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Weekend reading: One more rant in the aftermath of a wail of protest

Weekend reading

I’m depressed by the Brexit result and even more so by how it came about. Feel free to skip to the week’s good reads.

Some 25 years ago, I set off from the provinces for university in London.

My family waved me goodbye as the train began its journey through beautiful countryside that turned flatter, plainer, and more urban as I approached the South East.

Within hours I was in London – that vast city so near yet so faraway, which I had only visited two or three times in my lifetime and only then for a few brief hours.

I spent the first night walking around West London, astonished that seemingly every other person spoke a different language. Saw buildings from history books. Was amazed to find fabulously expensive cars that I’d only seen in TV adverts just parked out on the streets. Was bamboozled by one-bedroom flats in the estate agents’ windows at prices that now seem a bargain but back then – as I not-so-tactfully I informed my parents from a phone box a few days later – could have bought their semi ten-times over.

Give or take, I never left.

When Monday rolled around, it was time to become the first person in my family to go to university.

I learned two important things on that first day.

One was that they didn’t take a register of attendance, which I knew meant I would only be showing up when I felt like it.

The other I realized when I went to my first big lecture, alongside 150 or so other freshers on my course.

I entered the lecture hall and walked up the stairs towards the back, instinctively finding my level.

I kept going.

I sat down in the back row.

For the product of a 2,000-strong comprehensive school, the message of this seemingly trivial detail was clear.

I was the “hard kids” now. Nobody here was going to beat me up. Never again would I be fearful about the cast of violent, ill-tempered and stupid bullies that made each day at school a lottery as to whether you’d get a punch on the arm or worse – that forced anyone with a brain into unspoken alliances with robust friends, that made you laugh at the jokes of borderline psychopaths or accept the logic of a moron just because they were bigger than you.

I was free. Screw them all, I thought, as I remembered the yobs I’d left behind.

A design for life

Friday’s vote to leave the EU – and the sorts of places where most of those votes came from – was a punch in the guts that reminded me that you’re never really safe from the mob.

Of course, over the years my views towards the worst of my schoolmates softened.

As I began the typical thoughtful student’s grasping towards a political consciousness, I came to understand that to some extent it wasn’t their fault.

Most of even the dumb ones weren’t bad people. There were only a few monsters in each year group. They had almost certainly had terrible upbringings that I’d been lucky enough to avoid, and even if they hadn’t then perhaps they drew bad genes.

I also learned more about how economic changes had really hit hard the land where I grew up, and how even in the good times most of the profits had been siphoned off by owners who lived elsewhere.

I argued with girlfriends from the Home Counties who had no reason to know that not everyone grew up living next door to lawyers, newspaper editors, investment bankers, and directors at major pharmaceutical companies. That not every school was a safe place for learning. That not everyone was encouraged to be the best version of themselves.

Even after I cut my hair, gave up on true socialism, saw the reality of the workplace, and became the capitalist you know and tolerate today, I still tended to vote for Labour (though not exclusively).

In reality though, I’d become part of the metropolitan consensus that had everything to gain from global trade, open borders, and free markets, and saw very little to lose from the way the economy was headed.

I felt sorry for the marginalized, but I didn’t think their problems were my problems.

The second derivative

Perhaps this contrast between my past and my present was why I found a way to disagree with nearly everybody I spoke to in the run up to the Referendum – as I had for many years before that on some of the core issues that came to the fore.

Particularly on free movement.

As a Londoner who loves its polyglot diversity and all the cultural and economic benefits that accrue from it, I was all for it.

But I understand very clearly that not everybody feels the same way.

Some are flat out racists, and always will be.

But some are people who I can accept as wanting to preserve and be surrounded by a cultural identity they feel they belong to – John Major’s rosy vision of pasty-hued men playing cricket on the village green while their wives discuss kitchen extensions in the pavilion.

As I tried to explain to one of my innumerable London friends who cannot understand why not everyone wants to live surrounded by change and difference and colour, some people just find a universally frightening life more comfortable when they live near a pub where everyone they knew grew up with Fawlty Towers and The Spice Girls.

Are these people racist? I don’t think that’s the right word for it.

They have a cultural preference, just like me and my friends in London. I believe most of them would be happy enough in a workplace with (a minority of) colleagues from other cultures or races, although a good chunk probably wouldn’t ideally want their daughters to marry outside their ethnic roots. But even then, I think most are good enough people who would come to appreciate their new sons or daughters-in-law, given time to get to know them.

Rate of change is everything, always. Increase the UK population by three million in a decade and you’re going to have problems. I argued this again and again and we’ve just seen the results.

The same increase over 20 years? Not so much.

Then there are the security concerns. It is a tragedy – if not a coincidence, given that similar ideologues are involved in the backstory – that the refugee crisis on Europe’s borders has coincided with an existential battle against a new terrorist threat.

I don’t pretend to know exactly how Europe should have responded to the prospect of many millions of refugees arriving at the very same time when a large chunk of the population has rarely been so fearful of difference, but it’s abundantly clear – if only from all the subsequent backtracking, even by the Germans – that their first response was wrong.

Sometimes the perfect is the enemy of the good.

They’re not like us

UK politicians, European Union architects, and all the chattering classes should have been more pragmatic about the free movement of people long ago.

Clearly it’s core to the long-term project, but if there had been an honest appraisal of the fears it would provoke, then it might have been structured more sensitively.

Perhaps there should have been greater restrictions on the poorer Eastern European countries that joined the EU, or longer-lasting restrictions. Maybe there should have been a transitional process for new entrants that lasted 20 years or more, during which time Europe intervened to bring them up to speed. Clearly what curbs there were have not been enough to dampen the rate of change here.

I don’t know the solution, obviously. I don’t think anyone has good answers yet. But pretending it wasn’t a problem was never a solution.

Please understand that – as I’m forced to explain to friends who I have spent a decade warning about this bubbling resentment that was there to see for anyone who looked at it plainly – I myself am happy with the free movement rules of EU citizens as things stand, and even the consequent escalation of the UK population.

I can see the cultural benefits, the economic benefits, and the wider benefits for Europe of EU citizens going wherever they like.

And to return to a point raised in the previous section – I’ve fallen for women of all backgrounds over the years. (Sadly it hasn’t always been reciprocated!)

But I am not everybody. And you have to compromise.

There’s no point in me doing an amateurish rehash of all the arguments about this – you’ve heard it for weeks from better sources, and you can read more in the links below.

The bottom line is if you detoxify the perceived threat of immigration then you drain Leave of its pulling power.

Telling everybody that only racists fear migration isn’t detoxification.

The poor reason to vote Brexit

One reason it has been so hard to argue for free movement – and for the EU project in general – is because it is fundamentally a capitalist project.

Remove borders, remove tariffs, allow capital and labour and goods to move freely, and eventually most people across the Eurozone will be lifted up by the resultant greater prosperity.

You’re scoffing?

Exactly. Belief in capitalism has rarely been at a lower ebb.

You almost can’t blame the provinces for voting Leave, given that a chunk of them have seen their economic circumstances slide for generations.

And as an ardent believer in the good wrought by market systems, I’ve been warning for years that as a matter of self-preservation capitalists should be addressing income inequality as a top priority.

That really hasn’t happened, and Brexit is the first sign that there will be consequences for all of us, rich and poor.

I also blame my often lamented (if much-loved) left-wing friends and their Facebook posturing.

For years they’ve ranted that unemployment would soar to three million (employment is now at a record high) and that the NHS had been all but privatised and ruined (it hasn’t been and won’t be).

