EU

Poland would happily trade in its EU membership to save its culture

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An IBRiS poll conducted for the liberal and pro-EU weekly Polityka was published on July 5. The two questions posed to 1,000 people polled was essentially to gauge loyalty to the EU or Poland. Poland would seemingly be happy to trade in EU membership than sell out their culture. This is not a debate about the rights and wrongs of taking in asylum seekers rather to point out what is happening on the ground.

Q1: “Should Poland refuse to accept refugees from Muslim countries even if this should lead to the loss of European funds?”
– YES: 56.5%
– NO: 40.4%

Q2: “Should Poland refuse to take in refugees from Muslim countries even if this should lead to the obligation to leave the European Union?”
– YES: 51.2%
– NO: 37.6%

This opposition to the relocation of asylum seekers arriving in Greece and Italy is reflected in the popularity of the Polish conservative PiS party. The PiS hit 41% in a June IPSOS poll for the first time (against Donald Tusk’s Liberal party PO at 26%). The poll was conducted at the same time the European Commission had announced the launch of sanctions against Poland, Czech Republic and Hungary for their refusal to accept immigrant relocation quotas.

It was only last week that Italy threatened to issue 200,000 refugees with EU travel documents that would legalize their movement around Europe (i.e. encourage their departures from Italy to the desired destination of Germany).

In response to Italy’s threat, Austria is now looking to shut its border with Italy at the Brenner Pass. Bild newspaper has said that Vienna was ready to close the Brenner Pass within a day if migrant arrivals increased. Tensions are already high. Austria has threatened to send armoured vehicles and 750 soldiers to stop migrants crossing.

Whether we like it or not, for all of the altruism in the world, it seems that a growing number of citizens want their governments to prioritize them first. Failure to do so is being typified by what is happening in Greece.

According to the annual survey by the firm Adecco titled “Employability in Greece,” the brain drain phenomenon has been increasing over the last three years. In 2005 only about 11% of unemployed respondents said that they were actively looking for a job abroad. This figure increased to 28% in 2016 and reached 33% so far this year.

The responses show that the unemployed have different reasons to seek work abroad. Whereas in 2005, the main reason was the prospect of a better wage, in 2016 and 2017 the main reason given were better career opportunities abroad. Greeks are giving up on Greece. EU fiscal thuggery is leaving a public system (especially health) under so much strain that it is buckling. 36% of Greeks live below the poverty line. That means many can’t access affordable healthcare because it is generally provided by corporates and when you lose a job you lose the healthcare. This means many are forced to use A&E of major hospitals which are now overcrowded and understaffed as more doctors are leaving to seek better fortune for their services.

If that wasn’t enough, mothers who had given birth were being restricted from taking their new-borns home if they couldn’t pay the fees. While the government has banned this practice they have introduced new laws to allow the seizure of assets (e.g. homes) if debts are not settled.

Forced refugee quotas on countries that plainly don’t want them is a bad strategy. Economic conditions are clearly not in the EU’s favour with poverty and youth unemployment at record high levels. For refugees, most do not want resettlement in either economically weak zones or those that are openly hostile toward them. That is completely understandable. For the citizens of member states to be threatened with sanction or penalty for failing to comply is the wrong way to go. By the EU’s own statistics bureau, 80% of asylum seekers are ‘economic’, not fleeing war zones. It is understandable that citizens become concerned when public services that are already under strain become overburdened.

Some can scream at these people for being bigoted, racist or intolerant till the cows come home but ignoring their views, much less ridiculing them has the opposite effect of winning hearts and minds. As a grandchild of refugees, helping those in dire need is basic human decency. One can be sure that many in real ‘need’ will give back to those that have given them a second chance. Those who have come to help themselves at the expense of others who have worked hard to attain it should hardly be surprised when they are not given the same level of sympathy.

What we are seeing in Poland, Italy, Greece and Austria is ‘actions’ over ‘words’. Unless concerns are addressed by political leaders, altruistic lip service will be ignored and sadly people will increasingly take the law into their own hands.

Europe’s childless leaders – without progeny ruling on posterity

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Here is a picture of Angela Merkel as a child. Sadly this is as close as she got to having her own. It isn’t just her. The majority of European political leaders have no kids. France’s Macron – no kids. UK PM Theresa May – no kids. The Netherlands PM Mark Rutte – no kids. Italian PM Paolo Gentiloni – no kids. Swedish PM Kjell Stefan Löfven- no biological kids. Luxembourg PM Xavier Bettel – no kids. Scotland’s Nicola Sturgeon – no kids. EC President Jean-Claude Juncker – no kids. Incidentally Japan’s PM Abe also has no children.

