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Weekend reading: Armistice Day 2020

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Yeah, Brexit, then the rest of the week’s good reads.

The news is not good but it is official: at midnight 31 January 2020 an armistice is in effect between the forces of Remain and Brexit.

The four-year long war is over. Remain lost.

The terms of the armistice agreement – or ‘surrender deal’ as many will call it – will be tough to swallow for Remain’s exhausted troops.

But given the decisive victory for the Brexit Barmy Army in the climactic 12 December 2019 battle, fighting on was hopeless.

The key concessions granted from 31 January:

  • British citizens and their children give up their birthright to live in any of the EU’s 27 member countries.
  • British citizens and their children also lose their automatic right to travel and work in any of the 27 countries.
  • Britain will pay £33bn to our former ally, the EU, over the next four decades.
  • UK companies can no longer be assured of access to the EU’s ongoing market of 450 million consumers and its £13.5 trillion economy.
  • British companies can no longer assume they can recruit vital and skilled workers from the EU.
  • Britain will exclude itself forever from the trade and political deals made between the EU and its fellow superpowers the US and China, and will have to acquiesce to innumerable rules and regulations imposed by Brussels without our input.

After four years of bitter struggle, this is tough to read.

And nothing can bring back the £130 billion the Brexit War has already cost the UK.

Some who fought in key skirmishes such as The Battle of the Enemies of the People will never forget the blows to our institutions in the fighting.

Historians will dissect the conflict for generations. After all, when a million people marched for Remain compared to the barely 300 that muddled about for Brexit, it seemed the tide was turning.

But whether by winning hearts and minds or by bamboozling brains, the forces of Brexit triumphed.

Blitzed spirit

Of course an armistice – a cessation of hostilities – is not a peace treaty, let alone a Marshall Plan.

With Brexit’s leaders struggling to articulate a strategy that fits the facts on the ground, it’s difficult to be optimistic about Britain’s potential to make great gains from here.

One Brexit commander, Michael Gove, is already briefing UK business that it will indeed be impossible to secure friction-less trade with the EU, under the government’s own vision of Brexit.

But this is the same side that said we’d pay not a penny to the EU – compared to £33bn – so who knows what other reversals lie ahead.

Even more than money, one wonders about the long-term consequences of the conflict and its ramifications on the social fabric.

A campaign to raise money to have ‘Big Ben Bong for Brexit’ raised a feeble £273,000 and received only 14,000 donations (£50,000 of that from one key Brexit backer), underscoring the lack of euphoria across much of the nation.

Indeed many Brexiteers still seem incredibly angry despite their victory, frothing and waving Union Jacks as they marched out of Brussels.

This contrasted with our former allies in the EU singing Auld Lang Syne to wish us a fond farewell.

Barry Island

Set against all that, Britain is a wealthy nation.

Admittedly its economic output is but a fraction of the mighty EU perched off our shores.

But we will muddle through. Poorer, almost for sure, and more isolated by definition. But not broken, as Barry would no doubt stress.

Perhaps our leaders will look to the example of post-WW2, when the ruined nations of Europe came together – barely a decade after killing millions of each other – to form the European Union.

The formation of the EU ushered in a golden age of peace, prosperity, and cooperation the likes of which we’d never before seen.

Let’s hope we’re so lucky.

From Monevator

How much wealth do I need in my ISA versus my SIPP to achieve financial independence? – Monevator

Getting hands-on with your budget with Money DashboardMonevator

From the archive-ator: Review: How To Make A Million – Slowly, by John Lee – Monevator

News

Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1

UK house price growth at 14-month high, says the Nationwide – BBC

UK interest rates held as economy shows signs of picking up – BBC

MPs’ report calls for inheritance tax to be replaced by 10% tax and a death allowance – ThisIsMoney

London stock traders push to shorten their day by 90 minutes – Bloomberg

Portugal set to curb tax breaks for wealthy foreigners [Search result]FT

(Click to enlarge)

What happened to UK house prices over the past 174 years? – ThisIsMoney

Products and services

The best deals on interest-free overdrafts [Search result]FT

The best apps to get fit with your friends: from Fitbit to StravaGuardian

RateSetter will pay you £20 [and me a cash bonus] if you invest just £10 for a year – RateSetter

Disgraced Neil Woodford’s smaller Income Focus fund will reopen on February 13 –ThisIsMoney

Homes with unusual roofs [Gallery]Guardian

We both get a free share if you open an account with FreeTrade and fund it with £1 – FreeTrade

