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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.

  • 151 The Investor June 28, 2016, 6:31 am

    @FS — I can see the people we might call the “right-minded” Leavers were in a pretty difficult situation. (i.e. I am excluding for example those for whom it was a perhaps understandably motivated by from my view a very misdirected protest vote, those people who couldn’t understand what they were being asked (e.g. those we read about in the media who didn’t know they benefited from EU redistribution) and also excluding the extreme xenophobes and racists, as opposed to those who just don’t want things to change in their country/culture, or certainly not too quickly).

    If you’ve wanted a chance to get the UK out of Europe for reasons of sovereignty, or because you think another 2-3 million net arrivals over the next decade is just too much to take, or you truly believe that the EU is a misguided economic project that will end spectacularly badly (either economically or politically) then what do you do?

    Depending on your persuasion, you might not like certain outcomes or realities of having to vote Leave, but you’ve waited for decades for your chance to do so and it might not come again.

    e.g. You might have preferred a tighter Referendum question spelling out exactly what the alternative to being in the EU was (rather than just the uncertainty in the aftermath that we’re seeing). I think many Leave voters clearly would have preferred not to find themselves lumped into an electorate featuring some of the worst of the UK political spectrum (i.e. You want full legislative power for every law to reside in the UK parliament for whatever reason, but you dislike racists as much as any Remain voter).

    Do you vote Leave or not to Leave, then?

    In some ways the economic hit is the least of it — particularly if it’s just a short-term hit. If I really believed in the sovereignty concerns, I suppose I would take a recession for them.

    When I think about this sorry Referendum and the reasons I am angry about it, this does all factor into the picture, too.

    I am saddened that we’ve reached a point, for whatever reason, where a good chunk of the electorate reached a point where they might have felt damned if they did and damned if they didn’t. And that they had to take part in a Referendum where there was no clear definition as to what the alternative would be — perhaps because the person who called the Referendum didn’t think we’d ever vote Leave, perhaps because he thought it would help put people off voting Leave, or perhaps just because he was doing it for internal party political firefighting reasons, and didn’t care.

    Finally, I am really saddened — and angry — that the decision to have this very public plebiscite was taken *AFTER* a huge number of EU migrants had made their way here, and now feel anxious for their futures or even fearful about what the British people really think of them.

    This all adds to my feeling that it’s a farce or a tragedy, depending on your point of view.

    Honestly, the stock market falls are the least of it for me.

  • 152 Richard June 28, 2016, 7:09 am

    @TI arguably the timing of this referendum was terrible. Maybe not when DC first announced it, but in the last 6 months the markets have been on the slide and more austerity. We have also had nothing but the threat of terrorists hidden amongst ‘hordes’ of migrant/refugees (plus actual attacks). I know a few leave people who voted primarily because of this.

  • 153 John B June 28, 2016, 7:35 am

    @FS Few politicians now will say brexit won’t happen. It would cause them adverse publicity when there is no clear route to stop it. But as no-one wants to press the 50 button, as time goes on the mood may change, and the opportunity for an overturning public vote grows. Its likely to be an general election though, as that allows a spectrum of choices. It depends whether a new Tory leader can stop internal dissent, and whether they feel confident enough about Labour disarray to go for a new mandate. I think the odds of an election are good, and that could lead to a reversal. And even if not, the range of final deals we get is economically very wide, from complete shut-out to same terms, just more cash paid to get them.

    If you are out the the market for 3 years you will make 4% return on cash. If you are in you capital value could swing widely, but you’d get 10%+ in dividends.

  • 154 Max June 28, 2016, 7:41 am

    @Financial Samurai

    Why don’t you invest in offshore markets?

  • 155 John B June 28, 2016, 7:52 am

    @Max Foreign markets have similar risk and return profiles to domestic, but with added foreign exchange risk. Investing with the pound at a 31 year low, reversion to the mean suggests you will be losing out if the pound recovers. It could fall further, but the down range is likely to be smaller than the up range.

  • 156 Richard June 28, 2016, 7:59 am

    @John B I really can’t see them holding a general election. I mean who would people vote for? In theory you could see 48% vote Lib Dem (who are saying they will put us straight back into Europe) and 52% vote UKIP (though how FPTP would alter the landscape….). Of course that is unlikely (and there may be a lot of buyers remorse amongst leave) but it would result in my view in an even more fractured parlement than we have now (where most MPs are pro-EU) and no doubt some powerless coalition trying to decide what to do. At least this parlement has a clear mandate, a party with a majority and is pro-EU.

  • 157 Max June 28, 2016, 8:11 am

    @Financial Samurai

    Would this also apply if you invested in funds purchased in GBP like Fidelity World Index etc?

