Brexit

[EVNow]

You really do seem to have a chip on your shoulder that Brexit = thick anti immigrant racism. Oh well. Back to the EVs thread for me

Sorry, if your "sovereignty" myth got busted.

The fact is - few people care about stuff like sovereignty or low taxes. That is why fiscal conservatives (whether in US or Uk or elsewhere) form coalitions with social conservatives (is that a more palatable term?) to win elections. The fiscal conservatives are usually a small part (though very influential, about 20% of Trump voters in US) of the coalition with social conservatives being the vast majority.

Coming back on topic, your solution to the Irish border problem is interesting. I'm not sure lot of politicians want to openly support it, though.

 

[Singer3000]

Sorry, if your "sovereignty" myth got busted.

The fact is - few people care about stuff like sovereignty or low taxes. That is why fiscal conservatives (whether in US or Uk or elsewhere) form coalitions with social conservatives (is that a more palatable term?) to win elections. The fiscal conservatives are usually a small part (though very influential, about 20% of Trump voters in US) of the coalition with social conservatives being the vast majority.

Coming back on topic, your solution to the Irish border problem is interesting. I'm not sure lot of politicians want to openly support it, though.

Telling people that you know what they think better than they do themselves is not a good look. In fact it’s one that went out of fashion in 2016, at least in the US and UK.

Read this and you might learn something about your own biases:
http://csi.nuff.ox.ac.uk/?p=1153

The Irish border solution above is I suspect now the unofficial policy of the British government. There isn’t a majority for it in Parliament because there isn’t a majority for anything in Parliament unless they’re forced into a binary choice. And this particular choice cannot be presented without first getting the consent of European leaders (Varadkar is the key).

But before long a another binary choice will have to be made by Parliament. After months of faffing, May presented Parliament with a binary choice of Leave With Backstop vs Kick the Can. It remains to be seen what binary choice Johnson’s govt will present to the UK Parliament. My personal view for complex constitutional and political reasons is that No Deal vs Election is by far the most likely binary choice at this point. He of course hopes that the choice is “a Good deal” versus No Deal.

If I am right then any election may then kickstart a new phase where the binary choice becomes one for European capitals: No Deal vs Deal without Backstop.

Game theorists are gonna have fun with this one for decades either way.

 

[Fact Checking]

I DON'T CARE ABOUT THE GOLD STANDARD. Mooooooooods!

Fair enough, let's instead discuss how a no-deal hard BRExit, made more probable by the selection of Boris Johnson as the UK's PM, might affect European Tesla sales negatively at the end of this year.

Here's a map of which European regions will be hit hardest by a hard BRExit:

The UK and Ireland will be hit the hardest, with some effects in Norway and France. The UK might drop into a depression: 0.75% interest rates are already too low for much of a BOE easing policy response. Further pound weakening will help a bit but will crash living standards.

Depending on how much fear the press is going to create - and I think it might be great as there will be scary pictures of empty stores and mass protests in the UK - Tesla demand across Europe might be impacted, in the most important end of Q4 Christmas push ...

Demand for new cars is highly psychological: Q1'19 was magnified by the Trump government shutdown, the trade war, a NASDAQ crash and recession fears.

Let's hope Boris Johnson is only angling for a general election and might avoid a hard BRExit.

 

[BobbyKings]

Fair enough, let's instead discuss how a no-deal hard BRExit, made more probable by the selection of Boris Johnson as the UK's PM, might affect European Tesla sales negatively at the end of this year.

Here's a map of which European regions will be hit hardest by a hard BRExit:

The UK and Ireland will be hit the hardest, with some effects in Norway and France.

Depending on how much fear the press is going to create - and I think it might be great as there will be scary pictures of empty stores and mass protests in the UK - Tesla demand across Europe might be impacted, in the most important end of Q4 Christmas push ...

Demand for new cars is highly psychological: Q1'19 was magnified by the Trump government shutdown, the trade war, a NASDAQ crash and recession fears.

Brexit has nothing whatsoever to do with global Tesla sales. Battery constrained anyhow.

Brexit is irrelevant anyhow, except for UK.

 

[Fact Checking]

Brexit is irrelevant anyhow, except for UK.

See the map, half of BRExit damage is in the EU - which might push an already wobbly Germany into recession. "Fear" during the all important Christmas season can trigger recessions.

In recessions Tesla's European sales will suffer too - and if the China trade war escalates there might be a global recession ...

 

[traxila]

Brexit has nothing whatsoever to do with global Tesla sales. Battery constrained anyhow.

