Member Info for steph

https://www.theguardian.com/commentisfree/2019/jan/26/brexiters-never-had-a-real-exit-plan-no-wonder-they-avoided-the-issue

What a self imposed economic mess we are in. Confusing for investors to be sure. My view is that the 52% who voted leave should now be required to vote for a specific practical Brexit to complete the democratic process started by the 2016 referendum. The default position is the status quo not crashing out -which was hardly discussed in the 2016 referendum. That is not obstructing democracy but completing it.

It might not be a full-blown catastrophe, says Andrew Goodwin of Oxford Economics, but, no deal would still cause massive economic disruption and shake confidence. “Markets have only priced in 20-30 per cent chance of no deal. Obviously if no deal actually happened I wouldn’t be surprised if we saw a 10 per cent drop in the value of sterling,” he says.

I am surprised on the upside on our jobs numbers given 2.5 years of Brexit uncertainty. Maybe the economy warts and all wants to jump ahead and is in a holding pattern due to Brexit. Any orderly resolution may be enough for a few good years.

But what is the linkage to our sp of your posting? Is your thesis that the market panic is overdone and that even the hardest most disorderly of brexits is not going to do short or long term damage? If so you should be buying like crazy.

Hard to think of a better description of suddenly exiting all our existing traiding and other international relationships. It would be uncharted territory to be sure. If one thinks as you do that in the long run it will be worth all the short term disruption that must be comforting. For me I don’t see an upside of an abrupt economic change. Uk will lose credibility as a stable partner to sign deals with. It’s all bad to be unplanned and abrupt.

As Lucian Cook, head of residential research at Savills, puts it: “If Article 50 is extended in a way that reduces the chances of a no-deal Brexit occurring, it should give buyers a bit more comfort over their future household finances and confidence to transact. But no market responds well to uncertainty and without a clear plan for what happens next, we are unlikely to see an end to buyer caution or an early stimulus for house price growth."

https://www.standard.co.uk/news/politics/brexit-news-latest-likelihood-of-second-referendum-has-risen-sharply-data-shows-a4047241.html Odds of crashing out only 5% Odds of staying in or very soft Brexit around 50% This is an “improvement” on two weeks ago so maybe why the building sector went up in spite of the political chaos

Thank you for your excellent analysis below.

I just can't see the catastrophic recession or financial crisis that justifies this SP. I think it is just the market burned once in 2008-9 thinks the whole sector is just as fragile and overleveraged as it was and that the banks just as likely to go into meltdown as they did.

A good time to build up a long term stake in TEF and the sector. I can't read the link between future political developments and short term SP moments anymore. The recent rise over the last 2 weeks against a depending political crisis is just too random. Glad I did not disinvest in my ISA but kicking myself not to have taken a punt in my spread at 2.85.

Trying to read the mind of Corbyn on Brexit is like trying to imagine what type of animal passed by from a few specks of dried poo. Can be done but needs a large forensic laboratory and a lot more evidence to do so. Corbyn and the Labour front bench crucial in any realistic pathway out of this.

I think what is emerging on the Labor side (with a potential parliamentary majority behind it) is a policy that any deal (May's or Corbyn's) needs to be verified by the people including a deal a future labour government negotiates. In short the 52% who voted leave will also have to vote for a specific Brexit to compete the democratic cycle. I think the nation will wear that. Not enough to have a protest vote against something. In a democracy that in the end of the day needs to govern need to have something specific to replace it. Similar situation to Australian attempts to become a republic. Majority in favour of dumping the commonwealth but no majority on what specific system to replace it.

Corby himself not fussed if leave or remain win such a vote so in some bizarre way well placed to help frame the question. My preference is to have all leave options plus remain on such a ballot with a single transferable vote applied until one option no matter which it is gets over the 50% barrier. Let Rees Mogg and Farage campaign then for their hard Brexit openly with a clear pathway to win.

Risk no deal or "managed no deal" would win but I can't see how else this whole fiasco can be put to bed. Denying the no dealers their chance to win and put their case strait to the UK public will feel like a stich up and cause instability and problems for a generation.

Have to trust the people voting for something sensible after what will be a long and interesting debate on our new post colonial role in the modern world. The only way to close this Pandora's box is more direct democracy not less.

why on earth is our SP rising amongst this spectacular political chaos. It breaks any rational thesis.

Not just TEF (which might be some company specific good news coming or a singe investor) but whole UK sector the same.

It it related to the odds changing of no or mild Brexit?

Of course all this uncertainty in UK and US keep interest rates down so maybe there is a sweet spot of enough political chaos to keep bank rates down but not enough to hurt too badly the real economy. After all jobs and GDP still growing in both US and UK.

ON anouther note embarrassing that Greece feels sorry for us for being ungovernable. Pot calling the kettle black but that is how far we have sunk in 2.5 years that they can credibly say something like that. Bad luck we have the wrong PM for the times but really bad luck that comes alongside with the wrong opposition leader at the same time. Neither fit for purpose. Both rigid even delusional on what needs to be done.

