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Weekend reading: Control yourselves

Weekend reading: Control yourselves post image

Good reads from around the Web.

Well here we are, one month into the year of the people Taking Back Control. Isn’t it going well everyone?

In the UK the people have Taken Back Control and given it to a handful of Tory MPs. This right-wing minority of a centre-right party will now unilaterally establish how this country trades, regulates, and protects its citizens for generations.

What could possibly go wrong for the provincial masses1 who voted for Brexit?

Of course, MPs have been told they’ll get a vote on the final terms of our departure from the EU. And as this week has shown they’ll be called traitors and enemies of the people if they don’t simply wave it through.

What part of democracy don’t I understand? That’s what Brexiteers have been shouting all week, as they lambasted anyone who questioned giving the government the right to pull us out of Europe before we’d reached any sort of national consensus on what Brexit should and should not entail.

An admittedly Herculean task, given the flat-out contradictory hopes and motivations of Leave voters, but that’s on a Leave voter’s conscience, not mine.

No, we voted out, that’s the litmus test for all routes forward. That’s the constant refrain. It’s like going to the doctor because you have an ingrown toenail and seeing your leg amputated. “Yes, but we’ve dealt with the toenail!”

Top trumped

Meanwhile in the US the people have Taken Back Control and given it to a thin-skinned autocrat who seems to be deliberately probing the system for its weakest links. He’s also openly scornful of the international institutions and alliances assembled in the past 70 years to keep the great powers in check and stave off total war, and the globalization that has helped take a billion people out of poverty in the past 20 years.

And he is not wasting any time in sorting out America’s problems!

On Friday he announced his administration would tear into the post-financial crisis regulations to get banks to lending again.

He literally – I shit you not – stated that he has “friends” who can’t borrow.

But let’s cut him some slack; you can see the lack of lending pretty clearly in this chart from the US Federal Reserve:

Chart of total US commercial and industrial lending.

US commercial and industrial lending in billions since 2007.

Source: St Louis Fed

I mean, I know it looks like total US commercial and industrial loans are now running about 30% higher than before the financial crisis.

But that’s just a fact!

You’ve get to get hip to alternative facts. You know, bogus funding claims written on buses, massacres that didn’t happen, nonsense theories that sound right but that are flatly wrong about the impact of immigration, trade, and so forth.

These distortions might all make for good sport in a world without nuclear weapons.

Unfortunately we don’t live in such a world. As with all his predecessors, a man follows the new President around day and night with the nuclear codes that enable him to begin World War 3 in about the time it takes to compose a Tweet.

Died in the wool

I would like to think those reasonable people who voted us out of Europe for reasons of sovereignty or even economics would at least now acknowledge the downsides of the alliance they made with nationalists, racists, and fascists to push them over the 50% mark.

Social media suggest they won’t. People are getting more entrenched, not less. There’s every chance it could get worse before it gets better.

I also don’t know if there are any Barry Blimps still reading Monevator. But there should be fewer than there were just through the natural attrition of the Leave voting cohort.

Here’s some – not to be taken hugely seriously – maths I shared with friends this week:

I’ve just been looking at Office for National Statistics data on deaths. I estimate at least 300,000 UK citizens have died since the Referendum.

Around 64% of over 65-year olds voted Leave, compared to just 29% of 18-24-year olds. Very few people die before 55, which is around the age that people started to favour Leave. Mostly the oldest Leave-ist voters die. Voter turnout was 72%.

Consider older people were more likely to turnout, assume people don’t change their vote as they get older, squint a bit, and I guestimate about 22,000 Leave voters are dying every month.

Brexit won by 1.2m votes. Within about five years Leave’s existing margin of victory will probably be dead, leaving us to lump it.

But wait – what about the new young? If we assume 70% or so would vote Remain and constant turnout, then Remain might win a Referendum within three years.

No wonder they want to trigger Article 50 and get us out in two.

(Caveat: All sums done in my head, your mileage may vary.)

Of course you can quibble with my assumptions.

For instance it’s possible young people are looking at the cabal of Conservative ministers heading off to Brussels to decide the future of the UK for themselves, at Nigel Farage chilling with Donald Trump, at the US refusing entry to its own legal residents for a period on a presidential whim and they’re thinking: “Hey, I don’t know what that guy is smoking but I want some of it!”

What do I know? I’m just a liberal elite snowflake.


From the blogs

Making good use of the things that we find…

Passive investing

Active investing

Other articles

Product of the week: ThisIsMoney reports that Tesco Bank has pledged not to cut the 3% interest rate paid on cash held in its current account for the next two years. That’s welcome, given how the likes of Santander have taken the axe to their own rates. Unfortunately you’re only paid 3% on balances up to a maximum of £3,000. Still, that’s good for £88 a year. [Insert obligatory “Every Little Helps” quip here.] [Update: See @BigPat’s comment below about holding multiple accounts as one individual!]