Brexit is irrelevant anyhow, except for UK.

Is too simple to outright dismiss Brexit like that. Ripples are what led to tsunamis in 2008. The world seems toppy nowadays.

 

[Christine69420]

Fair enough, let's instead discuss how a no-deal hard BRExit, made more probable by the selection of Boris Johnson as the UK's PM, might affect European Tesla sales negatively at the end of this year.

Here's a map of which European regions will be hit hardest by a hard BRExit:

The UK and Ireland will be hit the hardest, with some effects in Norway and France. The UK might drop into a depression: 0.75% interest rates are already too low for much of a BOE easing policy response. Pound weakening will help a bit but will crash living standards.

Depending on how much fear the press is going to create - and I think it might be great as there will be scary pictures of empty stores and mass protests in the UK - Tesla demand across Europe might be impacted, in the most important end of Q4 Christmas push ...

Demand for new cars is highly psychological: Q1'19 was magnified by the Trump government shutdown, the trade war, a NASDAQ crash and recession fears.

This reminds me of some of the articles written about Tesla. Ignoring important facts when reaching conclusions.

Norway and Britain have made deals that will be executed in case of a NoDeal Brexit. The contents of these deals are not known to the public. So Bertelsmann ignored this and concluded that a NoDeal Brexit will cost Norway quite a bit.

They could have said Cost Unknown for Norway but that would not generate that many clicks for the papers I guess? Anyway - seeing the report fall short with regards to Norway I find it hard to trust the rest of it.

My source: Internasjonal studie: Norge blant de hardest rammede av brexit

 

[MarcusMaximus]

On the upside, the intensifying trade war with China does increase the odds of a trade deal with Japan and the EU in the near term. Which would be a big boost - particularly with the EU.

Then again, with Trump, you never know...

If anything, I feel like he usually goes the opposite way: imposing tariffs on everyone willy nilly, all at the same time.

 

[Cosmacelf]

Fair enough, let's instead discuss how a no-deal hard BRExit, made more probable by the selection of Boris Johnson as the UK's PM, might affect European Tesla sales negatively at the end of this year.

Here's a map of which European regions will be hit hardest by a hard BRExit:

The UK and Ireland will be hit the hardest, with some effects in Norway and France. The UK might drop into a depression: 0.75% interest rates are already too low for much of a BOE easing policy response. Further pound weakening will help a bit but will crash living standards.

Depending on how much fear the press is going to create - and I think it might be great as there will be scary pictures of empty stores and mass protests in the UK - Tesla demand across Europe might be impacted, in the most important end of Q4 Christmas push ...

Demand for new cars is highly psychological: Q1'19 was magnified by the Trump government shutdown, the trade war, a NASDAQ crash and recession fears.

Let's hope Boris Johnson is only angling for a general election and might avoid a hard BRExit.

Fact Checking, I like your posts in general, but really, the effects of a hard Brexit are NOT known. The above is a partisan inspired guess. Brexiteers have their own projections which run counter to the above. Both the commonwealth and the US stand ready to help the UK through a hard Brexit. No doubt UK markets will freak out in the short term. It will be interesting to see what they look like in a year.

 

[Fact Checking]

Fact Checking, I like your posts in general, but really, the effects of a hard Brexit are NOT known.

These are projections cited by the Financial Times. My guess is that they are too conservative, the effect in the UK will be worse.

Brexiteers have their own projections which run counter to the above.

What I've seen from Leavers so far was a mixture of delusions and outright lies - which are not a good basis to come up with good projections.

Both the commonwealth and the US stand ready to help the UK through a hard Brexit.

Three big problems:

• The U.S. is a small trading partner in comparison to the EU.
• The U.S. is in no position to even receive many of the products the U.K. will be unable to sell in the EU, such as live animals and other perishable agricultural products. ~4 weeks shipping time is a huge barrier, both in cost and in delay.
• There will be very little political goodwill by the electorate in many of the UK's trading partners to help beyond basic humanitarian help: the Leavers are committing an unforced error, which they could immediately undo by agreeing to the economic and political conditions of the EU. Why would other countries waste taxpayer money, just to help the Murdochs avoid anti-trust scrutiny, which was a major force behind the BRExit farce?

No doubt UK markets will freak out in the short term. It will be interesting to see what they look like in a year.

My prediction: a -5% real GDP loss after a hard BRExit, rising unemployment and a landslide against conservatives.

Good riddance, the suffering they are causing is an inexcusable crime.