  • 158 John B June 28, 2016, 8:34 am

    @Richard “At least this parlement has a clear mandate, a party with a majority and is pro-EU.”

    The problem is of course, which mandate, the EU-mixed one from 2015, or the the 52:48 anti-EU now.

    If I were a Remain Tory, would I feel I had a duty to work towards a goal I don’t believe in? This is the question I asked my MP yesterday.

  • 159 Richard June 28, 2016, 8:41 am

    It is an interesting dilemma. I would say the mixed one (which even the referendum shows). Which requires us to change our relationship with Europe but trying to keep all the best elements. Not easy I agree.

    I mean they can work to find the middle ground or call a general election and risk yet more instability, hung parlement, economic turmoil and further encrouchement of right wing party’s.

  • 160 Mark June 28, 2016, 8:50 am

    @The Investor, I think your post of 6.52am this morning sums up my current thoughts and feelings better than anything else I’ve read on the topic, here or elsewhere.

    We’re all likely to pay a high price for this decision. From investors nursing falls in portfolio values and depressed returns over the medium run to the left-behinds who’ll see no reduction in immigration as we favour single market access over controls on freedom of movement, the golf club Little Englanders who’ll have to watch the UK, probably as an EAA member, following EU rules but no longer able to influence or veto them and, as you point out, Europeans who’ve made lives in the UK in good faith and now face racism and the prospect of a bleak future.

    We’ve all been sold a pup, by opportunist politicians on both sides of the debate, few of whom thought it would ever happen.

    How to row back from here? The best I can think of is a referendum to endorse whatever deal is struck. But that requires terms to be nutted out without triggering Article 50. And, so far, the EU says that won’t happen. So Europe, too, is pursuing a policy of mutually assured destruction.

    We live in dark times.

  • 161 oldie June 28, 2016, 9:18 am

    What is really good is that the government had the foresight to make preliminary arrangements and preparations for Brexit just in case (in the unlikely event) it happened.

  • 162 A Different Richard June 28, 2016, 9:48 am

    @TI – As with some others, really liked your latest – more balanced, if I may be so bold – post.

    My (not too well-balanced, UK heavy) portfolio is down <1% over the past 7 days. I'll delay my suicide for a while yet. (Did I mis-hear or did Nick Robinson really say on BBC R4's Today programme this morning that the "stock market is at levels not seen since the ERM crisis"?)

    Many leavers (me being one) would argue that there's no such thing as "EU Redistribution" in the way that most people see it. Whatever the figures (and, yes, £350m/week was naughty) the UK is a net contributor to the EU. Thus the UK can continue to fund every single "EU" project (to farmers, universities, deprived areas, etc) and still have some spare. "Taking back control" simply means that the UK govt can decide whether to continue to use that funding for the purposes that, currently, the EU thinks it should be spent on. Seems fair enough to me.

    The 52% of Leavers (as with the 48% of Remainers) are not homogeneous groupings. Given their size there's a huge broad church in there and it's good to remember that.

    However I think over the coming weeks and months we'll see a much more balanced debate over the (potential) benefits of leaving the EU and the current (and potential future) disadvantages of the EU. Far too much so far has been relentlessly negative.

  • 163 Burgmeister June 28, 2016, 10:34 am

    @ A Different Richard
    “Many leavers (me being one) would argue that there’s no such thing as “EU Redistribution” in the way that most people see it. Whatever the figures (and, yes, £350m/week was naughty) the UK is a net contributor to the EU. Thus the UK can continue to fund every single “EU” project (to farmers, universities, deprived areas, etc) and still have some spare. “Taking back control” simply means that the UK govt can decide whether to continue to use that funding for the purposes that, currently, the EU thinks it should be spent on. Seems fair enough to me.”

    That assumes that the same amount of money will be available to the chancellor as he has now. I have heard a small rumour that leaving the EU could affect UK GDP and, if that is true, then there would probably not be this 350m/week (or whatever the real figure) available.

  • 164 The Rhino June 28, 2016, 10:42 am

    @ADR – I too have noticed a bit of a disconnect between the actual numbers and the medias voice on the subject of tanking currencies and markets.

    admittedly early days but it doesn’t look too bad to me. I heard one bbc commentator saying market falls were worse than 2008. It certainly doesn’t look like that from my portfolios perspective. I’ve seen vastly bigger falls in completely nondescript random months over the past decade or so

    Pound buys more euro today is than it did for pretty much all of 2013

    I thought mervyn kings take was pretty sensible for anyone worried from the economic perspective..

  • 165 Mark June 28, 2016, 10:45 am

    @Burgmeister, I agree that ‘EU funding’ ultimately comes from the UK, since we’re net contributors to the community’s budget. However, it doesn’t follow that leaving means we can allocate all that money, and more, as we see fit.

