Before the link list, a Brexit update. If you don’t like the odd bit of politics here please do skip down to the articles – there’s plenty else to read this week!
Time heals most wounds – including the self-inflicted – but 15 months on from that vote, we’re still motoring ahead with our great populist mistake.
As Winston Churchill noted in The Grand Alliance Vol. 3 [1]:
Governments and peoples do not always take rational decisions. Sometimes they take mad decisions, or one set of people get control who compel all others to obey and aid them in folly.
For those who’ve not been keeping up, a quick recap:
- Yes, we are going to pay a multi-billion bill before leaving the EU
- No, there is no extra money for the NHS
- Yes, subsequent post-vote reporting has confirmed that Brexit is a logistical nightmare, from Ireland [2] to atoms [3]
- No, Frankfurt isn’t too terrible [4] to play home to American bankers
- Yes, the EU is united in dealing with our
pathetic tantrummighty negotiators - No, the Eurozone hasn’t collapsed. Rather, the economic cycle has continued to turn. (The EU is now growing faster than the UK.)
- Yes, the EU has signed trade deals with Canada [5] and Japan [6] since the Referendum
- No, the UK won’t get a better deal by being a smaller country with less bargaining power
- Yes, clever EU citizens are already being tempted [7] to leave the UK
- No, the French didn’t vote in the fascists. (Our own rash decision – and the other one over the pond – probably gave them pause).
- Yes, we are probably going to keep obeying EU regulations, including via the European Court of Justice [8], post-Brexit
- No, scaring away [9] skilled EU citizens hasn’t cut net immigration to the ‘tens of thousands’ yet (and Brexit won’t either, because much of net migration is from the non-EU and we never did anything about them before the vote)
- Yes, it’s true our economy didn’t slump in the wake of the Referendum result. (I was wrong footed there, but my bigger fear is for the long-term hit anyway)
- No, there has been no great export boom [10] due to the cheap pound
- Yes, future generations of UK citizens will be unable to live and work anywhere in Europe like their parents and grandparents could by right
- No, there’s no evidence this curtailment will do anything for the disaffected and angry people in slow-growth provincial towns, except reduce the tax receipts that pay for aid and benefits
I could go on, but it’s too depressing. How often do rational people – as opposed to mobs on the streets – get together to decide to do something against their own interests? To negotiate a worse economic outcome? To cede power?
Perhaps in suicidal religious cults. Not much else springs to mind.
About the only good – if unsurprising – development is that things are going slowly. As Tim Hartford puts it in this week’s FT [11] [Search result]:
The British people have dealt the British establishment an unplayable hand: a parliament strung out between several lunatic fringes, and a referendum result that is hard to interpret and even harder to deliver.
With the prime minister powerless, her ministers are showing signs of quiet realism.
Yes, the country is chugging towards a train-crash Brexit, but at least our politicians are tying fewer hostages to the tracks.
To return to the Churchill quote above, what rational people would conclude at this point is that we should get off the tracks.
But at the moment, the democratic symbolism foolishly placed in the Referendum – even by many Leavers – means the best version of getting off the tracks from here is probably some sort of fudge that looks like a Brexit, but that doesn’t walk or talk like one. A fake Brexit.
But who knows? Perhaps if we do drag it out for long enough it might never happen. Better than any alternative, as far as I’m concerned.
Matthew Parris for one says Brexit is dying [12]:
“Brexit is in terrible trouble – and with every month that passes, the difficulties become clearer, and the Remain side of the argument becomes stronger.”
Fingers crossed.
Still crazy after all this year
Of course the fallout from not-Brexiting would now be terrible, too, especially if it was called off any time soon.
That’s because because enough angry people came to believe Brexit would solve problems that are in reality probably close to intractable.
I’ve come to understand over the past 12 months how the Brexit vote reflected genuine anger and disquiet among a chunk of the population who feel that the world isn’t going their way. (Almost inexplicably, in the case of the comfortably off Barry Blimps [13], unless you go down the identity politics rabbit hole).
But I’ve seen little to show it has much to do with the EU.
What I think took the vote from a minority of committed Eurosceptics to a winning majority were wider forces like globalization, technology, income inequality, urbanization, and fundamental terrorism.
And then was the misinformation campaign that’s been much debated in the subsequent year.
Happily, researchers have found that as we learn to cope better with social networks and their ability to distort reality (and as those networks get better at policing themselves) we might see fewer crazy years like 2016.
As Bloomberg reported [14] concerning one academic deep dive:
The study does offer one positive conclusion: Broad awareness of fake news should tend to work against its success. Campaigns were much less successful when individuals in the model learned strategies to recognize falsehoods while being fully aware that purveyors were active.
This suggests that public information campaigns can work, as Facebook’s seemed to do ahead of the French election in May.