 

[renim]

back to real business, World Cricket Cup

Is this a better deal for trade partners than EU?
Its a mixed bag, but since 1973 when England joined the EEC

Since 1973 many Commonwealth countries have enjoyed both economic growth and population growth, with hindsight, the bet to hitch to the EU (which required ending trade agreements with Commonwealth countries) has cost England significant opportunity. On the balance, its probably better to have trade with growing economies rather than shrinking economies.

 

[Singer3000]

These are projections cited by the Financial Times. My guess is that they are too conservative, the effect in the UK will be worse.



What I've seen from Leavers so far was a mixture of delusions and outright lies - which are not a good basis to come up with good projections.



Three big problems:

• The U.S. is a small trading partner in comparison to the EU.
• The U.S. is in no position to even receive many of the products the U.K. will be unable to sell in the EU, such as live animals and other perishable agricultural products. ~4 weeks shipping time is a huge barrier, both in cost and in delay.
• There will be very little political goodwill by the electorate in many of the UK's trading partners to help beyond basic humanitarian help: the Leavers are committing an unforced error, which they could immediately undo by agreeing to the economic and political conditions of the EU. Why would other countries waste taxpayer money, just to help the Murdochs avoid anti-trust scrutiny, which was a major force behind the BRExit farce?

My prediction: a -5% real GDP loss after a hard BRExit, rising unemployment and a landslide against conservatives.

Good riddance, the suffering they are causing is an inexcusable crime.

You are only guessing. We can all come up with guesses.

There is an alternative view that it is the prolonged uncertainty that has hit UK commercial activity and FDI the hardest and once that uncertainty is finally lifted, we could see the unleashing of a pent-up wave of consumer spending, real estate activity and business investment. What is largely forgotten in the noise is that Brexit was supported by a majority of the voting public and depending on your polling question, still is. That's why Osborne's "Project Fear" forecast of an immediate recession upon the vote itself was wrong. Most consumers and small business owners were in a brilliant mood after the vote and their economic actions reflect this. The same could well be true for the dire projections upon the actual exit. About half the population can't wait for Brexit because they voted for it to happen, I'd venture that the larger chunk of the rest now just want it over and done with.

Further and in a quite major change of policy, the Johnson government has made clear it intends to make full use of countercyclical fiscal policy when needed. It has the breathing room to do so because the structural deficit has basically been eliminated, there's a raft of essential supply side projects that are awaiting funding and even without QE, the long term yield on government debt is below long term inflation.

So there's a parallel universe to yours where the sky doesn't fall in for most people, they wake up one sunny spring day in 2020 and look at their beat-up 2010 era Ruhr-mobile in the driveway and decide they'd rather like to trade it in for a Model 3. They happily click Order, noting the rock bottom lease rates (because of still low rates) and the attractive tax incentives (there's strong potential for a Diesel-to-EV scrappage scheme on top of the existing £3.5k EV subsidy and zero London congestion charge). All the better if the UK and US sign a quickie interim trade deal, that includes the dropping of the 10% import tariff for autos.

Polls polls polls.... make of them what you will. But the Sunday papers in the UK this weekend led on a poll that said the only route to a Conservative majority in any upcoming election was to have first carried out a No-Deal exit from the EU. In my opinion, global investors should now see this as the Base Case on 31 October. Whether that makes you Risk-Off is entirely for you but for me, it barely registers on my list of things to worry about right now.

 

[Mader Levap]

So there's a parallel universe

I like how you make up things.

 

[EVNow]

So there's a parallel universe to yours where the sky doesn't fall in for most people, they wake up one sunny spring day in 2020...

Have you talked to N Ireland folks and Scotts about how they feel about no-deal Brexit ? Atleast the twitter feed I see is *lit*.

 

[Buckminster]

Have you talked to N Ireland folks and Scotts about how they feel about no-deal Brexit ? Atleast the twitter feed I see is *lit*.

I don't believe things have changed much since the referendum. On the whole, London, Wales, Scotland and NI are remainers with the North of England the brexiteers. South England (non London) probably with the most swing voters (in both directions).

 

[EVNow]

I don't believe things have changed much since the referendum. On the whole, London, Wales, Scotland and NI are remainers with the North of England the brexiteers. South England (non London) probably with the most swing voters (in both directions).

True - but a no deal Brexit would make remainers more angry than soft or May style Brexit.