    The error in this argument is that the Leave campaign has made it clear, since the poll, that its top priority is retaining access to the Single Market. The EU in turn has indicated that there will be a cost involved – most likely, roughly what we have been paying to be full members. That’s how it works for EAA members such as Norway, and there would be an outcry from that bloc if we got a different deal.

    What this means is that we wouldn’t have the money to spend on other stuff, and we also wouldn’t have the EU subsidies paid for university research, regional development and so much more. It’s likely we will also have to accept freedom of movement across the EU and EAA, only now with no ability to set or veto rules and no power to block new countries (Turkey, Macedonia etc) from gaining that privilege.

  • 166 Richard June 28, 2016, 10:55 am

    But can’t we have the best of both worlds? In the EAA, free movement of peoples etc and also negotiate our own deals with the rest of the world? Of course that relies on us getting better deals with the rest of the world outside of the EU. Does it matter if we can’t sit at the table when they are making their rules we potentially have to abide by to stay in the EAA? How much of our sovernty will we lose by this? These are genuine questions (trying to see potential up sides)

  • 167 A Different Richard June 28, 2016, 11:08 am

    I agree with Richard!

    I have no idea how this will pan out over the next 10 or 15 years. There are huge opportunities for the UK out/semi-detached/orbiting/in-at-weekends regarding the EU. (There are also huge opportunities to be seized by a – reformed – EU.)

    There are also huge opportunities for the UK to forge better trading terms with the rest of the world.

    But, yes, all this is unknown and some people (quite rightly) prefer a not-great present to an unknown future. (I would argue that the EU in 10 to 15 years, had we stayed in, would be just as unknown.)

    Guardian commentators are having the vapours. Telegraph business writers much more positive. Everyone has an argument and (most) can be backed up. Given that the establishment, most of the press, the EU leadership, and the bookies called the referendum (and the England Iceland game) wrong, I really take other people’s “certainties” with a pinch of salt.

    What I do believe in is that the UK will make a great go of this – the 52% and the 48% will do what an immigrant-rich (and I mean that literally and positively) and entrepreneurial country has always done. Roll up our sleeve and pull together. 100 years ago we were in the middle of a fearful slaughter. Look at the ups and downs of that last century. Today’s travails are/will be seen as nothing.

    We’re in Day 3. Ask me again at Christmas.

  • 168 The Investor June 28, 2016, 12:35 pm

    In the meantime, the negotiations begin, and prominent UK ambassador and Leave campaigner Nigel Farage begins the sensitive discussions:


  • 169 The Rhino June 28, 2016, 12:41 pm

    did juncker give a him a kiss and a cuddle before or after this rallying speech?

  • 170 Burgmeister June 28, 2016, 12:41 pm

    @Mark. It looks like you have just taken my quoting of A Different Richard as my own thoughts.

    My own thoughts were stated in the post. To reiterate, I think (If most economists are to be believed) there will be less money all around for the chancellor to spend so the formerly EU bound cash will not be able to be redistributed “as we see fit” as it won’t exist.

  • 171 Burgmeister June 28, 2016, 12:46 pm

    @Richard “But can’t we have the best of both worlds? In the EAA, free movement of peoples etc and also negotiate our own deals with the rest of the world? Of course that relies on us getting better deals with the rest of the world outside of the EU. ”

    It seems unlikely that this would be possible. If you think logically about it, the reason the EU wants a single deal is so that you can’t put things on their market that you have imported cheaper. If the EU has a trade agreemnet with, say, China that imposes 10% tariff on it and the UK goes ahead with a tariff free arrangement with China then the UK can buy stuff 10% cheaper than the EU can. If we also have a free access to the EU we can then resell this cheaper stuff to the rest of the EU at a profit. It offers, in this case, China a tariff free backdoor into the EU. I don’t think the rest of the EU would let that happen, do you?

  • 172 Mark June 28, 2016, 12:47 pm

    @Burgmeister, Apologies, yes, I got confused. We’re on the same page re there being less money to spend on all the things the EU currently supports in the UK.

  • 173 A Different Richard June 28, 2016, 12:50 pm

    @Rhino/Mark – I don’t disagree that you might be right (at least in the short-term, although your – widely shared – views might be a self-fulfilling prophesy). I disagree with your (and other commentators’) almost-certainty in stating that such a position is “correct”.

    Many economists said we should join the Euro. I think with hindsight they were wrong. But we only get to live in one future, so I cannot be sure.

  • 174 David June 28, 2016, 12:53 pm

    @ Burgmeister

    I might be wrong, but I think your example is precisely why goods are declared with country of origin rather than most recent country they passed through.