As Europe’s population growth rate declines are these people best positioned to impart advice on how to stop it? Seems that surrender to mass migration is all too easy a policy to replace dwindling stocks of local inhabitants.

From the Washington Examiner

“The Boomers first grabbed the reins of political power in the West in the 1990s, as Communism collapsed and Francis Fukuyama declared “The End of History.” The Boomers live like they believe it. If history is over, if all that is left is consumer capitalism in a liberal democracy, if the stream has stopped flowing, why not climb out?

The late Benjamin Barber wrote a response to Fukuyama called Jihad vs McWorld. Barber argued that the death of the old conflicts—between nations—would go hand in hand with a new conflict: the clash between the McWorld of global consumer capitalism and the “jihad” of local, traditional, and “conservative” cultures.

It’s clear which side has political power now. But the demographics point to a different future. In 2009 Phillip Longman noted that in France (for example) a tiny minority of women are giving birth to over 50% of the children every year. These women are either practicing Catholics or immigrant Muslims.

One of the benefits of parenthood is the daily confrontation with free will—a human nature. Parents may have their child’s life, career, and happiness planned out, but a child has other ideas -constantly. Love, patience, teaching, negotiating, scolding—nurture—can help direct the child, but the overwhelming otherness of the child is undeniable. They are not blank slates upon whom the parent exercises his will.

Political leaders without this experience of parenthood may be susceptible to the idea that people are blank-slates, interchangeable units of human capital. As a parent and a teacher, I have seen many brilliant and well-meaning parents and colleagues crash their will and intellect against the rock of a child’s independent nature. Now, scale such a hubristic paternalism to a nation. Or a continent.

Contemporary childless leaders, however ascendant they feel today, may be the last gasp of secularism. The future is won by those who show up, and only the religiously orthodox are having children.

Those still swimming in the ancient streams of Faith and Culture in France will have the observant offspring of two rival religions living within the borders of one nation. The second Battle of Tours, (or Vienna, or Lepanto) might be extra bloody due to the policies of today, but the authors of those policies will not be around because they will be dead, and their offspring will not be around, because they do not exist.

The Founding Fathers of the United States established the Constitution to “secure the blessings of liberty to ourselves and our posterity”, posterity being their offspring. Looking out for one’s posterity, having a long-term vision, is necessary for the good of society, according to Harvard Political Scientist James Wilson. Do childless political leaders have skin in the game long-term?

In Europe today, those without progeny are enacting policies that impact the posterity of others.

Surely Macron, Merkel, Juncker, and the rest would argue that they can do their crucial jobs better because they don’t have children to distract them. C.S. Lewis provides the rebuttal: “Children are not a distraction from more important work. They are the most important work.”

Whichever way you cut it, Europe’s childless leaders speak volumes of a continent in long term (terminal) decline.

Poles apart

Once again how the social media feeds lit up with the supposed snubbing of President Trump by the Polish First Lady. If people took five seconds to come out of the sandpit and  objectively analyze her actions they’d see without deliberate video editing she clearly shook his hand immediately after she shook FLOTUS’s hand. It is pretty easy to work out why so many click bait media organizations are floundering. There is no intelligence or effort to be objective. Sadly one is forced to doubt almost every meme of this kind. It makes tabloids look like professorial theses by comparison. Even the Polish PM came out tweeting it was “FAKE NEWS”

Earlier in the week media were trying to claim he got lost on the way to his limousine when he alighted Air Force 1 as if to claim he was suffering from a mental disease. No doubt trying to add some credibility to the Democrats trying to seek his removal for a lack of mental faculty.

