That’s still a relatively meagre number of economists who predicted the financial crisis. I note at least 2 of those economists cited as predicting the crash were in favour of Brexit[Keen and Schiff] and 1 possibly 2 were in favour of remain. One of those two in favour of Remain were so for political reasons(or chiefly political reasons) not economic.
After a losing result, the leader is pretty much automatically in trouble. That this now applies to both Cameron and Corbyn is no surprise.
Why don’t you look at the graphs and see the changes in the longer-term context? The UK FTSE 100 was down in the 4000s not so very long ago.
First off, the FTSE 250 is reportedly a much better indicator of the British economy, because it includes smaller and more domestic-focused companies, besides various other issues discussed here.
Secondly, as I posted in this other thread in which you made similar comments:
Yes but if the voters are unhappy with his breaking his promises, they can vote his congress out of power in the midterms and he’s a lame duck. In the UK system if a PM grossly lies to win in an election and then takes a huge drop in popularity he can be challenged for leadership or a no confidence vote can be held.
So yeah there is deliberately checks and balances and second chances and do overs built into our political system. Those leave voters who somehow think we have to irrevocably accept a 52% referendum as the irrefutable will of the people for the next 30-50 years are lying just as much as they lied all through the campaign.
Not unless she wants to be forced into “retirement” at one of her country estates like George III.
In a longer-term context, we’re all of us dead.
Over the last two days, the FTSE 100 has regained most of the ground it lost since the vote, and the FTSE 250 is also rebounding, regaining 1,000 points, or about 40% of the initial loss. Clearly the big drop on Friday and Monday was driven by fear of uncertainty among investors, not by a rational evaluation of the economic situation likely to take place. Now that investors can take a deep breath, they’re realizing that there’s no need to panic, and that their initial reaction was too severe. In fact, there is no reason to believe that Britain’s economy will be enormously different as a result of leaving the EU, and many investors clearly think so as well.
So perhaps those who have run around dancing on the grave of Britain’s economy may have been a bit premature.
Would you have thought it wise to invest in the US stock market in late October, 1929? Perhaps you don’t, but you would be wrong – it was a rather lovely bull market after the crash and by the early spring of 1930 it had recovered nearly half its value. So perhaps it was “premature” to think that bad things were going to happen to the economy! But then the market thought about it for awhile, turned around, and nosedived again.
I’m in no way trying to draw an equivalence between the underlying events, but such are markets. It would be extremely foolish to believe that the road ahead will be not be fraught with peril and uncertainty, and that economic risks probably outweigh any likely benefits. The UK’s credit rating was just downgraded by Standard & Poor, and now it no longer has the top AAA rating from anyone. The most frustrating thing is that it seems doubtful that most of the Leave voters were aware of these risks, and many of them were hoodwinked into thinking about the referendum as simply an immigration issue.
There have been suggestions that other EU members might now follow in Britain’s footsteps, which I don’t think is likely, but if it happens, it shouldn’t be taken as a sign of prescience, but as the ill-advised removal of a foundation stone that eventually brought down the whole building. It isn’t going to be good for anyone. And please don’t try to imply (“dancing on the grave of Britain’s economy”) that anyone is taking any particular delight in this. Besides the fact that many of us have a good deal of affection for Britain, ultimately economic troubles on the other side of the ocean affect us all.
Question 1: Why was the Brexit vote such a surprise?
My context here is based partially on the final betting lines at Ladbroke’s, partly on the astonishment and incredulity being expressed around the world.
I understand the polling. I understand the consensus of “expert” opinion on the benefits of Remain. I understand the potential impacts of Leave.
But I also understand that EU-related issues poll very well on economic/market issues, and very poorly on governance issues, at least since the European Constitution. I mean, wasn’t the mere fact that Blair was going to put the European Constitution to a referendum seen as a death knell (even if it actually died in France, before the UK vote)? How did that history - what I would think would be the macro trend - get ignored?
Note: I’m not saying that Leave should have won, or even should have been favored to win. I am, however, surprised that more of the consequences of Leave were not internalized by the Eurocracy and media types.
Question 2: How/why did much of the European Constitution get crammed down on citizenries through the Treaty of Lisbon?
My American lens definitely affects me on this one.
I guess this is a two parter. From across the pond, the European Community seemed like a terrific success. The early EU, the same - even overcoming naysayers about a common currency. That’s why I don’t quite understand why it was seen as necessary to muck up that terrific economic union with a massive governance overlay. I understand the need for common regulations, and bureaucratic creep, and some central justice system. But the scope of the European Constitution/Treaty of Lisbon/European project seems materially different in kind (again, to these American eyes).