In other words, fake news is like a weaponized infectious agent. Immunization through education can help, but it might not be a comprehensive defense.
Either way, it’s too late for Britain, which could be sliding towards a situation where even the food chain is disrupted.
That’s not me being a doomster – it’s the supermarkets [15]:
Failure to find an agreement on free trade within Europe before Brexit day is likely to result in gaps on UK supermarket shelves, increased waste and higher prices, retailers have warned.
More than three-quarters of food imported by the UK comes from the European Union, but if the UK does not agree on a transitional period or a deal when it leaves the bloc in March 2019, World Trade Organisation rules will apply.
This means that goods coming from the EU will be subject to the same custom checks, tariffs and regulations currently in place with the US, with some 180,000 extra firms drawn into customs declarations for the first time.
Let’s hope that a shortage of Werther’s Originals [16] leaves a sour taste in the mouths of the legions of Brexit-voting pensioners – hundreds of thousands of whom have already left [17] this Earth and their mess for us to clean up.
Harsh? Perhaps, but as Ian McEwan said [17] when he seconded my own observation [18] that the Leave vote was probably literally dying:
“Truly, Brexit has stirred something not heroic or celebratory or generous in the nation, but instead has coaxed into the light from some dark, damp places the lowest human impulses, from the small-minded to the mean-spirited to the murderous.”
Yet on we dawdle, into the pointless maw.
Note: As usual I’ll be deleting anything I arbitrarily and personally happen to think is overly nasty, racist, or intolerant (on both sides) so please watch your words if you’d like to comment. And if you don’t like the sound of that, no worries, there are other places to chat on the Internet. This is a benign dictatorship, not a democracy. 🙂
From Monevator
Using the Rule of 300 to estimate your retirement pot needs – Monevator [19]
From the archive-ator: Don’t forget your financial freedom goals – Monevator [20]
News
Note: Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber.1 [21]
Non-doms pay an average £105,000 in tax; £9 billion a year in total [Search result] – FT [22]
Does a £7,600 a year service charge for a 3-bed above a shop seem fair to you? – Guardian [23]
First signs of rising rents as buy-to-let investors pass on higher tax [Dubious!] – Telegraph [24]
Gun-shy private equity firms are sitting on nearly $1 trillion in cash – Bloomberg [25]
Products and services
An Islamic bank is offering the highest return on cash, at 1.7% – Telegraph [26]
Tax rule changes and low rates prompt collapse in cash ISA totals – Guardian [27]
Pensioners hit as annuity rates drop by 10% in two years [Search result] – FT [28]
The new PPI deadline advert staring Arnie is pretty compelling – FCA via Twitter [29]
British banks had to contribute £30m towards that PPI advert – Telegraph [30]
The ‘secret trick’ that enables you to transfer part of your pension – Telegraph [31]
Why people are waiting longer to upgrade their smartphones – Guardian [32]
We don’t cover it much, but the cryptocurrency space looks bubbly – Techcrunch [33]
Creating a set of cryptocurrency benchmark indices – Bletchley Indexes [34]
Comment and opinion
The dumbest call of the era – The Reformed Broker [35]
What do the best investors do that the rest don’t? – Behavioral Investing [36]
Want a house price crash? Be careful what you wish for – Guardian [37]
Have equity income funds had their day? [Search result] – FT [38]
The worst case scenario for passive investing: Part 1 [Debate!] – Bloomberg [39]
The Analyst on Monevator’s 1-page investing philosophy – Todd Wenning via Twitter [40]
Tobacco stocks could be damaging to your wealth – The Value Perspective [41]
The market is high. Beware of portfolio drift – New York Times [42]
Decisions, decisions – A Wealth of Common Sense [43]
Time to buy gold? – The Irrelevant Investor [44]
How time perspective influences portfolio decisions – Portfolio Charts [45]
Jason Calcanis on how to invest in technology start-ups [Podcast] – Meb Faber [46]
Forecasting: How to map the future [Video] – BBC [47]
Do Spanish pensioners have it much better than Polish workers? – SexHealthMoneyDeath [48]
There is always some clown with a bigger boat – The Escape Artist [49]
Just buy the cheapest stocks [Research, wonky] – Alpha Architect [50]
Off our beat
Overcoming your demons [Recommended] – Morgan Housel [51]
Why we should stop trying to contact aliens – Big Think [52]
How to save money on gardening: An A-Z – Backyard Boss [53]
How milk became the go-to beverage of the alt-right – The Conversation [54]
What working from home does to your brain, apparently – Mel [55]
And finally…
“Try to imagine the calamity of that: Zack, age twenty-eight, with no management experience, gets training from Dave, a weekend rock guitarist, on how to apply a set of fundamentally unsound psychological principles as a way to manipulate the people who report to him.”
– Daniel Lyons, Disrupted: My Misadventure in the Start-Up Bubble [56]
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- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩ [61]]