He is without doubt unconventional, often unstatesmanlike, at times shows a lack grace/eloquence and narcissistic (his round table where cabinet members professed their love for him was pretty nauseating) but reading his speech (even if composed by his speech writer – which president doesn’t?) in Warsaw, Trump spoke of what many of today’s apologist leaders refuse to. He believes in the idea that it is totally acceptable to defend your own values and culture. That people shouldn’t be pilloried for feeling patriotic. This week we’ve seen Trudeau offer a state apology and $10.5mn compo payment to a convicted terrorist.  Several months ago Canadian Bill M-103 was passed in such a way that free speech is gagged toward a specific minority. Australia tinkers at the edges of the draconian 18C and still bothers to invest in the AHRC which has shown itself to be an absolute waste of time, resources and worst of all a wrecker of the reputations of innocents. Germany arrested a good samaratin that released a video showing migrant violence toward an innocent victim on grounds of breaching privacy laws and the women of Cologne were advised to wear less revealing clothing to avoid being pestered. We could go on for ages. Is this defending culture? Thinking we gain acceptance by denying our own identity? I applaud Trump for making valid points about pride in one’s nation, something the gritty Poles know all too well.

There are many things not to like superficially about POTUS but when it comes to asking harsh questions about a fair share of funding for NATO or the UN, citing legitimate reasons for ditching the Paris Climate Accord or poking China to start dealing with its geopolitical chess piece in North Korea, he is speaking truths his predecessor would never broach. Sure he has much work to do at home but the world can’t help but notice the new sheriff in town on the global stage and boy do we need strength in this department after eight hollow years where countries like China and Russia ran amuck.

Yet when all is said and told, the mainstream media remains too busy trying to create stories/scandals with concocted outcomes by editing out the facts to create ‘ gotcha’ scoops which achieves their goals of personal hatred. Fake news? That term is getting overused. The fake part may be right but the news part isn’t.

Italy proves the ECB Thinks some banks more equal than others

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The ECB proves it is powerless to push member states into banking solutions. It is in fact nothing more than an accomplice. No sooner had the ECB turned a blind eye to a bailout of two banks last week, this week saw the world’s oldest bank likely to get the same treatment.  The state-backed rescue of Banca Monte dei Paschi di Siena SpA may be approved by the European Commission as soon as today.

EU approval would pave the way for the third recapitalization of an Italian bank by the state this week. Last month, European authorities and Italian officials reached an agreement in principle on a rescue plan that may include a capital increase of about 8.3 billion euros ($9.4 billion) and the sale of about 26 billion euros of bad loans through securitization. Monte Paschi was forced to seek state aid after it failed to raise capital from investors in December.

All it shows is that for all the rhetoric of bail-ins and tough talk, the ECB has no choice but to let member states handle their own affairs. Italy has a banking sector with 20% NPLs with up to 50% in southern parts of the country.

In reality it shows up the ECB to be powerless to control its members. While the US can openly state it is paring back its balance sheet, the ECB has to be content with rolling over and playing dead. At the same time Italy sets precedents that become the benchmark for others to follow. Must be food for thought for all the banks that have been forced to bail-in…-all banks are equal…some more equal than others!

From Sesame to Elm Street

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ETF markets continue to surge in popularity. With low fees and basic packaging of the ETF product even Big Bird can understand what The Count is going on about. No wonder investors are snapping up these products faster than the Cookie Monster. However there is something chilling about the ETF market. In the lead up to and eventual crash of Lehmans et al CDOs, CDSs and other synthetic products were seen as the root of all evil. They were so complex that even Fields Medal winners in mathematics couldn’t make head nor tail of them. The ETF became the opposite – being too simplistic – and with that the product has brought huge complacency. To that end Sesame Street could well switch to Elm Street.

Today assets invested in ETF/Ps comprise over $3 trillion globally. Put simply the new funds flowing into ETFs vs. traditional mutual funds is at a 100:1 ratio and in terms of AUM is on par with total hedge fund assets which have been in existence for 3 times as long.

However ETFs, despite increasing levels of sophistication, have brought about higher levels of market volatility. Studies have shown that a one standard deviation move of S&P500 ETF ownership carries 21% excess intraday volatility. Regulators are also realising that limit up/down rules are exacerbating risk pricing and are seeking to revise as early as October 2015. In less liquid markets excess volatility has proved to be 54% higher with ETFs than the actual underlying indices. A full report can be seen here.

With the continuation of asset bubbles in a TINA (there is no alternative) world, ETFs in my view will lead to massive disappointments down the line. Their downfall could well invite the revival of the research driven fund manager model again as robots show they’re not as infallible as first thought in managing the volatility. Don’t forget humans designed the algorithms.