  • 175 A Different Richard June 28, 2016, 12:57 pm

    Buying goods in one market to sell in another at a profit is called trade. Personally I’m for fewer barriers rather than more, but I can see that there are vested interests (including the UK) that would like some advantageous barriers. Let the UK/EU negotiations begin…

  • 176 Mathmo June 28, 2016, 1:07 pm

    The question with many of these things is whether you’re looking for data to support your point of view or whether you are looking to discover the truth.

    Pretty sure I could go and find some idiotic Remain voters who regret their vote but no-one is sticking them on TV.

    It’s not going to be that bad, but good to work it out of your system.

  • 177 Burgmeister June 28, 2016, 1:48 pm

    @David. you may well be right but I’m not really sure how that works?

    Is Norway able to negotiate it’s own trade deals with countries outside the EU (specifically on things it has a single-market agreement on)? If Norway can do this then I’m sure it would be OK for the UK to do it. If they can’t then it would be unlikely to be acceptable for the UK.

  • 178 Burgmeister June 28, 2016, 1:52 pm

    @A Different Richard – I get your point re:trade but it becomes unacceptable to many countries if you are simply offering a way of by-passing existing trade agreements/tariffs/quotas.

  • 179 A Different Richard June 28, 2016, 2:05 pm

    @Burgmeister – My point is that the different vested interests will come together and thrash out (EU / World / Other Subset) trading arrangements, as they have always done. Just as the original 6 (I think) northern European countries did 40 years ago. I – and a lot of other Leavers, I presume – always felt that the EU should be (only) a trading bloc. Quite how we ended up with 27 (and counting) countries, with a European “parliament”, a set of supra-national courts (with jurisdiction over sovereign parliaments), and a potential EU army confuses me mightily. How did that happen?

    I see that Czechoslovakia, Austria and Poland are getting rather anti-Juncker. I think we might find that Brexit has pushed other (mainstream) EU parties (in government or not) to take a step back and ask “do we share Juncker’s vision?”. A week is a long time in politics.

    I do not share other commentators certainty over the (negative) future of the UK. The UK will make this work. The EU will make this work. Whether Juncker and his ilk will be able to stop/hinder that direction of travel is yet to be seen.

    My point – and it’s only that – is (per Yogi Berra) that “it’s very difficult to make predictions, especially about the future”. Politics is anything but a science. Economics is only slightly less so. Put the two together, throw in “the markets / moneymen”, 27 other counties (plus the world), and the somewhat unpredictable will of the people and you get anything but the certainties that some commentators (yes, Guardian, I’m looking at you) spout.

  • 180 Adam June 28, 2016, 2:33 pm

    With the push for ever closer union and the desired eventual outcome of a federalised EU superstate, there were always going to be countries that don’t want to be subsumed and would leave the EU. Better to be the country that gets out first, as it was going to happen eventually.

    All this doom and gloom is rot, it won’t be as bad as that, and it won’t be heaven on earth either. Chin up, Brits. If hundreds of other countries can manage without being tied to an economic basket case, I’m sure you lot can also!

  • 181 Fremantle June 28, 2016, 2:59 pm

    We don’t need trade agreements to trade, and neither should we bend over backwards to accommodate them. Even if other nations or trading blocs put up barriers to our trade with them, we would be better off operating with unilateral free trade.

    If the EU or any other nation wants to restrict its citizens from buying UK goods and services that we’re competitive at, then so be it. They’ll be poorer for it and UK producers will have to alter their behaviour, pursue alternative markets, allocate their capital differently. Traders have no natural right to market access.

    As long as the UK doesn’t restrict British subjects from buying foreign goods and services, we’ll become wealthier on the basis that we’ll only buy what is competitively priced. If the other nations want to subsidise their industries, that is direct transfer of wealth from them to us.

    Of course it would be best if no one wanted to put up trade barriers like tariffs and protectionist regulatory restrictions.

    The banks that have been scaremongering British voters and drawing up Brexit demobilisation plans are the same banks that came looking for handouts from taxpayers 8 years ago and there is little sign that the unholy alliance between government and the finance sector is going to end any time soon. Goldman Sachs et al are masters at pressuring Brussels on regulation that suits them as incumbents, reducing competition, and increases fees for advising governments and industry on how to implement and negotiate regulation. The banking business model is no longer about allocating capital to grease the wheels of industry, but to supply both the grease and the grit, sitting in the middle taking a cut no matter what the deal.

    London has been hosting this industry and we’ve been congratulating ourselves on how special we are. Before HSBC start moving to the Continent they might want check on France and Spain’s willingness and capability to bail them out in the event of another crisis, or find out whether their employees are going to enjoy paying European levels of taxation on their fat bonuses.

