Saturday, June 4, 2016

The Gimlet Eye: Brexit or Not to Brexit ~ Rockin' the Casbah



This morning I was asked by an undecided voter to spell out in layman's terms why we should leave the EU. It's not so easy because all of the populist arguments are grossly oversimplified or wrong. This isn't a decision where you you can be spoonfed with easy answers. What is clear though is people are fed up with the torrent of bullshit.
So to put it in basic terms I keep coming back to the question on the ballot paper. The question leaves it to the individual to interpret what the EU is and whether we should leave it. Though if there were any honesty at all it would say "Do you want Britain to be a subordinate state of a supreme government for Europe?"
And that is really just a values based decision. A matter of personal preference based on how you view Britain. And the two prevailing opinions appear to be thus:
The Remain view is that that Britain is small, weak, obsolete and powerless. Because of that we must be told what to. We lack the capability of managing our own affairs. And because we are apparently stupid, if we leave the EU we will vote for a hard right wing government who will take our rights away. The view is that we would have no rights at all because we are passive and will let the government do as it pleases once we are out. The view is that we will instantly rip up green rules and regulations and start deliberately polluting our environment and slam the borders shut because we are basically a bunch of xenophobes. Put simply they do not like ordinary people, they do not trust them and they definitely do not believe in democracy. That is why they want the EU.
The Leave view is that Britain is more than the sum of its parts, that we are something exceptional with a track record to prove it. We think we can manage our own affairs, that we will do well outside the EU and we place our trust in the people to make it work. We believe Britain can do better outside because the world has evolved in ways that the EU cannot adequately respond. We think leaving the EU will help us fix a lot that is broken and will bring about major democratic reform.
So since everyone is scaremongering, who is right? Well, if you haven't worked out by now that both of the official campaigns are full of shit then you should probably seek medical attention. Leaving isn't going to cause world war three, it won't cause the seas to boil and it will not rain blood. But by the same token, it is not going to bring about a new utopia where we can do as we please and stick twos up to Europe. Not gonna happen. In a connected world we are all somewhat at the mercy of globalization. That is why leaving is not the big deal either side believes it is.

We will keep freedom of movement. We have had visa free arrangements since long before even the EEC. We are not going to look inward. We won't have a choice. Brexit mainly means we will be free to start our own trade talks and say no to EU proposals. We will still adopt single market rules but they will come from the global level rather than via the EU. That means we will be outside of the EU protectionist zone so we will in fact be more open to more places. It creates opportunities.
In all honesty leaving the EU probably will cause a short recession but we will be better off in the long run because it will settle a forty year long national dispute that isn't going to go away until it is resolved. My own view is that we should never have gone in in the first place - and we will have to pay a price for that mistake - but we will pay a bigger price the longer we stay in.
We can either leave now under circumstances we can control or we leave later on more hostile terms. I think leaving now is the safer, wiser option. It's a shit sandwich but if you have to eat shit it's better not to nibble. Swallow it whole and swallow it now. We will live to regret it if we chicken out. Remaining in the EU is going to solve nothing at all and we will be back here again and again having this same argument.
Every now and then we need to yank the leash on our politicians and shake things up a bit. They have been left to their own devices for too long and if we don't rein it in now, they will sell us out completely. If we let them do that then we will have an even bigger mess to sort out later. It really is time for a clear out and some genuine reform. 
Brexit is the only way that is going to happen.
Let's do it.

The Gimlet Eye: Sterling; Spring line, Positively Fashioned



27 May
Sterling continued to move in a positive fashion on Thursday, reaching a high we last saw in February against the euro and pushing close to a 2016 high versus the US dollar. Positive sterling sentiment however started to cool as Thursday progressed, despite economic growth throughout the previous quarter meeting the 0.4% target, but sterling still remains in a strong position heading into today. Should there be any surprises from the ongoing Group of Seven (G7) meetings, sterling could find some further support.

3 June
A lack of positivity in either data releases or sentiment has made it a difficult week for both sterling and the euro to gain any momentum in either direction. Today we have key releases in both the UK, for the service sector, and the US, related to employment, which are likely to drive sterling one way or the other. Which way is tricky to predict and it’s even trickier to guess what will happen in the medium term given the closeness of the EU referendum.

 Sterling was reasonably steady yesterday despite Mays Purchasing Managers’ Index (PMI) for the UK construction industry revealing a lower-than-expected level of growth throughout the sector.

A poor start to the day saw sterling lose ground as growth in the construction industry was reported to have stalled in May as worries on a possible Brexit weighed on this sector. However, the UK currency was able to recover some ground throughout the afternoon as European Central Bank (ECB) President Mario Draghi spoke following their monthly meeting. His statement highlighted the point that the ECB would not hesitate to act should they see any unwanted tightening in fiscal conditions.