There is also the added risk of whether some ETFs actually hold the physical of the indices or commodities they mimic. A gold ETF is a wonderfully good way to store wealth without resorting to one’s own bank vault but how many ETF owners have inspected the subterranean cage that supposedly holds the physical the ETF is backed by? Has it been lent out? Does it own a fraction of stated holdings? It could be any other commodity too. Of course the ETF providers bang on about the safety of the products but how many times have we gasped when fraud reared it’s ugly head right in front of us. Bernie Maddoff ring any bells?

Given the implied volatility on the downside we need to bear in mind the actions of central banks. The Bank of Japan (BoJ) is the proud owner of 60% of the ¥20 trillion+ domestic ETF market. While the BoJ says it isn’t finished expanding its world’s largest central bank balance sheet (now 100% of GDP), the US Fed is looking to reduce its balance sheet by over 40% in order to normalize. While one can applaud some level of common sense pervading sadly the consequences of defusing the timer on the bomb they created at a period when the US economy is showing signs of recession will only be an overhang on asset markets. Should the US market be put through the grinder, global markets will follow.

It is one thing for the Fed to be prudent. It is another for it to be trying to cover its tracks through higher interest rates in a market that looks optically pretty but hides serious life threatening illnesses. The Fed isn’t ahead of the curve at all. It is so far behind the 8-ball that its actions are more likely to accelerate rather than alleviate a crisis. Point to low unemployment or household asset appreciation as reasons to talk of a robust economy but things couldn’t be further from the truth. Wage growth is not the stuff of dreams and the faltering signs in auto, consumer and residential markets should give reason for concern.

Since GFC we have witnessed the worst global economic revival in history. The weakest growth despite record pump priming and balance sheet expansion. Money velocity is continually falling and the day Greenspan dispensed with M3 reporting one knew that things were bad and “nothing to see here” was the order of the day.

Record levels of debt (just shy of $220 trillion or 300% of GDP when adding private, corporate and government), slow growth, paltry interest rates and coordinated asset buying have not done anything other than blown more air into a bubble that should have been burst. GFC didn’t hit the reset button. Central banks just hit print to avoid the pain. We’ve doubled up on stupidity, forgot the idea of prudent and sensible growth through savings and just partied on. Ask any of your friends in finance what they “really” think and I can assure you that after a few drinks they’ll tell you they’re waiting for the exit trade. They know Armageddon is coming but just don’t know when

Whether we like it or not, the reset button will be hit. I often argue people should not worry about the return ON their money but the return OF it. Global markets can’t be bailed out again with massive cash infusion. That has been a recipe for disaster, only widening the gap between haves and have nots. Debt must be allowed to go bad, banks must be allowed to go bust and free markets must be freed from the shackles of state sponsored manipulation to set prices. It will be ugly but more of the same can kicking won’t work.

ETFs are a sign of the times. They represent the slapdash approach to life these days. Time saving apps if you will. However nothing beats hard nosed analysis to understand what awaits us. Poor old Big Bird will be the canary in the coal mine and Sesame Street will be renamed Elm Street as the Kruger’s move in to give us nightmares Janet Yellen assures us aren’t possible.

Perhaps that is the ultimate question. As you go to work each day do you honestly feel that things are peachy as the management town hall meetings would have you believe? Are your friends or colleagues all bulled up about the future? Perhaps that is easier to answer than an ETF.

Yellen’s Fedtime stories

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US Fed Chair Janet Yellen uttered perhaps some of the most bizarre words to come out of a central banker. So much so that Alan Greenspan’s “I know you think you understand what you thought I said but I’m not sure you realize that what you heard is not what I meant.” seems almost comprehensible by comparison. Yellen told an audience that she believes we won’t see another severe financial crisis in our lifetimes. Either Ms Yellen is not long for the world or denial is running deep within her veins. One of her own FOMC board members (James Bullard) wrote a piece on why the Fed needs to trim its balance sheet from $4.47tn to around $2.5 trillion) so they can prepare for the next horror that awaits.  Even Minnesota Fed Reserve Bank President Neel Kashkari said the likelihood of another financial crisis is 2/3rds. We have a world with debt up to its eyeballs and global interest rate policies that have only led to the slowest post slowdown growth in history. The signs of a global slowdown are becoming ever more obvious even in the US. Slowing auto sales and rising delinquencies are but one signal. The imminent collapse of so many public pension funds another.