Rarely have they let the facts get in the way of their soundbites.

Well, now we see what happens when the other side picks up that particular ball and runs with it.

To Brussels without love

So the poor provincials get some of the blame. The rich elites also for their arrogance and indifference.

And the lefties played a part too, with their years of socially mediated scaremongering, and for telling the British people the country was corrupt and ruined for long enough that much of its population eventually believed it must be true.

Who else?

Obviously the Eurocrats. Jeremy Corbyn (who deserves a massive dollup of blame on a tactical level) famously said he was 70% for Remain. The well-argued gripes about Brussels put me at a similar level of conviction.

I never said Remain was an overwhelmingly slam dunk decision. Just that it was the right one.

To be sure, lots of the complaints about Eurozone bureaucracy are ridiculous. (It takes a massive organization and a big budget to administer to 340 million people in a dozen languages? Go figure.)

But the charges of aloofness and an anti-democratic impulse do ring true to me.

Again, I’m not smart enough to know how to address this, but surely we could have done more than we did.

In any event I don’t think the EU is sufficiently aloof, anti-democratic, and powerful enough to warrant pulling the pin. It has delivered economic gains for Europe as a whole, helped the rich get richer, and targeted money at the poor in places. It’s saved at least as much paperwork as it created.

And I’m happy to say it – it’s made violent conflict between or with Europe far, far less likely for decades. Not solely, but it played a role.

Seriously: How did we go from entering a partnership with the Germans just a couple of decades after they’d fought our relatives, murdered helpless millions and bombed our cities to smithereens to thinking the fact that they insisted fire alarms be fitted in all workplaces or that everyone should get a few paid days off a year1 was the source of whatever ails us?

The wartime generation really was wiser than us – once they’d lived through the evil education of the war.

Whatever the EU’s problems, it didn’t make our problems worse.

And we still had the pound, and our special opt-outs!

We had the best of both worlds and we might well have thrown it away.

Educated fools

The final group of people I blame is what I have called before the Grumpy Old Men brigade.

Well-educated, prosperous, ageing, and feeling themselves to be the owners of Pensieves recalling happier, better-educated, and even more prosperous times, I come across these people regularly in their guise as private investors.

In fact some of you fit right into this bracket.

Sure, we all have some wrong-headed views. However these guys are so pompous even as they’re so often wrong it’s not funny. Peak oil, the value of a manufacturing industry, the impact of women in the workplace, they get most things wrong and now they are on the wrong (albeit winning) side of the Referendum.

They are the supposedly financial savvy people who believe the poppycock money we pay into the European Union is an outrage, because they don’t understand it’s a force multiplier that delivers far greater economic returns.

At least the racists are right about one thing: Being in the EU surely means more foreigners in the UK.

The Grumpy Old Man brigade doesn’t even have that going for them. There is no economic argument for exiting the European Union. None.

Honestly, I almost wish London could enact the newly set-up petition to declare itself a City State just to leave these numbskulls to their dreams of returning ship-building to the Tyne and British-made bombers patrolling high above the channel.

I’d love to see how they got on without London’s smarts, its 21st Century business model, and its tax revenues.

Lies, damn lies, and the Leave campaign

Of course these grumpy men know better than the experts who have almost to a man and woman warned that Britain would be poorer in the event of a Brexit.

I certainly think we will be.

Perhaps not crippled, maybe we’ll even do quite well. But we would have been better off within – that’s been the case for the past 40 years, and it’s been abundantly so for the past 10 years. There was no reason why it wouldn’t have continued.

Britain has been, with Germany, the biggest winner in recent times from the project. London has boomed as hundreds of thousands of smart Europeans flocked to where the recovery was fastest and the prospects of getting a good job or setting up a new business was greatest.

London’s outward looking and increasingly digital economy thrived in a way that the regions should have striven to copy, not attempted to vote out of existence.

Everybody who knew anything said so – but who cares what the experts think?

This is surely the most worrying development, and many have already upgraded Donald Trump’s chances in the US on the same logic.

Politics has always been about exaggeration, and it’s true the Remain camp stretched some truths and forecasts to the limit.

But the Leave case was largely built upon fabrications and lies – not least evidenced by the fact that 24 hours after the win they’re recanting.

Boris Johnson – who was booed by the betrayed Londoners who made his political fortune as he headed off to deliver his victory speech on Friday – has already delivered a bewildering maiden speech, in which he explained immigration is a boon and that it will be business as usual under Brexit.

Let’s hope so, but that’s not what Leave said, nor what many of those who voted for Leave thought, Johnson.

Market madness

H.L. Mencken famously quipped, “No one ever went broke underestimating the intelligence of the American public.”

But many smart investors just lost a fortune by over-estimating the British people.

As skilled political animals, the likes of Johnson and Michael Gove have adroitly channeled the self-destructive mood of a huge swathe of the population to propel themselves within sight of the leadership role of a now-divided nation.

But for their part, global markets couldn’t believe we Brits would so dumbly vote against our own self-interest.

The resultant dislocations in the market on Friday morning were truly breathtaking.

Long-term readers will be aware of my active trading style that sits completely at odds with what this site in general and my co-blogger in particular strongly suggests you do. (In short, you should probably be a passive investor in index funds).

And the Referendum has been the most confounding event I’ve faced as an active investor.

I felt confident enough through the various Greek issues, the US fiscal cliff, the tumult earlier this year. Even the financial crisis felt logical, if sometimes terrifying.

But trying to figure out the best collection of assets to own in advance of and through the referendum was a mind-bender, and I changed my exposure many times.

While I tried to stay fairly balanced throughout, for weeks I was tilted more towards a Brexit. I sold out of much of my UK exposure, and at one point I had a pretty large wodge of gold.

A savvy friend in the finance industry didn’t see the need for this caution – like most in the City he thought the chances of Brexit were very low. Perhaps 8-10%, he estimated.

I was nothing like so confident, as I emailed back: “The danger is this is the mother of all protest votes.”

But with the horrible and pointless murder of MP Jo Cox, you could feel the market turn. (My first thought before I saw the news but felt the impact in prices was that Johnson had resigned from Leave, perhaps in disgust at Farage’s misleading migrant poster.)

As this shift continued, my current style meant I sought to reflect it in my positioning, and I sold the gold and upped exposure to some small cap UK cyclicals.

However I just couldn’t bring myself to the same sanguine position that everyone else evidently felt. And so my portfolio shed value daily as the anti-Brexit positions I held (mainly US stocks) wilted in sterling terms and the pound climbed.

All that changed on Friday night, as reality homed in. Before the markets opened, my portfolio notionally soared as the pound tanked. Stocks hadn’t yet had the chance to respond.

They got their chance at 8am.

My plan was basically to dump the less obvious positions I owned in UK exposed companies inside tax-sheltered ISAs and SIPPs, hopefully while the major funds and algorithms were concentrating on offloading the big blatant stuff like UK banks and major housebuilders.

I’d then reverse direction, buying certain blue chips they were throwing overboard in the panic, and hopefully the net result would be I’d get through the day fairly unscathed.

(Again, don’t try this at home!)

It half worked. I was able to get rid of a few UK positions, some in decent size, but for many I couldn’t get any sort of live quote.

I wasn’t prepared to buy “At Best” in a market in freefall, so my attempt to raise liquidity before the price rout took its full toll was only part-completed.

More surprising though was that I couldn’t even get a firm quote for the big companies I wanted to buy.

