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Fri Jun 24, 2016, 09:43 AM

I can't help but think all of the angst over the UK/EU referendum is a bit overblown

It's not like the British navy will fire on Brussels or that trade won't normalize. Frankly, I'm at a loss to understand the market and currency response. It all seems much ado about nothing.

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Reply I can't help but think all of the angst over the UK/EU referendum is a bit overblown (Original post)
Nuclear Unicorn Jun 2016 OP
La Lioness Priyanka Jun 2016 #1
Armstead Jun 2016 #5
La Lioness Priyanka Jun 2016 #11
cherokeeprogressive Jun 2016 #24
La Lioness Priyanka Jun 2016 #34
Armstead Jun 2016 #27
La Lioness Priyanka Jun 2016 #33
Odin2005 Jun 2016 #31
Spider Jerusalem Jun 2016 #2
Silver_Witch Jun 2016 #3
libtodeath Jun 2016 #4
uponit7771 Jun 2016 #7
Odin2005 Jun 2016 #32
whatthehey Jun 2016 #6
Recursion Jun 2016 #8
Nuclear Unicorn Jun 2016 #9
Recursion Jun 2016 #10
Nuclear Unicorn Jun 2016 #13
La Lioness Priyanka Jun 2016 #12
Nuclear Unicorn Jun 2016 #14
La Lioness Priyanka Jun 2016 #16
Nuclear Unicorn Jun 2016 #17
cherokeeprogressive Jun 2016 #25
Nuclear Unicorn Jun 2016 #26
Humanist_Activist Jun 2016 #29
randome Jun 2016 #15
Nuclear Unicorn Jun 2016 #18
randome Jun 2016 #19
Nuclear Unicorn Jun 2016 #22
TexasMommaWithAHat Jun 2016 #28
Humanist_Activist Jun 2016 #30
Recursion Jun 2016 #38
treestar Jun 2016 #20
greatauntoftriplets Jun 2016 #21
Nuclear Unicorn Jun 2016 #23
Xolodno Jun 2016 #35
spanone Jun 2016 #36
Hekate Jun 2016 #37

Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 09:45 AM

1. Have you read all the predictions by economist prior to this vote?

 

Might help explain the current panic.

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Response to La Lioness Priyanka (Reply #1)

Fri Jun 24, 2016, 09:52 AM

5. Same economists who.....

 

have been selling us snake oil for decades and who helped to cause the problems that caused the discontent that built up to a point where people voted for such a dramatic move in protest of the "free market uber alles" con game?

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Response to Armstead (Reply #5)

Fri Jun 24, 2016, 10:04 AM

11. Actually most academic economists are pretty left leaning

 

Much like krugman. It is a social science after all.

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Response to La Lioness Priyanka (Reply #11)

Fri Jun 24, 2016, 11:44 AM

24. One would think that after all this time economists would have gotten something right, huh?

 

Books and books and books are written, and the problems get steadily bigger and more complex.

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Response to cherokeeprogressive (Reply #24)

Fri Jun 24, 2016, 01:48 PM

34. ofcourse problems get more complex. we live in a complex where everyday we add more and more

 

variables.

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Response to La Lioness Priyanka (Reply #11)

Fri Jun 24, 2016, 12:49 PM

27. Depends on how one defines left-leaning

 

In the recent primary, Krugman showed how thin skinned and emotional they can get about challenges to their own particular form of "social science"

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Response to Armstead (Reply #27)

Fri Jun 24, 2016, 01:33 PM

33. Just cos he refutes sanders arguments doesn't make him wrong or thin skinned

 

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Response to Armstead (Reply #5)

Fri Jun 24, 2016, 01:24 PM

31. Most economists are center-left Neo-Keynesians.

RW Monetarists are a minority and the Austrian School crackpots are a derided fringe.

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 09:48 AM

2. It's got potential serious consequences

up to and including a domino effect if other EU countries decide to hold referenda of their own. Which would be the end of the EU, probably. Which would be chaos, in terms of the global economy. It's definitely not "much ado about nothing". (And major economy, home of a global financial centre, votes to leave the world's largest trade bloc with serious effect on finance and trade? Of course there's a currency and market response! There's a lot of uncertainty and a lot of major companies are looking at pulling out of the UK.)