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.2

Passive investing

  • The limits of investment maths – Morningstar
  • Passive investing set to claim half of equity and bond markets [Search result]FT

Active investing

  • Inside the high-stakes world of binary options [Bargepole! Search result]FT
  • Here’s a theory for investors: Trump is an alien [Search result]FT
  • US companies reconsider corporate citizenship – Strategy Business
  • Neil Woodford getting ready to launch a higher income fund – ThisIsMoney
  • US hedge funds start to bet big on Europe [Search result]FT

A word from a broker

Other stuff worth reading

  • Are you a financial ostrich, engineer, or pragmatist? [Search result]FT
  • Estate agents asking buyers to pay to prove they’re serious – Guardian
  • Steven Webb calls for ISA limits to be slashed to encourage investment – ThisIsMoney
  • Are ‘split ticket’ websites the best way to save on train travel? – Guardian
  • Buy an artwork, fund an artist’s pension [Search result]FT
  • Becoming Warren Buffett: The man – The New Yorker & Business Insider
  • Five things that prove rich people are cheap – Market Watch
  • AI/Super-intelligence debate with Elon Musk and more [Video]YouTube
  • Did going to college help Michael Corleone? [Podcast]Bloomberg
  • Trump: An insurgent in the White House – The Economist
  • Doomsday prep for the super-rich – The New Yorker
  • Ken Clarke’s anti-Brexit speech in full [Video]The New Statesman

Book of the week: I hope it rains this weekend, as I can’t wait to get stuck into Ed Thorp’s autobiography: A Man For All Markets. Ed Thorp – who had lunch with the FT this week – was the first person to figure out the maths of card-counting in Vegas. He then went on to make millions on Wall Street, where his hedge funds pretty much pioneered quant investing. Thorp is in his mid-80s and his life story has just been published. I expect to be inspired!

Like these links? Subscribe to get them every week.

  1. Yes, I understand not every Leave voter was a member of the provincial masses. Perhaps you weren’t. But they are the ones I am talking about here. See how it works? Maybe I’ll write about another kind of Brexit voter later on. Who can tell! []
  2. 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”. []

Comments on this entry are closed.

  • 1 Neverland February 4, 2017, 12:43 pm

    There is a lot of ruin in a great nation

    France and Italy, for instance, have survived decades of government mismanagement and are still first world countries

  • 2 Adam February 4, 2017, 12:44 pm

    A bunch of old people may have died, but don’t forget that new future old people are being born all the time, if you get my drift.

  • 3 Mark February 4, 2017, 12:46 pm

    The argument that the Brexit vote would have turned out differently had it been held today because some of the elderly who voted to leave are now ddead contains a logical fallacy. If there’s a positive correlation between age and voting leave, some of those who chose remain back in June and are now older would instead have ticked the leave box. Worse, since the UK population is ageing, the longer you wait to hold any second referendum, the greater the demographic bias toward leave.

  • 4 ermine February 4, 2017, 1:06 pm

    A top rant, sir, a good start to the weekend 🙂

  • 5 Passive Investor February 4, 2017, 1:06 pm

    It has occurred to me that you are on a mission to reduce the number or leave voters by giving us all rage-induced strokes or heart attacks 😉 A couple of points though. Yes, Brexit and Trump were both manifestations of widespread popular dissatisfaction with the status quo (stagnant living standards etc etc). But it doesn’t logically follow that they are much the same otherwise or equally bad. I would probably agree with all of your opinions about Trump (rabble-rousing demagogue, protectionist, psychologically unfit to be President and more). But as you know I don’t agree with your view that Brexit is bad. I am sorry to say this but I think that some Remainers are so angry about the result that they simply won’t listen to the positive, optimistic and pro-democracy (since when has the European Commission been a friend to democracy?) arguments for Brexit. This isn’t necessarily you, though the anger that comes across in your writing and the fact that you are so quick to criticise the motives of ‘some’ Brexiteers isn’t off-set by the fact that you do acknowledge that some Brexiteers are reasonable. One of the good things about British culture is that there is relatively little proper racist sentiment and racist parties don’t thrive in our elections (cf the BNP vs Le Front National). UKIP is a bit whacko and Farage during the campaign disgracefully was prepared sometimes to dog-whistle to racist sentiment but I simply don’t see the evidence that a significant number of Brexit voters were “racists and fascists”. Is the way I understand ‘nationalist’ as ‘a person who advocates political independence for a country’ bad? Or perhaps it is if you are English or even British in 2016 but not if you are Scottish or were Indian in 1948 or Hungarian in 1956? A final thought is that I don’t accept that it is racist to be concerned about uncontrolled immigration. It is right and not racist to think that it is wrong that schools, hospitals GPs surgeries are over-stretched by migration. And it is not racist to be angry that you child goes to a school where English language and British culture are the minority. It is also true that if main-stream parties aren’t prepare to acknowledge people’s legitimate concerns about these points then their really is a danger that righteous dissatisfaction really will turn into racism.

  • 6 The Investor February 4, 2017, 1:12 pm

    I wouldn’t say it’s a logical fallacy but I do acknowledge it’s a clear weak point in the argument.

    The truth is we don’t know if people become more likely to vote Brexit as they age, or if it’s a generational sort of tendency, like comparing the views of our great grandparents on say unmarried cohabitation with kids today.

