phoenix, good to read a rare, balanced post, on the bb.
My take on A50 is, whilst it is known about, the triggering of such will be used by the markets to increase volatility, with the media hype over such action. There are still many who think a 'Knight' without the shining armour, but a holding a huge pension from the EU, will prevent it ever really happening.
I don't think A50 in itself will 'do the damage' as I have said before, similar to when the UK declared war on Germany, on the 'day' of declaration, nothing happened, no bombs, no-one here killed, it is the 'starting' point of what is 'likely' to happen, and with our wonderful ultra negative media, will be used to the max on the perceived horrors that now await us. And, like the war, some imagine it will be over soon, others, see a long, hard slog, with nothing ever being quite the same again.
IMO, it will be when the talks turn nasty over the UK's dominant fiscal position, that will really bring us down.
It would be foolish to imagine that the UK could carry on profiting from handling the EU's transactions without any retribution, sooner, or later.
If you left your job, causing your large employer problems, and costing him future profits, you could hardly expect to take a 'rake off' off of every other employees wage packet for the rest of eternity.
Your point on low interest rates is valid, yet as you say, it is the things most don't think about which often hurts the most. Hence my assumption that as interest rates rise, HMG, then, safely out, will force banks to molly coddle those debtors who would otherwise loose their homes, thus forcing an impoverished Government to house them, and, will, instead, make banks freeze payments etc, all to the shareholders costs.
Don't think it cant happen. I heard on the radio, only yesterday that many people with tons of points on their driving license who should not be driving are allowed "If the loss of such would cause them to loose their home or job".
Fine, perhaps, in exceptional circumstances, but the public now get wind of 'cop out' situations, as say Lloyds are forced by HMG to limit mortgage payments for what they HOPE will be the 'exceptional' few, how long before the 'many' jump on the bandwagon, claiming that they are in need of help because they only had 2 weeks in the South of France, or they had to make do with a three year old car?
Conjecture, certainly, but imo likely, as no Gov, will want the legacy of homeless, salt of the earth home buyers, now turned into homeless people, forever mentioned at each election time, by opposing parties.
HMG cant afford not to eventually raise interest rates, they cannot afford to re-home those, on the edge (and the band wagon jumpers), BUT they know some banks shareholders, then hopefully relieved of PPI claims who can.
Why are so many convinced the serving of notice to the EU under article 50 will produce a bloodbath?
It might be many things but the stock market is not stupid enough to think article 50 isn't going to happen. The reaction to the UK leaving the EU came on June 24th last year. The serving of a notice will make little difference to the market, IMHO.
Yes, the market makers do often try to take advantage of circumstances and shake out sellers so perhaps there will be some of that when we do serve notice but fears of a bloodbath are being overdone.
I'm not saying this because I wear rose coloured glasses about Lloyds or any other share, but too many people are overlooking one basic fundamental about current economics. Namely, interest rates are so horribly low (a terrible mistake in my view) and so money has to go somewhere. It will continue to head into equities, especially those wth dividends and prospects.
Now, does Lloyds possess the latter qualities? As we currently stand it does. i say currently because things will look different for all of us once the hideous reality of what we have done to our economy hits home in the early years after we have finally left the EU.
But for now and the near future Lloyds look well placed to me. Yes, maintaining income and thus increased profits is always hard but let's not forget the huge amount of PPI provision. Year after year the provison is being added to. But I doubt it is being used. Hence, eventually there is a huge among of money going to find its way to the bottom line and then to shareholders.
Then we have the handicap of having an extremely large seller, HMG, dumping shares on the market again and again. In the end, the price of any share is dictated by supply and demand and, to some extent, the future interpretation of such by the market makers. Therefore, take out a huge supplier and I would hope supply starts to outstrip demand.
Of course, if only it was that simple. To begin with, much can go wrong that none of us have even thought of yet. In my 56 years I have surely learned that it's what you have never thought of which most bites you in the backside!
To add to the HMG issue, Lloy is the largest traded share on the London market. Hence, we are unlikely to see large jumps north until that situation end, if it ever does.
There is then the matter of the Lloyds being so UK focused. Here is where the future problems lie, IMHO.
The stock market will take a dive when our trade figures start to come in from the first few years of us being outside the UK. If anyone thinks it will be a painless switch from cosy, tariff free EU markets to fresh, world markets they are deluded. As an example, can any poster on here name me a company they personally know that is gearing up for fresh markers in the non EU world. I can't and it will take years before the gap which will be left will be filled.
So, short to possibly medium term Lloyds looks good to me but after that, well all
Smilingassaain, I feel the majority of shares in Lloyds will be held in institutions such as pension companies who will be governed by their own rules and regulations so maybe not the knee jerk reaction that you expect.
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