Mulligan Brexit again

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Rebel Tory MP Justine Greening is calling for a second referendum on Brexit to end a parliamentary deadlock. There was never any doubt that ‘leavers’ wanted OUT of the EU. It was pretty clear cut. “Leave the European Union ✅ or ❌” Not half in or any other form of compromise. At what point will politicians get it through their thick skulls that constituents do not want mulligan politics? If some don’t like the outcome, just keep swinging until can deliver the minority the result they wanted? Best of three? Why not conduct parliamentary elections this way? Swing and a miss!

UK PM Theresa May has shown utter incompetence in executing Brexit. She stupidly called an election which cost her a majority forcing her to side with the DUP just to hold onto power. She couldn’t read that the electorate was sick of voting as CM pointed out at the time. She was punished for it, despite the massive lead in the polls she had. One might almost think it was deliberate given the soft stance she has taken on Brexit and the total disregard for the referendum.

Despite jawboning last week there would be no negotiation post the resignations of David Davis & Boris Johnson she has had to cave in to hard line Brexiters (305 vs 302) on the Customs Bill. A narrow 303-300 vote to exit the EU’s VAT scheme post-Brexit was also reached. Shadow chief secretary to the Treasury, Peter Dowd said, “it took two years for the Prime Minister to reach her Chequers deal, but only two days for it to fall apart.” He is not wrong. May has bungled it so poorly one wonders if it isn’t deliberate.

What should be seen here is that politicians (from any party) voting against what their constituents put forward will be political suicide over this.  There is a genuine sense in the House of Commons that all of this will somehow wash over like politics has for decades.  While many might see the ructions inside the Tories as a godsend for Labour’s Jeremy Corbyn (to an extent it is), even he has to realise that almost 40% of his party’s voters wanted to leave, meaning the members from those areas that expressed their intent leaves mixed messaging for the party as a whole. Watch for a resurgence in UKIP.

In any event May needs to go. She should resign. It is unlikely that she will. She is even thinking of bringing summer recess forwards to reduce the chances of a no confidence motion although both Labour & Tory members have quashed the idea of this. 48 members must write letters to the 1922 backbench committee to call a no confidence motion and Theresa May would need to win over half the 316 seats held.

Yet we only need to look at drunkard EC President Jean-Claude Juncker and ask why any UK politician thinks there is merit in negotiating with an unelected mob that can’t walk in a straight line even when sober? Keep calm and Brexit hard.

1,000,000 under age of 25 have registered to vote since snap election called by May


More than a million people under the age of 25 applied for a vote in the general election in the five weeks after the snap poll was called. With the Corbyn free goodies bag and many of the youth against Brexit one wonders again whether Theresa May’s political gamble will backfire. The total number of UK parliamentary electors in December 2016 was 45,766,000, an increase of 2.3%, around 1 million, from December 2015. The gap of 12.2% would still still seem comfortable enough and the tragic Manchester terrorist suicide bombing will shift focus away from May’s muddled manifesto. This race maybe much closer than markets are betting especially as UKIP, The Greens and the LibDems slide into the abyss.


$2tn market loss on Brexit is a catalyst not the cause


Let’s be very clear. The Brexit vote is not the cause of global financial markets taking one of the biggest single day baths since 2007. $2tn is a lot of money but Brexit is a catalyst, not the cause.

Equity markets have failed to break all time highs for months. As I have been repeatedly calling, the world is in extremely poor financial shape. We are accumulating too much debt and the advent of negative rates is forcing investors to go further out the risk curve. I’ve argued for a long time that government market manipulation is going to have drastically negative impacts. The crash in Japan on Friday is evidence of the Bank of Japan’s abnormally high participation (c.60%) which damages free float and liquidity. That just makes market falls even more aggressively because the options to hedge out leveraged ETFs see large scale delta bleed on negative sentiment…i.e. the price of risk goes sharply up accentuating market panic…it becomes self feeding.

Here are a plethora of reasons in no particular order as to why it isn’t Brexit that will cause further market rot as much as it will be used as an excuse

Central banks have lost control of Velocity

Global debt doubled in 16 years to c. 300% of GDP

China bankruptcies up 53%,

US unemployed trend back to 66yr inflection point

Central banks already starting to panic 

Several EU banks heading for insolvency

China fixed assets at 16 year lows

So this is a small selection of global risks that can’t be used as excuses to blame Brexit. In fact this is why i refer to Brexit as a master stroke. The UK won’t want to be 100 feet from Europe when the financial house of cards comes to a grinding halt. Full flexibility in exchange rate, interest rates, taxation and democratically elected governments should pave the way for the UK and people will look back at June 23 2016 as a great day for the plucky Brits