I was looking at huge banks down more than 30% and certain construction firms down over 75% in the early minutes of trade, and I just couldn’t buy them, at least not with any firm price guide.

The brokers at least stayed up-and-running – in the financial crisis you couldn’t log in at the worst times.

But they blundered, too, for example routing one of my orders into purgatory where it was neither executed nor could it be cancelled. (My fellow blogger Ermine saw his portfolio disappear for a while!)

By the time the US market opened, sanity had returned to UK trading – and then we were off on another rollercoaster.

At the end of the day, I’d achieved my aim; I’d lost less than 1% on what had become an all-equity portfolio.2

Sure, as Lars Kroijer noted to me later, it would have been far easier to hold a few index funds for a similar result, since most of the returns were down to currency swings. Home currencies often tank at the same time as home markets, he reminded me, which means overseas holdings in a diversified portfolio will see coincident gains. Another notch for his belief you should just own a global tracker.

From my point of view though, Friday was about survival in the chaos. I’ve done better by stock picking and trading over the long-term, and I hope to do so in the future.

I didn’t see the Brexit as a profit opportunity, but rather I had to negotiate a chasm of potential downside.

Young, less free, and singularly shafted

You’ll see more in the articles below about how the prospect of Brexit caused chaos in the global markets.

Glib comments to the effect that you shouldn’t care because your US shares went up 10% may well prove to be wide of the mark.

Uncertainty has massively increased, and Europe faces an existential threat.

Global growth will be without doubt slower than it might have been – simply because there is no mechanism by which this vote and this shock can increase it, though we can argue about the scale of the decline.

Yes, life will go on. The UK pound might even eventually rise as a haven, if the Euro goes to hell in a basket and even a stodgy, self-strangling UK economy looks like a better bet in comparison.

I have no doubt though that Britain is going to be poorer as a result of this vote. The extent to which whoever gains power in the aftermath implements the professed wishes of Leavers will determine exactly how much poorer.

It’s easy enough to paint apocalyptic scenarios – a run on the pound, soaring interest rates as we lose our triple-A status and foreigners refuse to finance our deficit. Maybe some localized violence.

However the truth will likely be more mundane, economically-speaking.

London will come off the boil, much global capital will head elsewhere. A few Northern exporters irrelevant in the grand scheme of things will sell a few more widgets to China and India. If immigration is massively curbed, then there’ll be fewer jobs but hourly wages for the crappest jobs might rise by a few pennies. But most things will be more expensive because labour costs will increase and for as long as the pound is weak we’ll import inflation. The poorer regions who voted for Brexit will see less money as tax revenues dwindle and growth slows.

Something like that.

But while I feel somewhat sorry for these poor and marginalized communities – and as I say I was concerned about them long before this vote – I save my greatest sympathy for the urban young.

The aging provincials voted in their imminent decline. The clever young overwhelmingly voted the other way.

As an FT comment that went viral on Twitter pointed out on Friday, young Britons may be about to lose their generation’s single biggest advantage.

They can’t see how they will ever afford a home of their own, job security and pensions are long gone, and they are crippled by student debts.

But free movement in Europe gave them the incredible opportunity to live elsewhere and to enjoy an entirely different life if they chose to.

That freedom, that potential – and all the living that would have gone with it – may just have been voted into oblivion, by old people.

In the worst versions of what happens next, the drawbridge goes up, those freedoms are lost entirely, and they’ll be stuck in the UK even as their bright young European peers drift home and their foolish parents who voted for Brexit wonder why it takes so long now to be served a coffee in Costa.

At its pre-Brexit best, Britain was a large cap version of thriving Estonia.

At worst, it’s now on the path to becoming a less socially ordered version of Japan.

Some Brexiteers are all for this, incidentally. On Friday I re-tweeted a comment by The Reformed Broker that sardonically congratulated the Brexiteers – they’d still have the immigrants, but now they’d have a whole lot less money, too.

One reply: “Good. To kill a tape worm you starve it out.”

Get poor and the immigrants go home. Genius.

Down with the revolution

I feel I haven’t said half of what I was going to say, but I doubt many people even read this far and I don’t blame you.

I avoided Brexit articles in the run-up to the vote, which I now slightly regret. It seemed a kindness to readers, but perhaps it might have swayed a few Leavers not to be so silly.

I know plenty of Monevator readers will agree with my sentiments – because about a quarter of this site’s readership hails from London.

We know London has its problems. Some persevere with it just for the salary. But others of us love the place as much as it has confounded and frustrated us, and know that this vote against the EU is as much a vote against our home.

They – and certainly many other Remainers around the country – will agree with a friend of mine on Facebook who wrote this morning:

Nigel Farage described the result of the referendum as a “victory for ordinary people, a victory for decent people”.

So I am now proud to be extraordinary and indecent.

Anyone with a passing knowledge of history should shiver when politicians with ugly views start championing the cause of the common man. True lasting progress nearly always happens slowly – populism virtually always end badly.

From the demise of the Roman republic to the rise of communism in Russia, even when (as so often) the populace had every right to be angry, they typically cut their nose off to spite their faces and uprisings made things worse.

Some of you disagree. Some of you – mainly grumpy, mainly old – voted for Brexit.

That was your right, just as it’s your right to be angry (and wrong) about what I’ve written today.

I hope soon enough we can talk about expense ratios and using your new ISA allowance. I don’t think you’re bad people.

But don’t look forward to a vibrant debate about the pros and cons of the Referendum to follow this article.

And I wouldn’t bother explaining your vote to Leave.

I am likely to delete all but the very most thoughtful pro-Brexit contributions. My site will not be another platform for the wail of stupidity that has led to this result.

I doubt any of my old school bullies or their like read this website. But do I know some Blimpish investors do.

Well, Monevator is not a democracy.

You had your vote. You can take your views elsewhere.

Brexit articles: Quarantine box

  • England just screwed us all – Felix Salmon
  • After the vote, chaos – The Economist
  • Brexit will reconfigure the UK economy [Search result]FT
  • Boris Johnson’s Pyrrhic victory – Guardian
  • Evan Davis loses it with one Brexit liar – Huffington Post
  • Petitions: For London to declare independence; for a 2nd referendum
  • The sky has not fallen, but we face years of hard labour – Telegraph
  • Owen Jones: The escalating culture wars have to stop – Guardian
  • Brexit is a wake up call: Save Europe – Guardian
  • Britain is not a rainy, fascist island – Guardian
  • World’s richest people lose $127 billion in Brexit chaos – Bloomberg
  • The golden generation leaves a tarnished legacy [Search result]FT
  • London just threw its race with New York – Bloomberg
  • So it’s Brexit. What next for shares? – The Motley Fool
  • Bag a bargain post-Brexit investment trust – Citywire
  • Star fund managers on Brexit’s impact on shares – ThisIsMoney
  • EU exit expected to end UK house price boom [Search result]FT
  • More: What does Brexit mean for UK house prices? – Guardian
  • Why Brexit is so bad for the global economy – The Atlantic
  • Europe makes Brexit-voting UK a safe haven [Search result]FT
  • Revenge would be the wrong E.U. response to Brexit – Bloomberg
  • My secret plan for surviving after Brexit – UK Value Investor
  • Voted Brexit? How to forgive yourself – Aeon

Have a good weekend.

