If you're still wondering how the country got here, read this

Or if you want to know why no-deal is not a tenable proposal, these 5 paragraphs should explain it to you.

As I pointed out in October, British manufacturing supply chains are so deeply integrated with those of continental Europe that they could not survive the sudden establishment of customs and other checks on the British border.

Britain’s automotive, aerospace, and precision-instruments industries would be decimated.

To be sure, many non-European countries export large volumes of industrial goods to the EU. But, unlike British goods, these generally cross the EU border only once.

The same would hold true for Britain’s goods only after the country disentangles itself from the web of European supply chains.

That task alone would be comparable to the restructuring of post-communist countries following the collapse of the Council for Mutual Economic Assistance (Comecon, the Soviet-era trade bloc). Completing it could take five or more years.

The simplest way for corporations to disentangle from UK supply chains it to move all work currently done in the UK to the EU 27.  In case you're wondering, this will not be good for the UK economy.

And the person to whom they gave the job of sorting this out was David Davis - lazy as a toad, too ignorant to understand it and too arrogant to bother finding out.

Strange that some of the most ardent Brexiteers are Catholics -

Cash, Duncan Smith,  Rees Mogg etc 

The tactics of the enemy propagandist is not to propagate a particular belief.  Rather it is to spread division and discord.

These people do not want you to believe in or to trust a particular thing. Rather they seek to destroy a nation by making it difficult for you to believe in or to trust anyone or anything.

If you read Bernstein's posts with that in mind, they actually make sense.


Bump.  The information in this thread needs to be known and understood.

It's astonishing and depressing to realise who many people don't get these things.

you're preaching to the choir as far as I'm concerned

Elphi that report is so amateurish, Lord Lilley so glaringly under-qualified and the whole concept of WTO terms as a meaningful option so fundamentally retarded (as has been widely, repeatedly and comprehensively demonstrated) that I am surprised even someone so brazenly shameless as you would be willing to advocate it.

I can’t help but feel you need a time out, start thinking about it again but try to do so objectively and dispassionately. WTO terms simply don’t practically work. Sorry. Next.

The first paragraph of the introduction is a lie Elphi.

It we should "accept President Tusk’s offer, made in March and repeated as recently as October" and refers to a footnote.  You look at the footnote and it quotes Donald Tusk saying 

“I propose that we aim for a trade agreement covering all sectors and with zero tariffs on goods. ... To do so, we must start discussions on this issue as soon as possible.”

Tusk didn't make any offer.  He made suggestions as to the negotiation scope.  Alas the UK still hasn't decided what it wants.

Next it suggests we will "save £39bn" by leaving the EU.  In fact the £39bn is due for committments already paid and will and allows us to continue to access the single market, from which we will make far more than £39bn.  Not only will we 1) lose money but we will also 2) lose credibility. 

Let me make it simple for you. 

1)  If you pay £20 a week to sell at a car boot sale at which you make £100 and you decide to stop paying the fee and going to the sale, you don't save £20.   You lose £100.

2)  Any future trade deals will be bound up with penalty clauses, fees and supernational oversight.  So much for sovereignty.

Didn't bother read the rest of the document.  Have you?

Correction, you lose £80.  Principle remains sound.

Elphi - do you still not understand how falling out of the Single Market and reverting to WTO will affect EU-wide supply chains? 

It will destroy them and there is nothing to replace them.  We won't start a just-in-time manufacturing process with South Korea or Japan.  It makes no sense.  It only makes sense with countries in close proximity and open borders.  Leaving the EU destroys that, and not only the companies directly involved, but their employees, all the companies that supply them and that they supply and their employees, all the peripheral businesses that serve them and their employees and all the places that their employees spend their money.

This is destructive idiocy on a national scale.  It's economic suicide.

Ray, I thought you'd never ask.

But I'm in rebel country, so the answer is that I haven't got a clue about the weather in Macedonia.

How is it in the bubble?

I'm currently engaged on analysing the risk of the insolvent ECB becoming illiquid with regards to foreign currency debts.  

A separate problem is that as at 31 January 2018 Greece, Spain, Italy and Portugal owed a combined total of €972.9 billion.  Germany, Luxembourg, Netherlands and Finland were owed a combined total of €1,259.1 billion. But that's only politics.

The ECB in the middle is absurdly under-capitalised. Capital ratio is about 3% whereas there own guideline is 7%.  They could try to claim that that the risk weight for the Public Sector Bonds issued in the eurozone is 0%. But only because the National Central Banks are backed by ...  ... guess who?  ... the ECB!

ECB can print more euros until the cows come home, so apart from the minor local political difficulties of hyperinflation and massive wealth transfer  (EUR1 trillion) from Southern Europe to Germany, the euro balances are absorbable.

But the FX balances are not so easily addressed.  When, not if, interest rates rise, the ECB is going to struggle to service and refinance its FX positions.


Ffs Elphi, the ECB is not a privately owned bank

I know it’s pointless me responding because you will simply ignore it and repeat exactly the same stuff in a week or two’s time, but this is basic. you know full well you are being disingenuous

It’s not privately owned. The UK has 14% of the subscribed capital. But what does that have to do with anything?

It’s a bank. Lending long funded by short term borrowing is a significant ALM risk: fatal when interest rates rise. They can print Euros, but not US dollars. 

Central Banks can go bust. Ask Iceland.