    Let them go and deregulate the UK financial markets. Enable competition for banking and financial services in the UK. Just make sure we don’t facilitate “too big to fail”.

    I’ve read a few opinions that the only winners out of Brexit will be the lawyers trying to squeeze the EU directives back into the toothpaste tube, but Remain gives a tick of approval for that other leach on industry and commerce, the modern investment banking behemoth.

  • 182 Financial Samurai June 28, 2016, 3:01 pm

    @The Investor – Good point about what if you are a recent immigrant in the UK. Might be subject to some hatred from folks who voted to leave. Damn, that’s terrible. I’m a minority in the US, but moved from the not diverse South to San Francisco, where diversity is plentiful. The day to day feeling is night and day.

    @John – Thanks for your thoughts. You are probably right about a 4% cash return in 3 years and a 10% potential equities return. I just finished writing a long post about asset allocation today to help us think through things now.

    @Max – I do have European and international equity exposure. FEZ, the EuroStoxx 50 index is sadly one of them. I bought some more, and even bought a European bank yesterday. Let’s just hope their dividends aren’t cut too badly.

  • 183 Shewi June 28, 2016, 3:26 pm

    If a / the future government successfully negotiates trade deals etc, of the nature that you guy’s are hoping for, but simultaneously and entirely separately, commenced systematically abandoning protections and regulations on amongst other things lets say, the environment, for example air pollution, how would you rate Brexit in a final analysis?
    It’s not meant as a facetious question. I appreciate that this is an investment blog first and foremost, but I’m genuinely curious, having interest in both subjects.

  • 184 William III June 28, 2016, 3:32 pm

    Well chosen to close comments on your latest post, which by the way is fantastic. Very brave to alienate Barry-the-average-Monevator-reader by using this platform to vent your dissapointment. It would be interesting to see whether there is a structural break in your readership from now on and, geographically, where the losses are suffered.

  • 185 A Different Richard June 28, 2016, 3:33 pm

    @Shewi – why should/would it?

    But to answer your hypothetical, it would be the UK parliament, voted in by the UK electorate who would decide. Lots of things I’ve liked about previous UK legislation. Lots I didn’t. But, to me, sovereignty is an issue. An important one. Not the be all and end all, though.

    I think the environmental lobby is a little too strong/influential. I’d weaken some climate change stuff. But then I’d cancel HS2 and reduce foreign “aid” and boost defence.

    But if the UK parliament thought differently, I’d go along with it (of course). Going along with the EU rules makes me less happy.

  • 186 Shewi June 28, 2016, 3:50 pm

    Agreed, a government may well not repeal such examples, it’s just that on the whole they seemed to be resistant during the original discussions and enacted them under duress.

  • 187 IanH June 28, 2016, 3:51 pm

    First off I’d say don’t beat yourself up for keeping schtumm about your views until after the event – I’d wondered if there would be a Monevator position article, but came to the view that you’d made the sensible decision that there was enough opinion flying around already and wanted to keep your blog on message, and keep everyone welcome under the one roof. So that was, I think, the right call.

    I’ve cooled off a bit since last week – mostly because I’ve been immobilised with back pain and taking Ibuprofen tablets like they are smarties since last Wednesday. This denied me the opportunity to miss even a second of the rolling news on the Brexit shambles day and night for nearly a week. Thank God, last night I finally got to sleep through again at last, a result of the torpor I fell into watching the England vs Iceland game.

    Sadly I can’t offer any fresh insight or analysis worth a fig as a result of watching non-stop media coverage of Brexit for what feels like a lifetime.

    Looking back a few things stand out though. I watched Cameron’s final speech outside No 10 live, and as he turned from the podium it seemed that had there been a waste paper bin beside it he’d have flung his speech papers into it, his shoulders slumped and I thought: My God – he thinks he’s lost the vote. Then I thought: ** me! The whole thing has just been one big gambit and it has blown up in his face. And so it turned out. Then on Friday morning he hauls up the white flag outside No 10 and requires poor old Sam Cameron to stand to attention off to one side for ten minutes, lower lip trembling, and for what purpose? To make himself look good? What a twat, I thought. Not deeply argued criticism I admit, but bear in mind I was addled with drugs and pain all this time.

    The other impression that lingers is the staggering scope of ignorance and misunderstanding all round. I tried to memorise the most extraordinarily irrational statements I heard but soon discovered I couldn’t – it seems that if there is no perceiveable sense to what someone says, recollection is nigh impossible. As a sampler, today on Radio 5 I heard a Brexit voter state one of their reasons to vote Leave was to stop the bedroom tax. Many things I’ve heard in the last week were less rational and thus easier to forget.