From the blogs

Making good use of the things that we find…

Passive investing

Active investing

Other articles

Products of the week: The Guardian rounds up a collection of financial services that come with freebies. Why not get a free iPad with your mortgage, or a free eye test with your insurance? Well, perhaps because such deals will rarely be the best all-rounders. These companies are targeting an old part of your brain – the primitive beast within you that seeks a short-term pleasure hit. Better to get back out into the field to till the earth and mull over what’s cheapest in the long-term.

Mainstream media money

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 of that site.3

Passive investing

  • Mispricing underlies profitability premium – ETF.com

Active investing

  • Do experts know anything? – Bloomberg
  • High household equity in the US is bearish for the S&P – MarketWatch

A word from a broker

Other stuff worth reading

  • Top 10 destinations for Britons looking to work abroad – ThisIsMoney
  • Interest-only mortgages are back, for some – Guardian
  • The Forrest Gump of the Internet – The Atlantic

Book of the week: Fancy some topical reading in the aftermath of the Brexit vote? Why not pick up a copy of Edward Gibbon’s The History of the Decline and Fall of the Roman Empire. O Fortuna!

Like these links? Subscribe to get them every week!

  1. Or whatever, I can’t be bothered right now to look up the “red tape” that has supposedly crippled our growing economy. []
  2. I have a massive slug of cash and cash equivalents, but they sit outside my trading accounts and tracking, as they’re earmarked for a house purchase someday. []
  3. 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”. []

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Comments on this entry are closed.

  • 1 Revanche @ A Gai Shan Life June 25, 2016, 5:10 pm

    This is the most comprehensive (yes, I read all the way to the end!) opinion / reaction / analysis of Brexit I’ve read thus far. And I see not so surprising parallels between how you’re parsing the eventual success of Brexit to our own situation here in the US and the rise of, I find myself tempted to say “You-Know-Who”, the bombastic perpetual lying machine that is the Republican nominee. I hold both sides accountable as well, and though many UK friends have pointed out that we should only expect 8 years of suffering, others of them have pointed out that people like him tend to change the laws to suit themselves and who’s to stop them? They bluster or charm or other eeled their way to power in the first place and no one stopped that.

    In any case, returning to the topic at hand, I don’t know what we can expect in the days to come after the Leave vote. Just as navigating it in your portfolio was turbulent and unpredictable, we’re facing quite a strange journey ahead, I expect. I wish you and all of the UK, particularly the poor who always get hit the hardest by such things, all the very best.

  • 2 magneto June 25, 2016, 5:13 pm

    Lovely poetic article TI !

    Am going to raise one question.

    Could circumstances conspire to halt the Brexit?
    Just a thought.

  • 3 lynnman June 25, 2016, 5:28 pm

    Thanks for these wise words; they are consoling on a miserable weekend.

  • 4 Andrew Williams June 25, 2016, 5:38 pm

    I enjoyed your article and most certainly voted Remain, even if I am a Grumpy Old Man. But London was not the only area to vote remain. I’m from Manchester, and I’m proud that we also voted in favour of the current century. I was just in shock yesterday, but today was cheered up by my colleagues at work who were trying to think up ever more preposterous ways to show that they are really, in their hearts, actually Scottish. In my case, my mother’s maiden name was “Scott”, but I fear it only means that my family (from Jamaica originally) was at one point *owned* by someone named “Scott”. Still, it might be worth a try!

  • 5 Matt June 25, 2016, 5:38 pm

    I feel I should preface this comment with a) I normally really like your blog, and b) I voted remain. But I have to say this post comes across as yet another London-centric whinge of the kind I’ve had to put up with on my Facebook feed the last 24 hours. I think we’ll be fine – but then what do I know? I’m just an irrelevant provincial manufacturing worker. 🙂

  • 6 Neverland June 25, 2016, 5:42 pm

    The most pertinent thing you wrote in the entire article was that you should have made your views on Brexit clear before the referendum

    The margin of victory was only a million votes in a country of 65 million

  • 7 Paul June 25, 2016, 5:44 pm

    Thanks for your words. It was cathartic. I am slowly recovering from what feels like a car crash. I live in Wales and I can’t believe that so many people think leaving the EU is the answer to their problems. Oh well.

  • 8 Learner June 25, 2016, 5:53 pm

    A good read, TI.

    > Belief in capitalism has rarely been at a lower ebb.

    There was a telling chart of opinions from one of the polls published recently. Capitalism was the one thing both sides agreed on, or rather were equally split on. The magnitude of feeling on some of the other issues is stark, though may just have reflect what was a very divisive campaign.


    > You almost can’t blame the provinces for voting Leave, given that a chunk of them have seen their economic circumstances slide for generations.

    Several people have said it was an anti-austerity vote, not about immigration. But the provinces who voted to leave are the same ones that returned the Conservatives to power last year with an even larger mandate. It doesn’t wash.

    Will Scotland leave? It would be interesting if they siphoned off some of the talent from London. Smaller cities in the US have benefited from knowledge workers fleeing Silicon Valley lately.

  • 9 Max Blumberg June 25, 2016, 5:56 pm

    At the outset, let me say that I voted In and that I am as gutted as the next Bremain voter.

    With that out of the way and assuming that Brexit is not somehow reversed, we are where we are. No amount of moping or anger is likely to change that.

    My thesis is that within just about every ostensibly negative situation, there also lurks an upside if you’re prepared to cast sadness and anger aside and search creatively for it. Indeed, speaking as a psychologist, the chances of creatively discovering an upside are significantly reduced if your affect (mood) and attitude are negative – because negativity shuts down creativity.

    A lot of people – including me – look to Monevator for creative solutions to our investment conundrums and you seldom let us down. Therefore, as dispassionately and as soon as possible please, try to view this as yet another investment challenge; a magnificently challenging and complex investment problem, but an investment problem nonetheless.

    I look forward to your continued positive and creative thoughts, and thanks again for your excellent writing.


  • 10 ermine June 25, 2016, 6:00 pm

    I am another grumpy old Bremainer. But I am deeply uncomfortable with classing many Brexiters as dim. Many are poor and perhaps low-skilled, they have been having a crappy time with precarious dead end jobs, and free movement of people is a hard sell to the poor of wealthy countries when there is such a disparity of living standards across the EU. There used to be some respect decades ago in being a cleaner – the pay was crap but you were on the staff. When agencies and outsourcing came along people doing that sort of job took the shaft, and zero-hours contracts were where it ended up.

    And then in the 200os we decided to give free movement of people to people poorer than our poor. With vim and enterprise they got on with the job, because poor in London was well off for them, something to do for a few years. So we threw the existing poor under the bus. You idea of a long transition period was probably the way to go, but it didn’t happen that way.

    There are two constituencies to Brexiters as I see – the ones who did it for sovereignty and high-falutin’ ideas like that. They can accept the challenges to come, and perhaps consider it a price worth paying, fair enough. I don’t agree with their reasons, but that’s democracy for you.

    But the poor who became poorer as a result of free movement of poor people in the EU weren’t unreasonable, they were desperate. Sometimes if you have nothing then perhaps you feel you have nothing to lose. The people that screwed up here IMO are the wealthy who didn’t bring in an universal income of something like that to protect the poor before they brought in free movement.

    It makes me uncomfortable when Remainers sneer at this part of the Brexiters. We have enough money, and many of us have never been that poor. I was poor as a student, enough to do without food at times and rent crappy digs, but I had hope. I don’t know what it’s like to live poor and without hope. I just don’t move is these circles. But they are human beings too, they are our fellow countrymen, and there seem to be a lot more of them than I had been aware of. The referendum was a numbers game, and I suspect a lot of the numbers were made from desperation, not principle. I agree with the general thrust of your prognosis, which is largely why I voted Leave. But it’ll be a shame if the divisions robbed us of remaining compassion.

