how DO people decide what's best?

[LittleFuzzy]

Which begs the question----how DO people decide what's best?

Frequently, partial information or even total ignorance, combined with gut-instinct.