Fintech mini-special

Vizualising the current landscape of the fintech industry – Visual Capitalist

Every company will be a fintech company – Angela Strange/a16z

Comment and opinion

Why market timing can be so appealing – Of Dollars and Data

Buffett’s bet against hedge funds revisited – Humble Dollar

Do recessions need to happen? – Cullen Roche

“I made headlines as a personal finance guru. Within months, I was drowning in debt”Guardian

Putting the next market downturn into perspective – A Wealth of Common Sense

Art as an asset class: Evidence from John Maynard Keynes [Research, PDF]Oxford Academic

The hidden risk [not all…] FIRE investors miss – Movement Capital

Nobody wants your shit – Abnormal Returns

The investment impact of an ageing population – The Evidence-based Investor

Naughty corner: Active antics

Stop worrying and learn to love momentum – Klement on Investing

Pondering power prices and premiums – IT Investor

Politics and Brexit

The seven stages of Remainer grief – UnHerd

Martin Wolf: Britain after Brexit will not be alone, but it will be lonelier [Search result]FT

Why one left-wing Brexiteer won’t be celebrating Brexit Day – UnHerd

Can you still live in the EU after Brexit Day and other questions answered – BBC

At last we hear from everyday Leave voters the compelling reasons for Brexit [BBC video] – James Felton via Twitter

Kindle book bargains

[Note: These prices will expire end of Friday 31 January.]

The Looting Machine: Warlords, Tycoons, Smugglers and the Systematic Theft of Africa’s Wealth by Tom Burgis – £0.99 on Kindle

The Making of a Manager: What to Do When Everyone Looks to You by Julie Zhuo – £0.99 on Kindle

Economics: The User’s Guide by Ha-Joon Chang – £1.99 on Kindle

Off our beat

The two key questions that will determine if the coronavirus outbreak becomes a pandemic – Vox

Different kinds of easy – Morgan Housel

Why procrastination is about managing emotions, not time – BBC

Stay quiet and get to work: Why you shouldn’t share your goals – Art of Manliness

And finally…

“Looking for a manager who will beat the market for you over the next 20 or more years is like looking for a needle in the proverbial investment universe haystack.”
– Tim Hale, Smarter Investing

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Comments on this entry are closed.

  • 151 JimJim February 3, 2020, 5:33 pm

    That’s you out of the frame Neverland

  • 152 Fremantle February 3, 2020, 5:46 pm

    @Neverland

    Maastricht was signed Feb 1992
    Black Wednesday was 16 Sept 1992

    There were several votes before it was finally ratified on 3 Aug 1993, with Major having opposition from both Labour on the Social Chapter, and survived a vote of no confidence with several Eurosceptic Tory ‘bastards’ losing the whip.

    A referendum on June 1992 in Denmark saw it defeated, finally being passed on a second referendum (one of the sources of the ‘keep voting until you get it right’ jibes).

    A French referendum saw it narrowly pass 50.8% in September.

    Major was not that secure, he only had a majority of 20, and was faced with significant Tory rebellion on the issue.

    I’m not entirely sure it would have succeeded is put to a vote, particularly as Labour and Liberal Democrats were opposed to the opt out clauses.

  • 153 Grislybear February 3, 2020, 6:24 pm

    This has been a really good comments section. Great comments from everyone. Even the father of ‘Mrs Accumulator‘ decided to join in, I would like to congratulate him on the success of his sons emigration to Germany.

  • 154 Naeclue February 3, 2020, 10:10 pm

    On a more positive note, I found the news about MPs proposals to abolish the current inheritance tax rules quite refreshing. The full paper is here for anyone interested:

    https://www.step.org/sites/default/files/Policy/Reform%20of%20inheritance%20tax%20report%20Jan%202020%20final%20ALT.pdf

    The idea to heavily reduce the rate from 40% to 10% (possibly increasing to 20% death tax on higher value estates) and seems a step in the right direction. The present system is crazy, as anyone who has had to administer an estate or two will likely agree. Having to trawl back through 7 years of accounts to try to identify gifts, then match them to recipients, then allocate to income, £3k allowance, etc. is a total nightmare.

    The new system would sweep away most reliefs, get rid of CGT uplift (CGT is cancelled on death at present) and charge a 10% tax on gifts over £30k per year.

  • 155 Mousecatcher007 February 3, 2020, 11:58 pm

    @ The Investor

    But you didn’t say ‘many’ Brexiteers in your original comment; you said ‘most’. We both know the difference matters. And so does your sleight of hand.