    Perhaps on reflection though, the referendum has done us the favour of really allowing people to disclose their true frustrations, fears and troubles, so all that now has to be discussed and confronted politically, not least immigration. Many people seem to have responded to the referendum question as if it was “Do you like politicians and foreigners; and are you happy with your life and confident about your, and your community’s, future; and are you satisfied that the government cares about you and your chances in life? ” Erm, no … on balance, seems to be the answer.

    So how to see through the gloom? Well, I’ve no clue how it will turn out – but then maybe this is the clue. This is surely one of those events, dear boys and girls, to mangle a quote. Perhaps this event should be taken on board like anything else that might rock the boat for a bit – and with calmness and deliberation, and sticking to the plan. No-one knows what will result – maybe it is a black swan or something, whatever. It turns out I can imagine all kinds of positive outcomes down the track if I eat enough Ibuprofen. For example, it might just turn out that whatever is hammered out to broker a deal between the UK and the EU may just produce a form of EU relationship that will be applicable to Turkey – access to the economic area but with restrictions on free movement kind of thing – leading to early entry of Turkey and an enhanced wider-EU zone with greater economic benefits to the UK as well as the EU generally. Maybe Brexit could provide a context for the contraction of the core EU to the original members who can move to full political union, and associated membership for satellites nations like the UK and Turkey who are too large or powerful or who otherwise self-exclude themselves from the full-caffeine EU thing. Though that does sound a bit like how the Soviet Union was organised doesn’t it?

    Anyway – time to brush away the gloom. It is going to be a nice, long summer I think. Get out and wander around those leafy suburbs or whatever floats your boat, take it easy, and don’t do anything rash. We’ll muddle through somehow, I expect.

  • 188 SB June 28, 2016, 5:24 pm

    On the bright side, at least we won’t have to endure another summer of never ending news reports on what an economic clusterfuck Greece is. That was getting tedious.

    @ IanH – “referendum has done us the favour of really allowing people to disclose their true frustrations, fears and troubles”. I hate to take issue but is this not akin to saying that someone’s murder-suicide has allowed them to exercise their aggravations?

  • 189 Richard June 28, 2016, 6:10 pm

    As I understand, Switzaland signed a free trade deal with China. Demark was close but apparently it fell through. Don’t think there were any restrictions but I am not an expert on this

  • 190 The Investor June 28, 2016, 6:49 pm

    @William III — I’ve had several people make some sort of a comment or complaint to me — most perfectly polite and reasonable — and deleted a few abusive comments that the comment filter caught and held in moderation. Surely there are many more out there unspoken.

    So be it. The site is free, as is their right to read another site more inline with their views if they prefer.

    You cannot please everyone or anything like it, unless you never say anything. They are reading a site written by real people, not numbers off a Bloomberg terminal.

    Also some people don’t seem to understand that because some significant number of a large number of voters are X — enough to make it worthy of comment — does not imply that saying so means everyone last one of them is definitely X too, when I don’t know them and haven’t met them. Utterly tedious. Set theory eludes them.

    The reason everyone is looking at, say, provincial deprived towns that seem to have voted against their interests or the Remain vote being strong in London is because such examinations and contrasts might provide insights.

    But you’d think it’s blindingly obvious that if 78% of people voted Remain in Lambeth, then 22% — many thousands — voted Leave.

    Apparently I am supposed to go door-to-door canvassing the names and specific opinions of each and every voter before daring to speak about the subject.

    Somewhat amusingly (or frighteningly) the complainers seem more annoyed to be (as they see it) conflated with less educated voters or working class Northerners than with racists.

    Not surprising, perhaps, given they’ve all seemingly been of the Colonel “Barry” Blimp type, so far.

  • 191 The Investor June 28, 2016, 6:54 pm

    p.s. And before they say anything (even though they’ve apparently stopped reading) “more annoyed” doesn’t mean you are not “also annoyed” at being conflated with some other undesirable group. I’m sure most aren’t racist. It just reflects the balance of what people seem to have raised in their complaints.

  • 192 Richard June 28, 2016, 7:20 pm

    @TI oh dear, I think locking Nigel away and losing the key for the next couple of years would be best. We need everyone to be clear headed and rational during negotiations not worked up and angry.

    I do love the look on the faces of everyone around him though…… Esp the guy behind him at the end.

  • 193 Peter June 28, 2016, 8:30 pm

    > Being part of Europe was what I voted for in 1975 and it has achieved the main objective that most of us had at that time – that of reducing the possibility of conflict in Europe. Conflict in Europe is now slightly less likely than Nicola Sturgeon declaring war on England. Job done.

    @Barry M what makes you think conflict in Europe will remain so unlikely, and the job continues to be done – in 5, 10 or 20 years time, given the rise of interest in far right parties across Europe?