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 09:49 AM

3. Just another good excuse to crash the market!

 

So little investors loose and the rich can buy up stock!! Isn's it great!!!

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 09:50 AM

4. It signals a recreation of a nationalistic Europe and all the problems that led to WWII rising again

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Response to libtodeath (Reply #4)

Fri Jun 24, 2016, 09:53 AM

7. +1, it started with BRITAIN!!!

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Response to libtodeath (Reply #4)

Fri Jun 24, 2016, 01:26 PM

32. That is the thing that strikes the most fear into my heart.

Mark my word, a reversion to Nationalism in Europe WILL drag the world into World War 3.

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 09:53 AM

6. Well it's certainly going to hit UK businesses

A few points of GDP is likely. But yes it's a panic that, say, Barclays is 25% less valuable than yesterday. The US impact will be much smaller. Minor drop in exports to the UK as the pound is worth less and Brits have fewer of them but no dramatic impact. It's not like the British will absolutely stop seeing Hollywood movies or using soybeans.

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 09:55 AM

8. The basic outcome is that Britons will be poorer, which is going to be pretty bad for the world

economy. They'll also probably lose many of the labor protections EU membership required. That will also be bad for the world. They're still a significant economy.

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Response to Recursion (Reply #8)

Fri Jun 24, 2016, 10:00 AM

9. Why would they be poorer? Are the people who consume British goods and services suddenly

going to stop or take their business elsewhere. If anything the drop in the British pound makes British products more attractively priced.

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Response to Nuclear Unicorn (Reply #9)

Fri Jun 24, 2016, 10:04 AM

10. Several reasons. The big number one is that immigration will drop

1. Immigration will drop. This will hurt the entire British economy.

2. UK will have to come to the EU, the US, and really every single country in the world, bowler hat in hand, asking for a new trade agreement, and every one of us will know that they have a 2-year time limit on the negotiations, and they haven't had a trade representative or trade negotiation staff in decades so they'll be staffing that from scratch. How advantageous to the UK do you think those trade deals will wind up being?

3. Finance is a huge part of their economy and they're going to lose a lot to Frankfurt and/or Amsterdam.

Several more come to mind. Basically, despite what people scream online, trade is really, really good for the economy, and this makes trade harder.

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Response to Recursion (Reply #10)

Fri Jun 24, 2016, 10:25 AM

13. If there is a labor shortage wages will rise.

Trade agreements happen all the time. Again, demand for British products isn't going to evaporate. None of this is worth a trade war and we had agreements before.

As for financial markets, either they can perform or they can't. Financial services are just another commodity consumers buy or not buy. Currency markets either represent economic worth or they reflect manipulation through currency policy. In the latter case exposure would be for the best.

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Response to Nuclear Unicorn (Reply #9)

Fri Jun 24, 2016, 10:12 AM

12. Well atleast in part because they just decided to break away

 

From their major trading partners. A lot of British goods are imported into the eu,

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Response to La Lioness Priyanka (Reply #12)

Fri Jun 24, 2016, 10:29 AM

14. Consumer demand on either side hasn't changed. Is the EU going to impose an embargo?

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Response to Nuclear Unicorn (Reply #14)

Fri Jun 24, 2016, 10:42 AM

16. There is nothing so unique to British goods that cannot be replicated in the rest of Europe

 

While there won't be an embargo, the trade would be less smooth and likely less beneficial to Britain. Aside from that London as a financial center power will diminish, likely moving to Amsterdam or Berlin. It's going to be a cluster fuck.

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Response to La Lioness Priyanka (Reply #16)

Fri Jun 24, 2016, 11:01 AM

17. Why would that happen? Those making these predictions are speaking for a very diverse

and complicated market. I can't help but think that the people who have been doing business heretofore will be content to continue doing something -- especially if the Pound is now a better bargain.

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Response to Nuclear Unicorn (Reply #14)

Fri Jun 24, 2016, 11:46 AM

25. There was an OP last night about how the Brits should be made to suffer for their impertinence.

 

It got recs. I thought it was hilarious.

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Response to cherokeeprogressive (Reply #25)

Fri Jun 24, 2016, 11:58 AM

26. All those who claim to worry so much about the UK economy are free to

petition for the US to sign a generous trade agreement with the UK.