Had she not seen the European Commission’s decision to let Italy spend up to 17 billion euros to clean up the mess left by two failed banks? The news is not only another whack for Italian taxpayers but a setback for the euro zone’s banking union, and a backflip for the EU’s stance on non-standard bailouts. The Italian government wound down Banca Popolare di Vicenza and Veneto Banca, two regional lenders struggling under the weight of non-performing loans which averages 20% across the nation and up to 50% in the south. Intesa Sanpaolo bought the banks’ good assets for one euro, and was promised another 4.8 billion euros in state aid to deal with restructuring costs and bolster its capital ratio. Italy’s taxpayers get to keep the bad loans, which could end up costing them another 12 billion euros. Even the Single Resolution Board — whose purpose is to take the politically difficult decision of whether to close a bank out of the hands of governments — chose not to intervene.

Last year four Italian banks were rescued and it seems that since Lehman collapsed in 2008 non performing loans (NPLs) have soared from 6% to almost 20%. Monte Dei Paschi De Siena, a bank steeped in 540 years of history has 31% NPLs and its shares are 99.9% below the peak in 2007. Even Portugal and Spain have lower levels of NPLs. The IMF suggested that in southern parts of Italy NPLs for corporates is closer to 50%!

Italy is the 3rd largest economy in Europe and 30% of corporate debt is held by SMEs who can’t even make enough money to repay the interest. The banks have been slow to write off loans on the basis it will eat up the banks’ dwindling capital. It feels so zombie lending a la Japan in the early 1990s but on an even worse scale.

Not to worry, the Italian Treasury tells us the ECB will buy this toxic stuff! But wait, the ECB is not allowed to buy ‘at risk’ stuff. So it will bundle all this near as makes no difference defaulted garbage (think CDO) in a bag and stamp it with a bogus credit rating such that the ECB can buy it. In full knowledge that most of the debt will never be repaid, the ECB still violates its own rules which state clearly that any debt they buy ‘cannot be in dispute’.

The Bank of Japan has no plans to cut back on the world’s largest central bank balance sheet. It continues to Hoover up 60% of new ETF issues at such an alarming pace it is the largest shareholder of over 100 corporates. Then there is the suggestion of buying all $10 trillion of outstanding JGBs and convert them into zero-rate (+miniscule annual service fee) perpetuals.

Australia’s banks are now the most loaded with mortgage debt globally at 60% of the total loan book.  Second is daylight and third Norway at 40%. Private sector debt to GDP is 185%. We have a government who can’t tighten its belt basing its budget on rosy scenarios that will be improbable. Aussie banks have been slapped with a new tax and with the backdrop of a rising US rate environment, the 40% wholesale funded Aussie banks will be forced to accept higher cost of funds. That will be passed straight onto consumers that are already being crushed under the weight of mortgages. One bank survey by ME Bank in Australia said that 1/3rd would struggle to pay a month’s mortgage if they lost their jobs.

Had Ms Yellen forgot to read the St Louis Fed’s survey which revealed that 45% of Americans can’t raise $400 in an emergency without selling something? USA Today reported that 7 out of 10 Americans have less than $1,000 in savings to their name.

“Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account…Breaking the survey data down a bit further, we find that 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.”

So Chair Yellen, we are not sure what dreamland you are living but to suggest that we won’t see another financial crisis in our lifetime almost guarantees it will happen. The Titanic was thought unsinkable until history proved otherwise. Money velocity is not rising and every dollar printed is having less and less impact. I thought it nigh on impossible to surpass the stupidity of Greenspan but alas you have managed it.

Mulligan democracy?

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One disturbing development in politics is the promotion of mulligans. The idea of ‘that is the shot I would have played if I had another chance’. Sadly some people think that is fair game and even worse, democratic. The lead up to the Brexit referendum almost a year ago saw “leave” and “remain” go at it. Months of campaigning, panel discussions and other forums were largely irrelevant. Both sides accused each other of lying and spreading falsehoods but ask yourself in the history of politics – if you believed everything that came out of a politician’s mouth you’d be lying to yourself. To host a second referendum would basically say ignore democracy until you get the result you want. Maybe like a modern day prep school sports event – everyone is a winner at St. Barnabus’.