Pound and our sp goes down

The best case for a majority of investors would be another poll on whether Britain should leave the EU, which could boost the currency to $1.35, while the worst case - leaving with no deal - would see the pound drop to $1.15, according to analysts surveyed by Bloomberg.

As an investor who just wants to bet on sector news, company strategies and sector trends living in an era of historic parliamentary gyrations on our fundamental trading relationships is not fun. I think of myself as a bit of a political analyst but I don't feel confident enough to bet on the analysis anymore. Just too much uncertainty.

I really don't know why we just had a 50 point rise form lows just 2 weeks ago even with hindsight.

I suspect the endgame is now more likely than not a referendum with remain and May's unloved deal on the ballot. When that comes it will be good for our SP but I am not willing to bet on that outcome more than my current ISA holding. Fear ahead of greed.

May is wrong to say that not voting for her deal will discredit politics. That ship has sailed unfortunately. The trouble with any Brexit is it does not solve the problems that stimulated many to vote for it -and probably makes them worse. So in time Brexit will led to more alienation -except for a relatively small number of sovereignty purists who see greater sovereignty as an end in itself. However for every passionate sovereignty purist is an internationalist with equal passion. It is a zero sum game.

A deal as controversial as hers if implemented will not only frustrate those who want a harder Brexit but will alienate remainers from politics. If a referendum on the two options is fought and won by one side at least the other will feel it was not a stitch up.

We could have had a vote on different Brexit options with remain not on the ballot (ideally before triggering article 50) but I think the time and the enabling Parliamentary votes has passed for that. With remainers able to exercise "losers" participation that process would have probably resulted in a milder Brexit than May's. May did not consider that path to keep her ERG on side. It was all driven by internal Tory politics and not the national interest as May asserts.

Corbyn by sheer stupidity rather than brilliance is ending up in a situation where we probably get a referendum that can reverse Brexit without Labour taking most o fth blame for that. However it will not help make Labour more electable. The public rightly thinks Corbyn has been maneuvering for party political advantage rather than high principal on this. Just anouther politician and if Corbyn is just anouther politician why take the risk on his controversial left wing leanings. He has missed his chance to show leadership on the big issue of the day.

Rising on strong volume Good sign Maybe shortest closing maybe just s fund building s position

yes Jarndyce v Jarndyce to be sure

It was a poisoned chalice to be sure to be PM just after the referendum vote. Even a much more skilled operator would have been under intense criticism by now. If they had worked effectively more with the opposition a much milder Brexit would be in the works and the ERG would be even more livid with support from sectors of the mainstream press.

May did not help herself by being by instinct a very private person who works closely only with a few favored advisors -some of whom like Nick Timothy were idiots. She brought into her confidence nobody who was an expert in trade or the complex existing EU arrangements. Many problems seem to have hit her by surprise.

Just the fact that we all call this proposal "May's deal" is a massive political failure. Some sequential democratic process of choosing the type of Brexit would have flushed out supporters who believe May's Brexit while not a preference is still a good compromise. They are not in a forgiving mood right now after being 100% ignored.

completely agree that the "deal" may has is a pretty good compromise between a hard and soft Brexit. If that is what the 52% actually wanted she would be riding high in the polls.

Trouble is the 52% wanted different Brexits as well as wanting some promised Brexits that were clearly in Boris Johnson unicorn territory.

Best parallel is the Australian vote to come out of the commonwealth and dump the Queen as head of state. While that had a majority no alternative system of governance had a majority and in the end they stayed. No riots in the streets over that.

The responsibility of UK executive government is to develop legislation that can pass the commons. That is the basis of our whole system. Whatever Brexit May was perusing she needed to achieve that in the end or what was the point? . She has failed and thus we are thus entering a constitutional crisis. There were ways of getting majority vote with a different more open process. A vast majority voted for article 50. Her interpretation of Brexit was never tested in Parliament and never had enough support from her narrow coalition government.

If I had been May (besides a white paper with all the Brexit options to be discussed with Parliament in the end voting on a single one before article 50 was ever triggered) I would have promised to put my deal to a referendum vote from the start.

She should also have more openly campaigned on her deals basic principals of being a half way house between a full and partial Brexit. Trying to ram it through parliament is gathering opposition that need not exist. Her red lines and speeches identified ECJ and free movement as bad things that should be stopped. Once you do that why not go all the way and have none of it? She has not until very recently been making the case for a compromise.

ECJ and free movement are in fact policy choices with reciprocal benefits that her half way house might strike a reasonable balance. However, she has never talked about the benefits to protecting British industry of the ECJ in adjudicating trade disputes (we usually win) nor noted the benefits of free movement for UK nationals. She should not now be surprised that many don't understand why her half way house is desirable when she herself implies that the whole Monty is in principal better.

I'm sure she is a nice person but PM's are responsible to get their legislation through Parliament and if they can't they should either change policy or resign. Stubborn becomes delusional very quickly.