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Response to Nuclear Unicorn (Reply #9)

Fri Jun 24, 2016, 01:15 PM

29. Forget trade for a moment, what about the subsidies the U.K. received from the EU?

 

Apparently much of the money for development and improvments in Wales(particularly Cardiff) and elsewhere was money provided by the EU. That source of income and investment will dry up in the next two years, and will Westminster be able to take up the slack? Unlikely.

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 10:32 AM

15. Their stock market just crashed. Their pension funds are worth even less now.

 

And prices will go up as the British Pound is further devalued. What's not to like about that?

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Response to randome (Reply #15)

Fri Jun 24, 2016, 11:08 AM

18. It won't stay that way. People act as if this is the final round and we have to compare scores.

It isn't and we don't. Life is continuing on as it always has.

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Response to Nuclear Unicorn (Reply #18)

Fri Jun 24, 2016, 11:16 AM

19. If Brexit stands, I think it will be a long time before Britain recovers, if it ever does.

 

The United States is stronger with its states united. Europe is stronger with its nation-states united. A united economy strengthens that relationship. A two-tired economy or one that is considered second-rate by the rest of the world will benefit no one.

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Response to randome (Reply #19)

Fri Jun 24, 2016, 11:40 AM

22. The EU is little more than a giant currency manipulation scheme. It's nothing

comparable to the US. Not politically, culturally or economically.

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Response to Nuclear Unicorn (Reply #22)

Fri Jun 24, 2016, 01:10 PM

28. Bingo.

nt

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Response to Nuclear Unicorn (Reply #22)

Fri Jun 24, 2016, 01:16 PM

30. That shows how little you know about the EU. n/t

 

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Response to Nuclear Unicorn (Reply #22)

Fri Jun 24, 2016, 09:53 PM

38. Wow, that's probably the most wrong thing I've read on this

It's a customs union that allows free movement of people, capital, goods, and services. You may be thinking of the Eurozone, which is different from the EU. The EU has no monetary component, and the UK isn't in the Eurozone.

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 11:17 AM

20. I think you are right

It's like the daily drama for the day. And of course we have people making it about our election or about Bernie, or whatever their obsession is.

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 11:24 AM

21. It was a victory for the right wing, which backed it.

Both Trump and Putin are strong supporters of Brexit.

The pound is crashing on U.K. vote for Brexit
by Ivana Kottasova @ivanakottasova


The British pound crashed to its lowest levels in 31 years as the country voted to leave the European Union in a historic referendum.

The pound dropped below $1.35 for the first time since 1985. The currency fell as much as 11% and was on course for its biggest one-day fall ever. It was down against all major world currencies.

The U.K. is first country to vote to leave the European Union. Prime Minister David Cameron resigned Friday, saying he would hand over to a new leader in about three months.

Stocks markets around the world are also falling sharply after the campaign to leave the EU won Thursday's referendum.

"It is vile and ugly out there, the British pound is facing its worst day ever," said Naeem Aslam, chief market analyst at ThinkForex.

http://money.cnn.com/2016/06/24/investing/pound-crash-eu-referendum/index.html?iid=hp-toplead-dom

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Response to greatauntoftriplets (Reply #21)

Fri Jun 24, 2016, 11:41 AM

23. If I considered them competent leadership that could be a valid point.

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 02:05 PM

35. The Financial Markets...

...will at prematurely as they always do. In time it will calm down and the Pound and Euro will go back up. Albeit, it will trade at a lesser value to other currencies.

In the short term, this will be economically painful. As Britain has for decades transformed its economy to take advantage of open trade with the EU and likewise shed a lot of costlier economic trade done at home. Now they won't have those advantages and have to completely redevelop everything they shuttered. That won't be easy.

Once that is done, they'll be on better economic footing. However, the standard of living will probably be less.

And it also remains to be seen if they can maintain the UK now with North Ireland demanding to reunify with Ireland and Scotland demanding separation. If they get their way, this could also lengthen the pain process.

Of course when I say short term I'm referring to in economic terms, as in the long run were all dead.

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 02:06 PM

36. it doesn't matter if it's 'much ado about nothing' it's happening.

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Response to Nuclear Unicorn (Original post)

Fri Jun 24, 2016, 02:08 PM

37. Ah, unicorns....

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