 

[Buckminster]

Labour and SNP hint at pact to 'lock Tories out of government'
Labour and SNP getting a little desperate here. I am not completely against giving the Scots independence, I just don't think they will vote for it following Brexit (once they see what it entails plus see the Irish economy sink along with UK).

 

[Singer3000]

I don't believe things have changed much since the referendum. On the whole, London, Wales, Scotland and NI are remainers with the North of England the brexiteers. South England (non London) probably with the most swing voters (in both directions).

That's not quite right. 53.4% of English voters voted for Brexit, as did 52.5% of Welsh voters. The only English region that voted to Remain was greater London.

Only 38% of Scots voted for Brexit but this is seen by some as a remarkably high number, given the official Vote Leave campaign barely campaigned north of the border. What was most interesting was the sudden swing in the 2017 snap election from the pro-independence pro Remain SNP to the pro-union pro Brexit Tories, a swing of 13%.

We might soon see a First Post the Post re-run of the 2016 referendum, in the form of a pre-Brexit snap election with the Conservative & Brexit Party running under an informal agreement not to campaign against each other in target seats, with some likely more formal pact by Remain parties - Lib Dem, Green, Plaid. Labour's position in this is a bit more ambiguous given no one can figure out if they are for or against Brexit. My guess is that the SNP are quite unlikely to do a deal with anyone prior to an election.

As is implied by the above, what is most interesting is that under a FPTP system with formal or informal pacts on each side of the divide, there would likely be an overwhelming majority for Brexit this time (i.e. a Johnson majority). In 2016, the vote counts were not reported according to usual parliamentary constituencies but the best estimates by academics indicate over 400 of 650 constituencies backed Leave in 2016.

This is the reason why a No-Deal Brexit now looks so likely to me (and the market and most of the commentariat). Given the new government's determination to leave by whatever means necessary on 31st October, there's no obvious constitutional mechanism left to do anything other than temporarily delay the UK's exit, with Remain MPs forcing the collapse of the government to hold an election before then (although the timing looks very tight now).

However not only would the geographic distribution of the vote be structurally weighted in Leave's favour in such an election, Johnson would also have a simple but effective campaign message, that the election was actually about the preservation of democracy, not the rights and wrongs of European Union membership. "Tell Them Again!". Noel Gallagher summed this up beautifully this week:

Noel Gallagher: ‘I liked my mum until she gave birth to Liam’
Lately, he has been enraging remainers – of which he is one – by saying: “There’s only one ****** thing worse than a fool who voted for Brexit, and that’s the rise of the ***** trying to get the vote overturned.”

“And people started calling me a Nazi!” he says. “I thought: ‘Really? A member of the Third Reich?’ Look, I think it’s ridiculous that we’re leaving. None of us were even qualified to vote. You ask a guy above a chippy in Bradford if we should leave Europe. ‘Yeah!’ But I still think if there’s a second referendum, as a nation, we’ll never recover. We have to come out because, no matter how ill-informed people were, you’re saying to them their vote doesn’t count. And its symptomatic of shutting people’s opinions down.”​

Regrettably none of this has apparently been fully understood by the European Commission and European leaders, who are still insisting that the un-ratifable Withdrawal Agreement is a holy document that cannot have a single letter or comma changed, despite 200 of its 550 pages (the Northern Ireland Protocol) quite likely being legally incompatible with the Good Friday Agreement. Unless they budge, we're therefore heading for a No Deal Brexit either in October or shortly thereafter, which quite ironically might end up precipitating the customs checks at the Irish border that the Backstop was designed to prevent at all costs.

 

[Buckminster]

That's not quite right. 53.4% of English voters voted for Brexit, as did 52.5% of Welsh voters. The only English region that voted to Remain was greater London.

View attachment 438685

Only 38% of Scots voted for Brexit but this is seen by some as a remarkably high number, given the official Vote Leave campaign barely campaigned north of the border. What was most interesting was the sudden swing in the 2017 snap election from the pro-independence pro Remain SNP to the pro-union pro Brexit Tories, a swing of 13%.

We might soon see a First Post the Post re-run of the 2016 referendum, in the form of a pre-Brexit snap election with the Conservative & Brexit Party running under an informal agreement not to campaign against each other in target seats, with some likely more formal pact by Remain parties - Lib Dem, Green, Plaid. Labour's position in this is a bit more ambiguous given no one can figure out if they are for or against Brexit. My guess is that the SNP are quite unlikely to do a deal with anyone prior to an election.

