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Ariella
Ariella
8/22/2016 9:42:54 AM
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Re: And Then?
@Adi thanks for adding your insight. The fact that the UK never gave up its own currency made me think that it did think of itself as apart from the EU even while it was officially part of it. Given that long-standing difference, I really don't believe you'll see a mass exodus of banks due to Brexit. 

Lower exchange rates are not wholly bad if the UK also exports to the EU because it makes it own goods more affordable to those buying them. There's more detail on that here: http://www.economicshelp.org/blog/1882/economics/winners-and-losers-from-weak-pound/ Certainly, if you want a favorable balance of trade, you don't want your own currency to be so strong that what you make becomes to expensive for anyone outside your own country and that even there they may turn to imports because they are relatively cheap.  The same site goes further into that point here: http://www.economicshelp.org/blog/21066/economics/will-brexit-cause-recession/

 

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Adi
Adi
8/22/2016 8:52:47 AM
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Re: And Then?
@Ariella, @mpourayan - Ray Le Maistre wrote a piece on this in Light Reading, from a Tech/telecom perspective...http://www.lightreading.com/services/cloud-services/brexit-its-hard-to-see-an-upside/a/d-id/724409

I think judging the economic impact today is difficult. The investment powering the economy today was made probably 3-6 months in the past. We'll only find out about changing sentiments over time. For example, the higher cost of imports due to the fall in the value of the pound hasn't hit consumer and indutsrial markets yet, since much of the procurement was already done. It's the next round of contracts that will start to affect us.

If banks decide to leave London because of passporting, they won't do it for months. That's when the job cuts will hit. 

The PMI, a more forward looking indicator, has fallen sharply

http://www.tradingeconomics.com/united-kingdom/manufacturing-pmi

So it's likely we'll feel pain. Just not clear how bad it will be. And that's going to be based on people making bets on other people's behavor. For example, if a couple of big banks move, they'll probably set off a stampede. 

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mpouraryan
mpouraryan
8/18/2016 1:35:35 PM
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Platinum
Re: And Then?
I look forward to it as well in order to provide the "firing line perspetive".   

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Ariella
Ariella
8/18/2016 1:02:25 PM
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Re: And Then?
@mpouraryan I'd love to get Aditya's take on this as he is on the inside. 

 



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mpouraryan
mpouraryan
8/18/2016 12:32:11 PM
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Platinum
Re: And Then?
I am well aware of the first vote--but if you see the current statements by Scotland's First Minister especially as underscored with comments she's made over the past 2 days.  I am also of the view that Britain's view has diminished--no doubt--and they have "packed a bigger punch"...but Brexit has hastened it as it hsa undermined business confidence in a major way.  I get that some want to be more limited--but for any transformation to succeed, there needs to be a broad view--and Britain has always had a "broad view" and one of the things that it did (that also helped to sustain it since the 1970's) was for it to be part of the Community and be one of the driving forces behind the Union--That's the tragedy of Brexit.

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Ariella
Ariella
8/18/2016 12:24:25 PM
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Re: And Then?
@mpouraryan but some of that happened before Brexit. Scotland got to vote on leaving the UK and decided to stay. But already in the last century the control of the UK was much diminished. And it's only been part of the EU since the 1970s (a very short period of time for a country with as long a history as England)> 

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mpouraryan
mpouraryan
8/18/2016 11:09:43 AM
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Platinum
Re: And Then?
It is not just trade agreements--Britain has integrated itself in a major way and in my view has maintained its' political status as part of the Big-4 of the European Union-I would argue (as many have) that we may end up seeing the break up of the United Kingdom in our lifetime--Take a look at the rhetoric coming out of Scotland, for instance.   

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Ariella
Ariella
8/18/2016 9:11:11 AM
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Re: And Then?
@mpouraryan Other than figuring out what the trade agreements would be as a result of the change, do you anticipate other things becoming challenging? 

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mpouraryan
mpouraryan
8/17/2016 11:06:00 PM
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Platinum
Re: And Then?
Apparently you misunderstood my comments--what I tried to underscore is that because of Brexit, things will be very challenging in the UK...and my comments were meant in this regard.  

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Ariella
Ariella
8/17/2016 9:48:59 AM
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Re: And Then?
@mpouraryan which reports are you looking at? Even the Guardian (strongly left-leaning and opposed to Brexit) had to acknowledge this: https://www.theguardian.com/business/live/2016/aug/17/uk-jobless-claims-expected-to-rise-following-brexit-vote-business-live

 

Also in a piece entitled "Outlook brightens for UK household finances"

Households were less pessimistic about the outlook for their finances in August according to the latest survey from Markit.

It followed a slump in July as consumers were concerned about the impact the Brexit vote would have on disposable incomes.

Expectations for finances over the next 12 months picked up to 49.8 on Markit's household finances index in August, from 47.1 in July. Anything below 50 signals deterioration, so households are still feeling cautious.

The highest earners and private sector workers were the most confident about the outlook for their finances.

Jack Kennedy, senior economist at Markit:

The outlook for household finances stabilised in August after last month's wobble following the Brexit vote. Expectations regarding future finances improved to the highest for five months, while current finances remain under pressure but no more so than the trend seen over the past year-and-a-half.

Concerns seem to have eased in line with the removal of some of the immediate political uncertainty arising from the shock referendum result, combined with a strong monetary policy response from the Bank of England aimed to cushion the economy and head off any lurch towards recession.


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