Second part: After failed referendums in France (France!) and the Netherlands about the European Constitution, how was it seen as a good idea to impose many of the same terms on a clearly unwilling populace by parliamentary fiat? With that history, I would have expected an exit prior to this.
Bottom line: It seems like no one - not even most Leavers - wants to split the economic union. But it also seems like Leave was the only choice to leave the political union. Why?
OK, those are my questions. I’ll hang up and listen.
And now the FTSE 100 has exceeded the pre-Brexit vote levels.
A mixture of bargain shopping and hope that the vote may never be put in action. If clear action to stop the separation does not happen it will drop significantly as time goes on and especially as leases expire and growth happens inside the EU. I know that my entire work for the next several weeks is around a plan to remove most of our systems, growth and headcount from the UK to our German offices. But those type of losses will not be seen on the books for quite a while, there is no reason for us to build anything in the UK now that it doesn’t gain us the advantages of having people/systems in the EU.
Remember that volatility is not the same thing as a recovery and a single data point is not a trend.
As stated in the article I posted upthread, “Stop looking at the FTSE 100 everyone. Seriously, stop it–avert your gaze.”
Per your link:
In any event, as I stated upthread, all of this market volatility is based solely on investors’ fears of what is to come. Nothing (legally speaking) has actually happened yet. As we speak, the UK is still in the EU. When and if the Brexit actually takes place, far worse may be in store for the British economy. Time will tell.
With all that said, to us across the pond, it seems like a remarkable set of circumstances that have led to a self-inflicted wound. It’s like watching a friend shoot themselves in the foot, then start hobbling around exclaiming, “I’m fine. Really I am!” 
I am willing to concede Brexit has made the UK’s economic outlook a little more insecure than it was. However, insecure does not necessarily equal worse. If there is a major economic shock ahead(the equivalent of, say, 2008) then the cause will not have been Brexit. The international economy does not crash simply because one tiny island, with something like 3.5% of world GDP, realigns itself marginally from the EU to outside the EU. Something more fundamental will have occurred to the world economy.
It seems 11 countries are looking at trade deals with the independent UK.
I liked the headline “Iceland: First!”. Reminded me of last Monday. 
But seriously: It is not really surprising that other countries would see an opportunity in Britain’s secession from the EU - especially if the general thought is that the country will be *needing *new trade agreements now. That usually means, such agreements can be had on favourable terms. On close inspection, most of the opportunities presented here appear to be either not that attractive (EFTA), not all that useful (Ghana) or pretty long shots (Germany).
What do you expect? We’re British, we don’t like to make a fuss…
Thanks for that reminder, I’d almost forgotten that…:mad:
It’s not a website I’ve heard of, so I’m not sure of its veracity. I’ll take it with a pinch of salt until I know better.
Huh. I’m reading this article where economist Andrew Lilico claims that the Brexit is to the advantage of the European Union.
He makes very strong arguments. Having the biggest financial center in the EU outside of the Eurozone may not have been the brightest idea, in retrospect. Imagine if Wall Street had their own currency, rivalling the one in the rest of the US.
The “Leave” win seems to have emboldened one of its factions:
David Cameron has condemned “despicable” xenophobic abuse after the EU referendum as figures suggested a 57% increase in reported incidents.
The country would not stand for hate crime, the prime minister told MPs.
“In the past few days we have seen despicable graffiti daubed on a Polish community centre, we’ve seen verbal abuse hurled against individuals because they are members of ethnic minorities,” Cameron said.
Police believe there has been an increase in hate crimes and community tensions since last week’s referendum. Initial figures show an increase of 57% in reported incidents between Thursday and Sunday compared with the same days four weeks earlier …
And here’s another story. After the 9/11 attacks, when the NYSE opened the Dow plunged thousands of points immediately. Then traders took a deep breath, thought about the situation, realized there was no reason to expect economic calamity, and started buying. By a few days later, the Dow made up most of the initial losses. In the long term there was no economic catastrophe from 9/11.
There are many similar stories.
Politicians are always trying to convince ordinary people that ordinary people are in desperate need of strong leadership by politicians. This generally means endless threats of the horrible things that will take place if the government has a little bit less money and power, or if the people get to keep a little bit more of their money and freedom. Those with good memory may recall an event in 2013 called “the sequester”. President Obama had signed a very small budget cut 18 months earlier. As it was about to take effect, he and his allies told us that it would cause an enormous disaster, with job losses, harm to schools, elderly not getting food, economy shrinking, etc… The American people ignored Obama’s fear-mongering and the budget cuts went into effect. Then, none of the threatened disasters actually happened. The economy grew, rather than shrinking. Unemployment went down, not up. Schools stayed mediocre just like before. The elderly did not die from starvation.
That’s the way it works. Politicians warn of economic catastrophe, which doesn’t occur.