As is implied by the above, what is most interesting is that under a FPTP system with formal or informal pacts on each side of the divide, there would likely be an overwhelming majority for Brexit this time (i.e. a Johnson majority). In 2016, the vote counts were not reported according to usual parliamentary constituencies but the best estimates by academics indicate over 400 of 650 constituencies backed Leave in 2016.

This is the reason why a No-Deal Brexit now looks so likely to me (and the market and most of the commentariat). Given the new government's determination to leave by whatever means necessary on 31st October, there's no obvious constitutional mechanism left to do anything other than temporarily delay the UK's exit, with Remain MPs forcing the collapse of the government to hold an election before then (although the timing looks very tight now).

However not only would the geographic distribution of the vote be structurally weighted in Leave's favour in such an election, Johnson would also have a simple but effective campaign message, that the election was actually about the preservation of democracy, not the rights and wrongs of European Union membership. "Tell Them Again!". Noel Gallagher summed this up beautifully this week:

Noel Gallagher: ‘I liked my mum until she gave birth to Liam’
Lately, he has been enraging remainers – of which he is one – by saying: “There’s only one ****** thing worse than a fool who voted for Brexit, and that’s the rise of the ***** trying to get the vote overturned.”

“And people started calling me a Nazi!” he says. “I thought: ‘Really? A member of the Third Reich?’ Look, I think it’s ridiculous that we’re leaving. None of us were even qualified to vote. You ask a guy above a chippy in Bradford if we should leave Europe. ‘Yeah!’ But I still think if there’s a second referendum, as a nation, we’ll never recover. We have to come out because, no matter how ill-informed people were, you’re saying to them their vote doesn’t count. And its symptomatic of shutting people’s opinions down.”​

Regrettably none of this has apparently been fully understood by the European Commission and European leaders, who are still insisting that the un-ratifable Withdrawal Agreement is a holy document that cannot have a single letter or comma changed, despite 200 of its 550 pages (the Northern Ireland Protocol) quite likely being legally incompatible with the Good Friday Agreement. Unless they budge, we're therefore heading for a No Deal Brexit either in October or shortly thereafter, which quite ironically might end up precipitating the customs checks at the Irish border that the Backstop was designed to prevent at all costs.

No argument with Noel - referendums are a little too democratic, but democracy has to be sacrosanct until it it is replaced (democratically ideally).

We are entering a game of chicken. Bound to be a few twists and turns. Can't imagine that there could be no negotiation and we just leave. Otherwise, the EU machine will start to look a little less than democratic to the more pro-UK nations. UK Parliament will probably find a way to stop no deal also - presumably, that is what the EU are counting on most of all.

 

[Singer3000]

No argument with Noel - referendums are a little too democratic, but democracy has to be sacrosanct until it it is replaced (democratically ideally).

We are entering a game of chicken. Bound to be a few twists and turns. Can't imagine that there could be no negotiation and we just leave. Otherwise, the EU machine will start to look a little less than democratic to the more pro-UK nations. UK Parliament will probably find a way to stop no deal also - presumably, that is what the EU are counting on most of all.

With a government in place that is firm on leaving on 31 October, numerous constitutional experts are advising that the only clear constitutional mechanism left to stop the Prime Minister Brexiting on 31 October is to replace the Prime Minister.

The route for this is a Vote of No Confidence, which would require quite a few Tory MPs torpedoing their own careers, given how many MPs have quit Labour since the last election and would be minded to back Johnson. If they manage it, there's then two choices: 1) "a government of national unity" to replace Johnson, or 2) if that can't be achieved within 14 days then a new election.

1) looks impossible, because so many Remain MPs from all parties hate Corbyn and would never willingly put him in Downing St. The media are talking up the idea of compromise candidate instead for a brief few weeks but this would never be supported by the Corbynites (confirmed by a front bencher yesterday) so isn't a flyer either.

Which leaves:
2) an election. But the legal power to set the election date sits with the Prime Minister and his advisors have said they would set the date for after 31 Oct (i.e. once Brexit was already done). While this would no doubt be contested in the courts, the government's legal grounds look strong. Even if the courts found against the government, Johnson would likely sweep to a majority against a backdrop of "defeat the enemies of democracy".

Which takes you back to No Deal Brexit.

All of which makes it a puzzle that the EU are still not prepared to meet for negotiations to discuss how the Backstop might be obviated by some other process or mechanism. It has after all been defeated in Parliament 3 times, including by the highest majority in UK Parliamentary history. It makes me think the EU Commission and certain EU leaders now actively WANT a No Deal Brexit, which means that sooner or later, that is what we'll get.