  • 11 ermine June 25, 2016, 6:02 pm

    Damn. I meant voted Remain 😉

  • 12 The Escape Artist June 25, 2016, 6:07 pm

    Thank you, interesting piece on lots of different levels.

    Sticking to the investing aspect, your trading strategy sounds very…errrr…brave(!). For any UK investor (measuring their portfolio performance in £) with a sensible low cost and properly internationally diversified portfolio, last week should just have been another week of solid portfolio gains.

  • 13 PC June 25, 2016, 6:09 pm

    Great rant. Couldn’t agree more. I remain very angry.

  • 14 Elef June 25, 2016, 6:09 pm

    This was a poke in the eye to London and the South. What those in the rest of England do not appreciate is how utterly dependent they were on both London and the EU to pay for them. They will find out soon enough.

    Anyway, those who had a diversified global equity/bond/cash portfolio would have seen little “action” yesterday. Ignoring FX I was pleasantly surprised to find my portfolio had notched down just over 1%. So what for chaos in the markets…

  • 15 Ash June 25, 2016, 6:16 pm

    There seems to be some regret in the air, which is good, although pointless.

    I personally don’t know anyone who voted out, everyone around me voted in. It’s going to be an uncomfortable ride.

  • 16 Neverland June 25, 2016, 6:18 pm


    I would suggest respectfully provincial manufacturing workers are one of the sets of workers likely to be most effected by the UK losing privileged access to all of its largest export markets


  • 17 Matt June 25, 2016, 6:23 pm

    Depends which industry and where their markets are. Mine (aerospace) sends most of its products outside the EU – so as long as the Chinese, Arabs and Americans keep buying, we’ll be fine. Same goes for the likes of JCB, Dyson and JLR.

  • 18 The Investor June 25, 2016, 6:28 pm

    @ermine — Yes, you’re right, not all Leavers are stupid of course, and some may even be fully prepared for the likely consequences of what I see as a stupid decision.

    In particular, maximum sovereignty does come from a Brexit — provided they don’t just accept EU laws by the back door anyway as a consequence of the trade deal (how ironic).

    Some of the Tories fit into this bracket. Perhaps Rees Mogg for example.

    However I don’t for one moment think they got 52% of the vote on the sovereignty concerns of informed individuals.

    They got 52% of the vote from an unholy alliance.

  • 19 Tim June 25, 2016, 6:34 pm

    Excellent article thanks. I did wonder how people attempting to trade on the Friday fared… I’d been accumulating cash over the last few months with a vague idea of buying referendum dips… but a couple of weeks ago decided I’d be happier with it in USD than GBP and swept the lot into a US bond ETF. Didn’t have the guts to rotate any funds back into UK assets on Friday when it came to it, and it sounds like trying would have driven me bananas. I was surprised to find myself a few percent up in GBP terms when I eventually dared to check at close of play (portfolio is perhaps more “global with a tilt to UK” than “UK with global exposure”), but of course it’s an illusion when the pound itself has been mauled by more, and it’s still far too early to conclude anything, and all those other worries about China and President Trump and Greece are still out there…

  • 20 Bedazzerlin June 25, 2016, 6:41 pm

    I’ve just finished my first year of university and well…crap. I’ve no idea what my prospects are like when I graduate now.

    Michael Gove stated that we “have had enough of experts”, but since when do we substitute the knowledge of others for blind optimism? More often than I can count, when we see warnings of the impact of leaving the EU, we get dismissive replies of “they were wrong about the euro”, a fallacy that attacks the messenger rather than the process in which the message was formulated. I’d be less despondent with the result were it not for the sheer thoughtlessness in which some have arrived at the decision to exit.

    And now today, we see the defensive backtracking starting already. We have Farage denying that he said the EU contributions can now be given to the NHS. Hannan denying that the immigration argument was about minimising the numbers, just “more control”. Boris in no hurry to trigger Article 50, despite it previously being of utmost importance that we leave the EU as soon as possible. These nit-picky defences might be technically correct, but it doesn’t excuse the fact that many were misled by these claims which they were in no hurry to correct until after such an important decision was made. Such a willingness to deceive turns my despondence into anger.

    Still, whilst I agree with much of your post, I think it’s wrong to blame the old for screwing us when in reality, at least some of it is our own doing. Our generation simply doesn’t engage with decisions like this. Sky Data suggests that the turnout of 18-24 year olds was 36%. That of 25-34 year olds? 58% (for comparison, it’s estimated that 83% of eligible voters aged 65+ voted). Quite simply, whilst we can complain over how the old have voted, we failed to get our own to go out to vote and have as much to blame for allowing this to happen.

  • 21 Neverland June 25, 2016, 6:56 pm


    All of the UKs current trading treaties with the rest of the world are via passported EU agreements

    These will lapse when the UK leaves the EU and new agreements will need to negotiated

    Good luck 🙂

  • 22 Planting Acorns June 25, 2016, 6:56 pm

    To my mind, in England, there were three campaigns
    Give/ Johnson

    I voted ‘leave’ and I did so along the GoveGove/Johnson lines. I’m not averse to being part of a huge trading Union , or to the free movement of people within that Union in principal – I was opposed to the one we had.

    I don’t think immigration will necessarily fall – at least not where I live in London, and Gove has said he doesn’t expect it to… However I didn’t vote on immigration

    I think my rights are better protected by parliament here. The EU is widely regarded as being extremely positive for worker rights…but how it’s assumed it’s position in the liberal mind as a Bastian of civil rights I just don’t know. There are 11 EU member states where gays cant get married and three where they can’t join the army… I didn’t feel safe with the highest laws being made in an organisation that would allow me to the treated second class if I lived in another part of it. I feel safer now, my right to a family life protected by a democratically elected Parliament here.

    Also, it is too glib to say the bureaucracy is necessary – there is nothing capitalist about CAP spending for eg. I hope we will go on to be richer as well more Democratic and liberal.

    There were 4m Ukip votes and 17m leave votes…your characterisation of all leave voters being illeberal is incorrect

  • 23 Grand June 25, 2016, 7:04 pm

    Yesterday travelling into work.. I one thought repeat itself over and over again, i didn’t feel like being in Britain. Yesterday was a sad day, genuinely sad…. Once I arrived at work, I got the sense that everyone else felt that way……

  • 24 The Beagle June 25, 2016, 7:08 pm

    Long time lurker, first time poster. Great article, your point articulated brilliantly.

    Yesterday, I jokingly spoke to my work colleagues about how I was going through the seven stages of grief about the result.

    However, the actual reason was that I neglected to place my bet on Leave at 10/1, even though I personally voted for Remain.

    This wasn’t due to Mencken-style sentiment regarding the demos either. Pure speculation was my reason, due to uncertainty.

    And this is my point: we haven’t actually Brexited yet, much as Greece didn’t Grexit.

    Lots of people seem to be talking as if Article 50 has been invoked, but it hasn’t. Yet.

    In my opinion, the events in the markets early on Friday were down to expectations stoked by the Prime Minister’s statements from a few months ago about Brexit being enacted immediately. Once he’d given his resignation address, but pushed actual Brexit further down the line, everything bounced back.

    I’m reading Taleb’s “Antifragile” and this quote seems prescient:
    “War could cause a rise in oil prices, but not scheduled war—since prices adjust to expectations.”