People were well aware of the issues of Brexit going in. The idea of people being too gullible is frankly condescending in the extreme. Many long standing Labour voters went for “Leave”. They weren’t voting Tory by stealth. They took a view. It wasn’t just about immigration. They were feeling pain in real time, the valid threat of their future economic security. The higher unemployment rates and withering opportunities aren’t scare stories from politicians but here and now. For example the people of the Midlands didn’t need stats, Farage or Boris to sway them. Just like those that voted Trump – they were feeling the pressure of harsh economic realities that weren’t reflected in rosy government stats that were waved in their face as a testament to their superior leadership skills.

While Remainers can whine about ‘fake’ figures of how much the EU takes every week from the UK, immigration or the number of regulations that affected Brits, financial markets proved over the 12 months since the vote that the ‘Leave’ outcome didn’t crash the economy or skewer asset prices. In fact the idea of a potential Corbyn Prime Ministership sent the pound and markets into panic. If he was to get in then Macron will get his wish of a financial center in Paris. Investment money would vanish out of the UK. It isn’t an idle threat but a reality. Capital is global.

Some argue that had the people who thought ‘remain’ would be a foregone conclusion bothered to vote then the UK would have stayed in the EU. Maybe. They were given a democratic opportunity to exercise a choice and they didn’t. Many of the 1,000,000 new voters who signed up since Theresa May called the snap election who didn’t do so before the referendum had a choice a year ago. Do we give them a free hit? How do we truly instill the realities of a true democracy if we have to attach L-plates to beginners? It doesn’t matter one jot if there were enough dormant or eligible voters to defeat the referendum if they don’t show up on game day. Is the Premier League football FA Cup given to the team that won the most games til the final but doesn’t show up because of their for and against stats?

It is an important question because the lesson should always be that people must take their vote seriously every time. Even John Cleese is understanding this. If they can’t be bothered when they have a chance to vote then  that is self inflicted and we should have no sympathy.

Theresa May gave voters a democratic chance to give her a mandate and she got thumped. There were two parts to this. Some young voters were surely lured by the offer of free education and a chance to reject Brexit by the back door. Theresa May was too arrogant to think the population would roll over and give her carte blanche to carry out her plans along with a biting austerity budget for good measure. A refusal to do a debate vs Corbyn, a slapdash manifesto and dreadful performances when she appeared sealed her fate. Corbyn came across as the warmer candidate and simply campaigned better. Still an election and a referendum are two different beasts. Just because more voted for Labour than expected doesn’t mean they want an end to Brexit. They did it to send a message to May.

Still the idea we propose a second referendum is a bad idea for democracy. Unlike elections, referendums are yes or no.

Don’t buy the argument that people were sold a pup. That the elderly are bigots, racists and have no concern for their kids or the youth. That the youth should have twice the vote of the elderly because they’re on the planet for longer or the elderly should have their voting rights cut. Saying people are stupid is not a valid answer. Why not have an IQ test for voters to determine voting rights??  If lessons aren’t learnt through bitter experience then why bother holding elections or referendums at all. If anything this election showed through the higher turnout (68.7%) that the lesson is being learnt and the electorate has told politicians they won’t be taken for mugs.

The referendum was held, Article 50 was passed as an Act of Parliament and our Dear John letter was handed to President Tusk. The UK would be a total laughing stock to divorce and then ask to remarry again. Corbyn will undoubtedly have a much stronger say in negotiations and has a vested interest to ruin what little legitimacy May has left. She is left with a divided party created by her unwillingness to listen. The Tories are toast with her at the helm and the DUP alliance smacks of desperation. A Diet Coke Brexit is pointless. We’re in or we’re out.

The Conservatives won the popular vote despite the shambolic display although Labour took 60% of the votes from UKIP. What we can say is that politics is not like it used to be. The electorate is fickle. Loyalty is no longer a given and abandoning core party principles will see politicians punished at the polls. May must step down for the sake of the Tories. as the HMS Tory takes on water under Captain May, more will seek to abandon ship until she walks the plank.

This miscalculation by May will go down as one of history’s biggest political failures. Do not be surprised if we do get a second referendum but be very worried about the precedent it sets for the future. Democracy is at stake and even arguing that it is in the interest of the people to take a mulligan on this issue is effectively saying their votes don’t matter. That referendums have no meaning. Of course the Remainers will cite opinion polls that give them the answer they want to hear but as we all know polls are useless these days. May had the biggest lead and highest popularity in living memory yet got this result.