  • 194 raluca June 28, 2016, 9:53 pm

    I am one of those much hated Eastern-Europeans. I’m even Romanian, so basically scum in the eyes of at least a part of the UK electorate – although I haven’t yet come over to take over your jobs and I have so far managed to fix my own teeth.

    Even so, I am sad today. I am sad because in order for EU to stay together, everything needs to go badly for Britain. We cannot aford compasion, or even fairness to the UK, because if we want the EU to stay together, the UK’s exit must be so horible in it’s consequences, that no other country could even begin to contemplate it’s own departure.

    It gives me zero joy, it doesn’t even invoke schadenfreude, just deep sadness. Sadness for all these people who will suffer as a result of a big basket of lies, put on repeat by a small man like Farage and an overgrown schoolboy like Boris Johnson.

    Those people that you talk about, the ones that voted Leave because they feel cheated, those are the people who will suffer most. It wasn’t the European Union selling out their future, it was, as always, their own greedy countrymen. Capitalism cares nothing for people. And capitalists have found that it’s cheaper to produce elsewhere.

    Globalization cannot be stopped by a referendum and there is nothing special about British salaryman that would justify them being paid 5 times as much for the same labour as somebody from China, or, indeed, Romania. There is no British exceptionalism, other countries can produce things just as well and they do it cheaper.

    While being in the EU, they had a modicum of protection from globalization, because of tarifs for countries outside of Europe and because other countries actually want to protect their workers. But now that you are out, you are at the tender mercies of your own elites and they will sell you out. After all, it’s Britain that we have to thank for offshores right? I have worked in my life with French companies, German, Dutch, Icelandic and British. I don’t presume that my limited experience is anything more than that, a limited experience, but to this day I have never seen a company so eager to shaft it’s own country employees in order to save a buck such as the British ones. It’s almost uncanny how all your elites pay lip service to queen and country, but then they come in Eastern Europe because we are cheaper and then create offshore companies in order to avoid paying the taxes that would make your country and your fellow countrymen better off.
    I’ll stop here, because there is nothing left to say. I’m sory to see you gone, I’m sory that now I mush wish the worst for you, in order for me and my familly to have a better life.

  • 195 FI Warrior June 28, 2016, 10:32 pm

    I grew up in the British colonies and sat in school next to the children of the newly independent elite. I saw them flinch as the teachers who were the remnants of the colonial administrator class patronised them without even realising how racist they were, it was so dyed-in-the-wool.

    These kids are now the leaders of their countries that make up the commonwealth, I know from not being able to forget xenophobic slights aimed at me as a child, how they will feel about their experiences.

    Those who have commented on this excellent thread in such a blase manner about how it’ll all be ‘all right on the night’ once we’re out of the EU because we’ll just resurrect the empire through trade, have so little idea how they are perceived in those countries that it’s beyond comical.

    And if they think only the whiter countries within that grouping are enough and are loyal, they may have another surprise, the likes of Oz , NZ, Canada and the US are looking out for themselves as much as the UK. Whatever else could you possible expect, who did they learn from?

    It’s incredibly easy to break something, but very few can create and where are all those neanderthals now?

  • 196 Lloyd June 28, 2016, 11:22 pm

    @TI – I have been a regular visitor to your site for about the last 18 months and I will be forever grateful for the insight it has given me into the world of passive index investing. Following your suggestions I have read up on the likes of Lars Kroijer and Tim Hale and have moved my investments into a selection of global index funds that have stood up well in the current market turmoil.

    In the last few days however you seem to have managed to undo the goodwill I had towards you. I voted Leave for what I believe to be carefully thought through reasons primarily based around democracy and self determination. I enjoy political debate but I do not understand why you would want to alienate readers of your site in the way you have.

    For what its worth I grew up in NW London (at a school that sounded similar to yours) but went north to University and settled in a northern city. I like to think of myself as a free market capitalist with a social conscience and definitely not a racist. Can I politely suggest that you return the subject matter on your site to investing before you alienate any more of your followers, but then the choice is yours since as you say “Monevator is not a democracy. You had your vote. You can take your views elsewhere.” I wait in hope for normal service to be resumed 🙂

  • 197 Fremantle June 29, 2016, 8:04 am


    I’m not sure why the EU would want to punish the UK, it is one of the biggest markets for EU goods. Harsh treatment will have little impact on the nationalist movements within the EU, for which Brexit is propaganda no matter what. Treat us badly, and the EU will be damned for its authoritarianism and anti-democratic nature. Treat us well, and that gives succour to life outside the EU. The EU’s best position on self-preservation is fundamental reform and a neutral/constructive stance with the UK.