    Hence, on Friday, I decided to sit tight and see what happened (mostly passive investments that nary fluctuated, a few active investments but only one that was still down by the end of trading) and not waste the fees.

    Therefore, I think Friday was a precursor, a mere blip, a tiny indicator of what could happen when Article 50 is invoked.

    I feel almost “Dr Doom”-esque typing this now!

  • 25 Faustus June 25, 2016, 7:15 pm

    Amongst the gloom it is reassuring to see so much sense spoken here. The result was a shocking act of national self-harm, chiefly by the old and the ignorant whipped up by demagogues, and the consequences will resonate for decades. Particularly upsetting that younger people and children will be permanently impoverished and lose the same rights to work, study and travel across a continent that we enjoyed. But we are reaping the results not just of 4 months of a brutally mendacious campaign, but also decades of lies, bigotry and misinformation peddled by the tabloid media (especially Daily Mail, Express, Sun etc) and which politicians of all stripes failed to challenge sufficiently.

    Like Tim I moved heavily into USD denominated bonds a couple of weeks ago when things were beginning to look very unpredictable – and was not wholly convinced by the complacency of the markets this past week. I suspect the uncertainty will persist for some time, which favours risk-off assets, so in no hurry just yet to rotate back into the market.

  • 26 Millennial June 25, 2016, 7:18 pm

    17 million people cannot be written off as being uneducated, economically clueless or racist. This is just the road to bad faith. People will do it anyway for the political capital. Which is a shame because it epitomizes the idea there are no bad tactics, only bad targets…

    Like those who voted the Conservatives in, many people are now afraid of talking because of the abuse they get.

    It is okay to feel right but always leave room for being wrong and the world for not living to your expectation, such as this result for example.

  • 27 The Rhino June 25, 2016, 7:35 pm

    I agree with ermine. Free movement of labour at the lower end of the market must be a very brutal place. I am very grateful I don’t reside there. It’s a very unpragmatic EU ideal.

    One possible course of events could be contagion exits. Possibly the only way we come out of this looking smart with the benefit of hindsight, ie we were the 1st to jump ship.

    I would have loved to hear more about the systemic problems in the EU in the lead up debate but heard nothing. It may be the case it’s doomed anyway and will disintegrate in due course.

    I don’t buy the lack of opportunity for the kids angle. The sort of UK kids who get cool jobs overseas will undoubtedly still get cool jobs overseas. It’s the opposite end of the labour market

  • 28 The Investor June 25, 2016, 7:43 pm

    @rhino @ermine — Except that didn’t happen. Report after report showed no impact on lower paid jobs or pay, not least because immigration boosts demand and GDP and increases the need for work and workers.

    From memory one study, I think by the BOE, showed a tiny blip down in pay from free movement. That’s it.

    Some might say it’s a price worth paying for higher economic growth and lower prices for all (not least for the higher tax revenues). I’d also suggest if the Brexit camp was really so motivated to improve the lot of the poor worker from this probably non existent threat (according to, you know, experts) then there were more targeted ways to do it than the ruinous upheaval of Brexit.

    I’m the last to deny its tough at that end of the workforce. That wasn’t the vote.

    Basically IMHO it’s another of the many Brexiteer myths that appeal because they sound right.

  • 29 Grand June 25, 2016, 7:47 pm

    If you did vote remain, please ensure you sign the petition for a 2nd vote and encourage others to do the same,.


  • 30 The Rhino June 25, 2016, 8:05 pm

    Yes I m only arm chair analysing here. I ve put no effort in. Maybe it’s 8 years of austerity then. Either way. Giving a vote on an issue that you could argue is too complex for anyone to understand to a load of people who are monumentally pissed off is a disaster

  • 31 Mark June 25, 2016, 8:30 pm

    Like most people here, I voted Remain. Like The Investor I’m the spawn of proletarian stock, albeit born in an outer London suburb widely stereotyped as as chavland, rather than some post-industrial Northern town. But like him, I’m devastated by the result.

    Where we differ, perhaps because I don’t live in London but still reside within 20 miles of where I grew up – albeit now in a leafy, Conservative-voting enclave a little further out – is that I’m with Ermine in not blaming the working class, or even the golf-playing Shire-dwelling Tories, for yesterday’s result.

    Whatever the aggregated data may indicate, I believe that large-scale immigration has had a significant negative effect on employment levels, pay rates, working conditions and job security for the British working class. I fully understand why people like my sister and her partner, who would be classed as long-term benefit dependants, voted Brexit. I don’t believe they’re racist, any more than I’d label those who seek to apply that label snobs. The problem is about misunderstanding, born of the geographical and social segregation that has characterised the UK in recent years.

    In central London, there is sufficient demand for labour, and a lack of housing offers adequate constraint on supply, to ensure that immigration has not materially worsened the lot of the settled working class. Not that many remain, since most have moved out to the ‘burbs, if not further. Same goes for the smart university cities that also voted Remain.

    In the depressing, low-income city peripheries, the market towns and the post-industrial cities, supply of migrants exceeds demand for labour.

    As investors, we all understand statistical concepts such as a normal distribution, colloquially known as a bell curve. I believe it’s uncontroversial to suggest that it applies to the availability of talent in the labour force.

    Put bluntly, most of the East Europeans that have come to the UK, and many from elsewhere who’ve arrived as asylum seekers, students or ‘entrepreneurs’ (a popular wheeze in the Blair era) are from the middle of the distribution and above. Meanwhile – and I say this as someone born into the demographic in question, but who had a couple of lucky breaks – I’d submit that many of those on long-term benefits in the UK are from the lower end of that range.

    Put bluntly, employers would rather hire a smart, motivated, probably university-educated, likely young Pole than a morbidly obese, poorly educated, long-term unemployed possibly weed-demotivated, tattooed, British chav. Which explains why most of the new jobs created in the UK in recent years have gone to immigrants.

    Turn off the EU supply and employers have to hire the settled population, even if that forces them to provide training and supervision and accept lower performance than Piotr or Agnieszka might have needed.

    More, too, would be asked of the British proletariat in this scenario. Back in the 1980s, builders and others from the North were bussed down to London and the South East on Sunday nights to service the property boom; they stayed in dire B&Bs and returned on Friday nights. Look at the warehouse conversions and new builds that flourished in Docklands in the 1980s; you’re admiring the work of Scousers and Geordies, far from home. Today, Poles, Lithuanians and Romanians are the muscle behind London’s construction boom.

    It has been pointed out that the areas that voted for Brexit are those that receive the most financial support from the EU [probably also from the UK taxpayer]. Some commentators have hinted sniffily that this is to be expected; after all, they’re thick, aren’t they, is the unspoken implication.

    An alternative, more respectful hypothesis might be that they resent having to live on hand-outs, and believe that exiting the EU – even if, or perhaps because, it could weaken the City and the job opportunities of the affluent – might give them a fighting chance of standing on their own two feet.

    And what of the blazer-wearing, golf-playing provincial Tories? Racists who hanker after a return to the 1950s? Perhaps. But remember they hail from an era when very few people, mostly those born into privilege, went to university, and when social mobility was far more widespread, largely due to an unprecedented post-War expansion of the middle class, but also to some extent thanks to the grammar schools, which provided a ladder for a lucky few sons and daughters of toil to climb. They may have greater understanding of and empathy toward the settled working class than many younger people of equivalent affluence, most of them the result of assortative mating and hence less likely to understand the precariat than their grandparents.