? ?
a novel written by Charles Dickens in 1852–53. It is the story of members of the Jarndyce family who fight each other in a court of law about money and property that belongs to the family. The legal system is so complicated that the case lasts for a long time, and they have to pay their lawyers so much money that in the end none of them gets anything.

Yes we will all have different opinions about Brexit. It is a good thing that we do on this board so we do not get into group think about the material impact on TEF's market and prospects.

While a remainer if I was asked to advise either of the main parties (which I clearly was not) post referendum I would have recommended Brexit but in sensible bite sized stages. Start with Norway plus and then gradually extricate ourselves from the EU starting within 2 to 4 years coming out of the customs union (Norway with a customs border down the Irish sea) so we can have independent trade deals. Further distancing (Canada plus, out of the common market and out of free movement) could have been taken after careful multilateral negotiations 6 to 10 years out.

May's big mistake was biting off more than we could chew and trying to ram that down a reluctant Parliament by liming debate on alternatives. Now she has endangered Brexit itself by pi__ing everybody off.

It takes a decade to rearrange all our global trading relationships. Why not do it in sensible steps? Doing it in a chaotic rush is not fulfilling the referendum result. People voted for Brexit but also were promised it would be easy to transition to a new global relationship. It is not easy and in the real world a step by step "conservative" Brexit is on balance the best way to fulfill the instruction of the vote.

Those who want a hard Brexit worry we will never keep going towards that "Canada plus" endgame if we stay in the single market (Norway) but if it becomes the will of parliament and the people that is democracy is it not. Nobody owns the interpretation of what type of Brexit 17.4m voters had in mind. What type of Brexit was not on the ballot.

A sensible approach would have been a white paper and Parliamentary votes (and perhaps a referendum without remain on the ballot) on the Brexit options before triggering article 50. May tried to personally and at times quite secretively control the definition of which Brexit and her version is unloved and has been reached without a very public sequential process of elimination.

A spectacularly unskilled politician now facing the reality she has not the votes to implement what she has worked on for 2 years. 300 years of Parliamentary precedent is almost certainly now going to be torn up to compensate for her lack of governing skill. Worst Prime minster since North lost the colonies in 1776.

Terr I've long stated a personal preference for remain (which is largely independent from the economics, I like amongst other things my European citizenship which is about to be taken away) but try to keep that to myself when blogging about impacts on TEF as this forum is about TEF and not a debate about Brexit itself bad or good.

As an economist I have not found a credible argument for economic benefits of leave. I know there are one or two outlier economists that think after the initial disruption will be a net gain but those models rely to a large degree on the hotly debated economic benefits of a degree of deregulation that I don't think the UK public will tolerate. SO we will have a funny situation of voluntary alignment with much of EU regulation (which we helped write) preventing us from getting properly into bed with the Americans.

Taking away the NHS health access guarantee likely concentrates minds of those on the margins of employment. Some workers in the US put up with a lot of low paid nonsense at work just to get health care for their families. Deregulation of other workplace assurances can add GDP. An anxious workforce often works harder and for lower wages increasing comparative advantage. The societal impact though is not what the UK public have vote for -as yet. Low wages also slow needed productivity improvements.

Even if we overcome that democratic obstacle to deregulation I know something about NAFTA and the trade disputes with the US from Canadian and Mexican exporters. They take years to be heard at all and often never really get resolved. 'Might makes right" When a mouse lies beside an elephant it often gets squished.

I suspect in the last week the odds of no brexit or a very mild brexit have gone up while the odds of crashing out (no deal) have not materially increased.

The market (measured by movements of the pound) has been remarkably consistently linked with the news of Brexit. News which indicates a more likely Brexit and/or a harder Brexit drive the pound down. The reverse sees pound recovery. The currency markets assume that Brexit is bad for the UK economy and this means slower growth and lower interest rates (due to slower growth and thus less wage inflation) both driving the exchange rate down.

Our UK housing sector seems to move the same way -although sometimes with a small lag, or sometimes not the same amount or sometimes (as with last week) greater than the pound moves, but always in the same direction.

It must be possible, if not already likely, that May to save her deal will allow it to be tested by referendum. The necessary delay of article 50 would be approved by EU and the combined options would draw the parliamentary votes of remainers and a good chunk of her "mixed deal" cabinet.

Not a certainty remain would win that but even if May's compromise deal won it would provide more certainty than now so good for the markets.

Labour probably prefer May to blink first in this game of chicken and propose a new referendum. Cowardly but papers over the spilt in the Labour party and avoids the front bench making hard choices.

https://www.telegraph.co.uk/property/uk/englands-housing-crisis-stock-low-just825-homesfor-every-1000/

long term the sector has growth potential and TEF in particular can fill that market opportunity.

Interesting TW is back to 15,000 units per annum which was it's pre crash volume when the 5,000/unit per year Spanish arm is excluded.