    Reform is the only way the EU can save itself and return to its free trade roots. Pretending Brexit is an anomaly and proceeding with the great project of European integration and federalisation will only lead to further disintegration.

    If the EU does punish the UK, then we don’t have to accept any punitive trade deal, but simply buy EU goods subsidised by EU tax payers. The EU will transfer their industrial and agricultural subsidies directly to UK households in the form of cheaper goods and services. The EU will make themselves poorer by putting tariffs on imports from the UK.

    Unilateral free trade trumps protectionism with the least distortion to capital allocation and removal of moral hazard.

    Goodwill between nations, hey?

  • 198 ralu June 29, 2016, 9:01 am


    You say: “Harsh treatment will have little impact on the nationalist movements within the EU”.

    I beg to differ. Nationalist movements thrive on promising to the little people pie in the sky futures where everything is rosy if only they would get out of the yoke of the EU. This is, after all, what Farage and Boris have done. If life in the UK gets worse, then maybe less and less people will listen to LePen. Because they will look at the UK and see what those promises really are, nothing more than hot air. To sum it up, this will indeed not stop LePen from talking out of her French deriere, but it will at least give pause to most people from listening to her. UK as a cautionary tale is as good of a narative as any.

    You also say: “Treat us badly, and the EU will be damned for its authoritarianism and anti-democratic nature.”
    There is nothing anti-democratic in allowing a member of a group to leave that group and then not offering them the benefits that they had when they were in that group. It would be mad to do anything else.

    “If the EU does punish the UK, then we don’t have to accept any punitive trade deal, but simply buy EU goods subsidised by EU tax payers.” – of course you can and you will do that. But you will destroy your own industry/agriculture in the process.

    The EU subsidises agriculture for one simple reason – without subsidies little to no food would be produced here. When Turkish tomatoes cost half as those grown in Spain, because people in Turkey make a lot less money and they have less rights and a lower standard of living than those in the UK, well then, do you think your country men will agree to pay twice as much for food where they can buy cheaper elsewhere? There’s a reason that Tesco is in the shits and Lidl reigns supreme. The UK consumers like cheap goods and they don’t exactly care if they beggar their countrymen when they get them.

    Standards of living would have to go down by a huge amount in order to make British goods competitive on a world market. What can the UK produce better than anyone else or cheaper than anyone else, something that no other country in the world has an advantage over? The Germans have the cars, the French and Italian have their luxury goods and wines, the Japanese their technology, the US their movies and guns, the Australians and Brasilians and Canadians and the Gulf states have their raw materials. Because that’s the only way you get to be rich as a country nowdays, when you have a tactical advantage over everyone else. Capital can move a production factory from Romania to Estonia or from UK to Mexic in a mater of months, so what can you do that no one else does better? And what does exiting EU mean for that advantage?

    In order for the average UK worker to retain their current standard of living, you have to give extraordinary added value to the global economy. Globalization is not something that can be rolled back. Like water seeks an equilibrium, so do standards of living, and they will come to an equilibrium world wide, mostly because capitalists will always search for the next country where they can produce goods cheaply, in order to extract another half of a procent of profit for their corporations.

    Had you stayed in the EU, the average UK worker standard of living would have fallen anyway, but it would have fallen to the average of the EU bloc. And maybe, due to synergies in the EU market, due to the sheer size and bargaining power of that bloc, that average would be a bit better.

    Now that you are out of the EU, the standard of living of the UK will have to be competitive world wide. You are no longer competing with cheap Romanian produced goods, you are competing with cheap Chinese produced goods.

    The UK and the world have a lot of soul searching to do.

  • 199 Moongrazer June 29, 2016, 9:04 am


    I think this blog has always been replete with strong (and sometimes quite personally cutting) opinions directed at groups of individuals. That you happen to be in the group on the receiving end for once shouldn’t change anything. I think authors should challenge readers with their writing. Sometimes that will involve strong (and sometimes quite personal) language – because that is one conveys raw feeling.

    Maybe by being a successful blogger you have to be mindful of the sensitivities of your audience. However I, for one, hope that TI and the other authors on this blog never self-sensor in this way. I am happy to read thoughts that echo or challenge my own feelings – because they are just someone else’s feelings. You are free to disagree.

    If we had stayed in the EU, I can only imagine that perhaps this (or any other Remain-leaning) blog would have strong-worded comments about how wrong the authors and we all were for staying in.

  • 200 raluca June 29, 2016, 9:08 am


    Oh, and also “Goodwill between nations, hey?” – Yes, I do believe Farage’s speach yesterday in front of the EU parliament was an example of the goodwill of the British people towards their EU brothers. It was widely reported throughout the world as an example of restraint and diplomacy.

    Should we respond in kind, you think?