    While I remain of the view that remaining in the EU, perhaps with more assertive renegotiation of membership terms, would have been the better outcome for most Britons, I think it’s important to respect and try to understand the reasons why those who voted leave did so. While a few pointy-heads were driven by sovereignty concerns, I think the large turn-out by the white working class is a signal not of racism or stupidity but of wholly legitimate economic concerns that politicians would do well to understand and act upon.

  • 32 The Rhino June 25, 2016, 8:56 pm

    @mark good comment, food for thought in there. I too feel like I d like to resist the ‘they re all just stupid line’. It’s got to be more interesting than that.

  • 33 Planting Acorns June 25, 2016, 9:02 pm

    @Mark – I agree. However I don’t subscribe to the theory that you have to look for work in the area you grew up and that’s where I agree with TI that immigration is good for jobs (not wages) at all parts of the spectrum. The woman who is paid next to nothing for ironing my shirts presumably spends the money on shopping / getting her hair cut etc… If she hadn’t come over and the price went up I’d iron them myself and her hairdresser would miss out…and etc…

  • 34 Richard June 25, 2016, 9:09 pm

    Fully agree, the stupid racist name calling is not helpful. These people have a point of view. It may differ to others, but it doesn’t make it less valid. The issue for me here is the re-negotiations with the EU didn’t address these concerns properly. A decent deal with the EU and I think the vote would have been very different. I blame the government and the EU for not listening and acting and reaching the right deal, not the people who voted leave!

    Will it be a disaster? Who knows. I think the Germans are already wising up to the impact it will have on their own economy. This could set Europe crashing down. So I think in the end they will negotiate reasonably. But who knows.

  • 35 Richard June 25, 2016, 9:39 pm

    @PA ah, but does it remove jobs from ‘local people’ because their cost of living expectations are higher than your cleaning lady? She will probably share a bed sit, send the money home and eventually leave to her much cheaper homeland. The local lady expects to buy a UK house and live a decent working class UK lifestyle. So less immigration means fewer jobs as only more wealthy people will take up the local cleaning lady, but in your case there is in effect no jobs for local cleaning ladies as they can’t afford to live off it in UK…..

  • 36 old_eyes June 25, 2016, 10:06 pm

    I am also grieving for our withdrawal from a project that, no matter how flawed or tortuous, was a great force for good in the world.

    Also of working class stock (London originally and now living in Wales), I do understand the anger and fear of many people either in or close to the ‘precariat’. However, most of what I heard them complaining about in the endless vox pops over recent weeks had naff all to do with the EU, but were directly the result of Government policy. A Government that takes the view that being poor or unsuccessful is a moral failing (trust me I have met a number of our current ministers).

    What is particularly enraging is that a few rich white males have persuaded the people they have thoroughly screwed over since 2010 to vote for policies that will mean they are most likely to be screwed over again. Leave has promised action that they are unlikely to take and almost certainly lack the capacity to deliver. They are already pulling back on those firm promises.

    Like others I have signed the petition for a second referencdum (over 2.4m now), and am imploring my MP to make sure that Parliament and not the leaders of the leave campaign are in charge of negotiations.

    Very sad and very angry


  • 37 Nicolas June 25, 2016, 10:51 pm

    That was beautiful, and covered a lot of ground. Thank you very much for writing it.

  • 38 Pharma_Guy June 25, 2016, 10:55 pm

    Awesome post. You have articulated a lot of what I have been feeling in the past 48 hours. I am still not ready to engage or even speak to some of my extended family that voted for ‘Leave’.

    The ‘Leave’ camp through their lies and demagoguery have whipped up fear of immigrants and ‘foreigners’ and have consigned us to years of lost opportunities (aided by an insipid Labour leadership).

    As a long-term worker in the pharmaceutical industry I fear the immediate consequences for one of our leading ‘hi-tech’ industries and source of several highly rewarding stocks:

    1. The European Medicine Authority, which manages the smooth regulation and management of medicine across the EU will now have to leave London

    2. There will also be an EU grant shaped hole in the research budgets for many universities that provide many of the novel ideas and candidates that become world-class medicines developed by some of our FTSE100 stalwart pharma companies

    3. Do you think the next more right-wing Tory administration is going to back fill the gaping hole in the UK’s pharma development infrastructure? Of course not! They will pass it on as a tax break and look for entrepreneurs to sort it out.

    Because of my career and much more importantly the long-term life chances of my kids I am angling to ‘leave’ and get to Switzerland/US as soon as possible.

  • 39 Mark June 25, 2016, 11:16 pm

    To Richard’s point, I’ve noticed a wide spectrum of tones to the pronouncements emerging from the EU and the leaders of its nations since the poll result was announced. Some are playing hardball, others being conciliatory, with many nuances in between.

    The problem, I think, is that big businesses in major exporting countries, particularly Germany, want us in the single market and are happy to make concessions on freedom of movement of labour and on sovereignty to achieve it, while politicians – especially those closely involved in the EU – fear that such a deal (which would be unique) might set a precedent that could encourage others to vote to leave and seek the same terms.

    Business versus politics: time will tell which triumphs!

  • 40 K. June 25, 2016, 11:18 pm

    Immigration was not the primary reason to vote.

    The key was sovereignty of the UK from Brussels.

    I think UK should start building EU replacement with some key countries.

  • 41 Duncurin June 25, 2016, 11:23 pm

    I don’t say that Leave voters are stupid, but I have seen a number of television interviews with young men living in deprived areas whose reason for voting Leave was that they wanted “change, because things can’t get any worse”. This does suggest that they hadn’t carried out a sophisticated analysis of the situation. Early in my career I was told that there is no situation so desperate as to be incapable of further deterioration, and in general I found this to be true.

    I can understand people in Boston voting Leave because they are uncomfortable with the large number of European migrants in the town. It is less easy to understand people in Cornwall voting Leave when they receive so much EU investment. Moving control of that investment from the EU which definitely provides it to a right-wing Government which might not strikes me as being a bit risky.

    If by October BoJo is PM and there is a serious prospect of a second Scottish independence referendum (HM won’t be happy) and disquiet in the country about rising prices and job losses and cuts in services, I wouldn’t put it past him to shrug his shoulders and say “look, the whole thing was clearly a big mistake, let’s just leave things as they are”. He might even get away with it.

  • 42 SB June 25, 2016, 11:29 pm

    Good article.
    My take on the referendum result is that there’s been a change of management at the asylum. I do fear this might delay my early retirement by a few years.

  • 43 Martyn June 25, 2016, 11:52 pm

    A very long and for the most part self centred rant.

    The first thing we need explode is before Brexit Europe had no intention of changing. Will it now? Maybe. Tony Benn explained it best. In the UK you have a government it listens to you and if it screws up it gets booted out. He became anti EU as he gradually realised that the intention was to create an edifice that would not be bothered by such a tiresome construct.

    I also could go on (and on). But for a moment look at this objectively the EU did not give David Cameron a deal he could sell and that was deliberate given the consequences I’d say heads should roll. In the UK the prime minister himself resigned.

    The 5 presidents of the EU upon whose watch this occurred however are still in place and show no signs of accepting any culpability and there is no way to make them.

    To be fair they have a lot of other cockups they’d made a porridge of dealing with prior to miscalculating on Britain. The simple and unarguable point is they screw up and we can’t get shot and replace with someone more competent.

    If you are worried about blood on the European mainland, how likely is is that an EU in it’s final state, ie an undemocratic empire could not trigger this? History in Europe tells us, I would suggest that such an enity inevitably ends in war (and it does want it’s own army).