  • 156 The Rhino February 4, 2020, 10:13 am

    @Naeclue – thanks for the follow up link on the IHT reforms. I found it a pretty interesting read.

    The current IHT setup is a horrible mess for sure and encourages all sorts of avoidance behaviours. The general feeling I get is that if you pay it (or at least you pay it in full), then you’re stupid. That’s not a good start for a tax.

    The proposals look better, but that said, the worked examples do show that there are problematic edge-cases, i.e. farmers all go bust.

    I’ll be watching developments closely, but in the meantime, expensive tax accountants are still the lesser of two evils.

  • 157 The Investor February 4, 2020, 10:14 am

    @Mousecatcher007 — Well actually I said “very many” in my reply to you, if we’re being pedantic, not “many”. In any event I’m happy with the general inference, which is that I’ve found Brexit-supporters as a group unable to articulate the point of Brexit, except, as ever, where they focus *specifically* on maximum technical sovereignty (albeit usually for no discernible end they can explain, but as an axiomatic best position) and/or to potentially reduce immigration.

    One might reply that this is because I disagree with them, but that’s not entirely so.

    For example, I disagree with bringing back the death penalty, but I fully understand the case for doing so. I’d vote against it all day long in referendums, but I wouldn’t be sitting there wondering what I was missing, or hear supporters say things like “well the murderer will be dead” that left me thinking “hang about, no they won’t, that’s not true at all” which is what listening to most Leave supporters has felt like for four years.

  • 158 Passive Investor February 4, 2020, 1:09 pm

    @TI – sovereignty isn’t just technical. There is a world of difference in the UK Parliament choosing say to align regulations to enable a trade agreement and having the regulations imposed from Brussels. It’s about political and democratic accountability. It’s about people caring where and how decisions are about them are made. And it’s also about having a sense of history and realising the importance of trusted institutions in a stable society. If you can’t at least understand this despite disagreeing then that is perhaps why the ‘debate’ on this thread sometimes has the atmosphere of ships passing in the night.

  • 159 Neverland February 4, 2020, 1:19 pm

    @Passive Investor

    “There is a world of difference in the UK Parliament choosing say to align regulations to enable a trade agreement and having the regulations imposed from Brussels.”

    That’s only true if you live in England mate. If you aren’t English but you’re British, Brussels/London what’s the difference?

    Trusted institutions – really? I can’t name one universally trusted UK institution right now except maybe the ONS and OBR?

    Stable society – The government just suspended parliament illegally and we are about to cut 50 year old diplomatic ties with 3m people from the EU living here, how is that stable?

  • 160 The Investor February 4, 2020, 1:23 pm

    @Passive Investor — I can “at least understand this” which is why I repeatedly make that concession. 🙂

    The reason I say ‘technical’, which is a term I’ve used many times in the past including with conversations with you, is the flip side of the same points you make about the ex-regulatory, ex-Parliamentary, ex-judicial nature of Sovereignty.

    The reality is that as a smaller, weaker, isolated nation, we are going to have more sovereignty in theory because we’re not in the EU, but in practice we’re going to have to make all kinds of other concessions to reflect that reality. So yes, we will make our own trade deals, fully under our own steam. But they will by and large, with exceptions here and there, be weaker than the deals we could have made or had under our old EU arrangements (assuming no bonfire of regulation, social welfare, taxes etc). That is the reality of trade negotiating.

    Similarly, we may not be bound by the purported greater political integration of Europe that many resist or don’t want at all. But we will have a half-arsed nuclear arsenal and weak military that cannot act alone, so we will be more beholden to allies, principally the US.

    Again, we may get some of these deals Brexiteers are so fond of championing with, for example, China. But our ability to push back on them with our human rights agenda will be curtailed.

    I could go on and on.

    Yes, legally more sovereignty, as I’ve said many times. In practice, being in the EU has cost most Leave voters absolutely NOTHING in terms of their freedom of action, rights, and pocket books. I’d argue in fact it’s boosted all those — more travel, more rights, and for the majority richer.

    In contrast our decision now leaves us king of a shrunken castle.

  • 161 The Investor February 4, 2020, 1:59 pm

    @all — Closing comments here for the usual reasons. These Brexit threads just take too much moderation to leave open, and I don’t want them to sit on the web and become infested with mooks. 🙂

    Thanks for all the thoughts. Hopefully we can have a break for a while. I don’t intend to write up the blow-by-blow accounts of the trade negotiation now, as realistically we’ve vested Johnson and his government with all power.

    We’ll just have to wait and watch for clues as to what we’ll get, calibrating accordingly.