  • 44 Martyn June 26, 2016, 12:28 am

    If you are interested in how Juncter got appointed read this. I hold him in about the same reguard I hold Machiavelli. He probably cost the EU the UK but he is untouchable, is that healthy?


    It the EU as dangerous as a 1933 Germany? Who knows? I hope not. What we do know is if Britain has been brave in 1938 there would not have been a second world war. We WERE brave on June the 23rd, well at least some of us anyway.

  • 45 Jim June 26, 2016, 1:18 am

    One of the most sensible things I’ve ever read (and not just on Brexit).

    Thank you, that’s a keeper.

  • 46 Financial Samurai June 26, 2016, 3:47 am

    Thanks for sharing your thoughts. As an American investor, I truly am IMPRESSED by your people’s willingness to take the short term pain for hopefully long term gain.

    I’m not sure many people would be willing to lose 10-50% of their investment values, housing values, job market, etc for the right to be more free from EU rule. So for this, I admire you guys.

    May I ask you or any British folks some questions for a follow up article I’m doing? My first Brexit article has a a lot of good commentary so far, with 55% of the 640+ votes saying it was right for you guys to leave.

    * Would you agree that freedom to choose your own mistakes is all anybody ever wants, even with financial consequences so dire?

    * Do you think one of the reasons why you guys voted out was because you are already very wealthy, that such short term financial consequences don’t mean much? I wonder this particularly for the older generation since they seem like the ones who were more aggressive in voting out versus the younger generations.

    * The older generation voting out runs CONTRARY to the “skin in the game argument” e.g. they have more to lose and should have voted more to remain. Why do you think this is?

    * What percentage chance there’s ANOTHER referendum w/in 2 years to vote to STAY if things get really bad? It seems like a recession is an inevitability right now.

    * How do the British view the US Presidential race? Are they more for Trump (Brexit) or more for the establishment/dynasty (Clinton’s 3rd term)?

    Thanks guys!



  • 47 Travel Jem June 26, 2016, 5:32 am

    I’m sorry to feel that I yet have to read or hear anyone who voted leave that sounds liberal. It is true that there are countries in the EU that really need to sort out their human rights legislation and probably they should’ve been accepted into the EU after they did so. However it is also true that reform especially in human rights happens quicker when a country is under the influence of the EU. Countries, communities hold on to their old fashioned beliefs/ on what they’re used to/ on what they feel comfortable with, for as long as possible, that is human nature. They might take a long time to get accustomed and understand certain human rights, but it would take a much longer time to do this outside of the EU or if they didn’t have the wish to get in. The UK has its own problems with this, for example the constant battle on abortion in Northern Ireland. At least by being part of the EU these countries show to be an ally in the grand scheme of things and accept that they need reform, instead of standing on the other side and blaming the ‘western world’ for imposing their beliefs on them. In stead of staying in and being part of something that encourages reform on human rights, helps these countries on their way there, you decide to leave it. Yes there is a truth in everything and you could unpick all the faults that there lies within the EU. I’m afraid that if you really start unpicking both sides there’d be enough mess to hate everything that surrounds you and start looking for something completely different, which in the end would also end up being something vastly imperfect simply because you can’t make a perfect thing if it has to involve more people than just you. I also think that there is a positive in everything and there surely are in exiting the EU, but I’m afraid they don’t outweigh the negatives. I think the EU is a unity that has done good largely more than bad. As everything else in life it’s something that needs constant change and improvement.

  • 48 Planting Acorns June 26, 2016, 6:52 am

    Can I “hijack” this just briefly…I don’t check my funds very often but they are more or less in the £150 range they usually are…

    …should I continue with my strategy of only buying 1/6 of my funds in the UK… I can’t help but feel I’m spending a lot of pounds to get not many dollars/ euros/ yen etc to buy shares with and will get ‘hurt’ when the pound strengthens…

  • 49 Richard June 26, 2016, 7:27 am

    @FS My view is the remain campaign pushed the financial Armageddon argument to far and people started to ignore or even laugh at it. I just shrugged when Osborne made his ‘crisis’ budget statement and I pretty much ignored things like the FTSE chiefs singing the letter just before. And I am someone who is worried about the impact of this on the economy. The leave guys had an advantage here – they could draw on patriotism and say ignore that, we are a great people and country, 5th largest economy, we will be stronger on our own. That has a certain appeal to it, rather than being reliant on others.

    Older people probably have less to lose than younger in this case. Many will own their home, have fixed pensions and some savings behind them. I doubt many who voted leave are massively in the stock market (perhaps just the pension managed by someone else) so may be less bothered by this. Young people will have huge morgatages (so negative equity), job issues, pension issues etc. Though interestingly those older people I know who voted leave state they did if for the future of the children….

    Are they in favour of Trump, not sure. Trump is a big character and gets lots of press coverage. If it wasn’t Hilary Clinton I wonder how many people would know the ‘establishment’ candidate over here (among your average joes).

    It does feel like the world is becoming a lot more protectionist and in my view this is the result of the 2008 financial crisis. Huge cuts, no wage growth for many, children unable to afford homes, the rich getting richer and the poor feeling left behind. Of course whether this is really different to before 2008 or if the commentary after 2008 has just made people feel like things are a lot worse I don’t know (high employment suggests the latter)

  • 50 ermine June 26, 2016, 8:32 am


    Except that didn’t happen. Report after report showed no impact on lower paid jobs or pay, not least because immigration boosts demand and GDP and increases the need for work and workers.

    I respectfully disagree, though I agree on the big picture of freedom of movement being a plus for the UK. The Labour Effects of immigration (I presume the University of Oxford is capable of intellectual and analytical balance) makes the general case that immigration is a plus for the receiving economy for all the reasons you observed and a few others, there’s little doubt the UK as a whole is richer for the A8 freedom of movement post 2004.

    The devil is in the detail

    UK research suggests that immigration has a small impact on average wages of existing workers but more significant effects along the wage distribution: low-wage workers lose while medium and high-paid workers gain.


    It is possible, for example, that immigration leads to a rise in the average wage of all workers, but to a fall in the wages of some low-paid workers. Similarly, immigration may not affect the overall employment outcomes of existing workers, but it may impact on the employment outcomes of specific educational groups.

    We heard from people on the short end of the stick on Thursday, along with others who did so for political reasons. We could have forestalled the dispossession with a universal income, on generally a less cruel benefits system that didn’t systematically mentally torture the unemployed with sanctions and pettifogging rules. It is true that London makes more and more of a contribution to the economy than it used to. And skill requirements of the economy are rising, it can makes less and less use of unskilled labour, and wants to pay the least for that. Not all of Leave was from the dispossessed, but a lot of it was, the difference in the vote was about a million, I can see that perhaps there are more than that number of dispossessed; it came as a surprise to me that there were so many. I was in an middle class bubble too, perhaps it should have been obvious – food banks, look at some Northern cities where whole streets seem to have been abandoned.

    I am not sure sneering at the smarts of this part of the Leave vote reflects well on us Remainers. As a lady who ran a Pay as You Can cafe I interviewed recently said ‘we are all human, we all eat’. The cafe used unsold waste food donated from supermarkets and local suppliers. Her customers looked like normal humans to me, and this is happening in Britain even if it is in the tails of the stats. I don’t think Leave will help them, but I can just about understand the desperation, though I believe it will get worse in the years to come.

    @Mark +1