    The strongest evidence you may be right is that of course we were voted in on a referendum in the 1970s, and some of them are today’s old.

    I don’t know the answer, clearly, as I said it wasn’t hugely serious or rigorous, more food for thought. 🙂

  • 7 Duncurin February 4, 2017, 1:28 pm

    I suppose it’s a bit like metrication: started in the 1970s, but not yet complete as we are still waiting for all the old people to die. 😉

    I think that it could turn out to be the economy, stupid, after all. Should the economy really go down the tubes, which is by no means certain at this point, then Brexit would lose a lot of its glamour. There is a lovely interview with Kenneth Clarke in The Times today.

    “I compare it to the Iraq war. That was the last time I stuck my neck out in supporting a really unpopular cause — 70 per cent of the British public were in favour of the invasion and most of the Conservative Party was in a patriotic fury. Within 12 months you couldn’t meet a member of the public who had ever known anybody who was in favour of it.”

  • 8 Barry February 4, 2017, 1:31 pm

    I am 73 so I must qualify as ‘Barry Blimp’ especially as I would have voted Brexit if I had not abstained. My kids, (mid-forties) are the ones who have to live with the outcome. I no longer have respect for your ranting but like many others still see Monevator as a spiffing blog, thanks to the Accumulator.

  • 9 The Investor February 4, 2017, 1:34 pm

    Hi, I won’t be able to reply to all comments obviously but I’d likely to state one thing for the record, which longtime readers may recall — yes I’ve said from day one there were some legitimate motivations for Brexit, that the EU wasn’t perfect etc. From memory I’ve said before I think it could get me about 30% of the way there, hugely outweighed by downsides.

    These are numerous enough — most especially the nasty forces mustered and unleashed by this growing nationalism — that I feel no great need to outline a few pros every time.

    Similarly, of course there will be upsides. Everything has pros and cons, only dogmatists think otherwise. The issues with voting Leave — aside from the nasty alliance — is different voter’s pros and cons are very different and often contradictory.

    So for instance we could become a low tax Singapore lite. Will be fine for me, economically, I’m a self directed entrepreneur. And probably closer to where the Tories aim to steer things. But clearly not what a huge cohort of Leave voters asked for — the opposite.

    Similar even in @PI’s reasonable response we’re still debating whether to say some Brexit voters were motivated by racism/etc means a huge number were. You only won by 1.2m votes / less than 4%! So you only need a small number to swing it.

    If I’d voted Leave for other reasons I’d be horrified of the direction of travel, here and abroad. Ho hum.

  • 10 William III February 4, 2017, 1:57 pm

    Why not vote with your feet? The continent has great places just a short flight away. We bought a house in the centre of one of Holland’s best cities at €3k/m2. We’ll move there shortly after our firstborn has arrived in a few weeks. We refuse to let him grow up in a Trump-May dystopia effectively governed by shady interests and ideologues behind alt right media and the daily mail.

  • 11 The Investor February 4, 2017, 2:34 pm

    @WIII — Yes I have a few options, and I’ve made sure some will remain in place. I think it’s prudent that anyone who thinks like me does so, although I’m about 95% that it won’t come to that. But various populations have thought similarly in history…

    Bottom line is I love the UK and London (alas in the latter case) and that also all the world is in the midst of these shifting forces now. (There has been all sorts of nasty politics in Holland as you know). Ultimately I think the British are mostly a strong and small l liberal people.

    Perhaps I also hope when negotiations start they’ll resolve the compromises that are currently deemed impossible and fudge some sort of Brexit-not-Brexit. Given the contradictions in the Leave vote constituency it’s going to look like that to some whatever they do.

    Finally, humility. 🙂 I was wrong about the immediate economic aftermath of the vote, as I at least quickly acknowledged. Perhaps Brexit will actually solve more problems than it causes. I ascribe a middling to low probability to that, but neither we nor me are past any points of no return yet…

  • 12 FI Warrior February 4, 2017, 2:35 pm

    Generally, even ordinary people are egotistic to the point where they can’t admit to mistakes, let alone life-changing clusterf’ks, so the brexwits will never change their tune, leaving only death as the game-changer as you say. Replacement for their ranks as people cross the line into their late 50’s may not be a guarantee once that demographic find their pensions wont keep them alive.

    The rabid right-wingers who incited the ignorants are set to do well whatever the outcome because they were already wealthy, so now they can just laugh at the susceptibility of the general public/voter. The majority who followed that dogwhistling will be eviscerated, which admittedly is a small consolation for those tolerant citizens.

    I remember panic and near-chaos in the run-up to Y2K, then the next day in the anti-climax, an eerie, unreal calm to the point where you doubted your own sanity, it was like a majority of the entire country had an unwritten pact to forget the entire thing happened, out of embarrassment. Like an earlier comment, I wonder how many of these currently swaggering bully-boys will still be proudly shouting from the rooftops that they contributed to reducing the Uk to a second-world country when the first bilateral trade agreement is signed up with the likes of Pitcairn island, whatever-stans/other pin-pricks on the globe. We should get ahead of the curve by studying the US health care system.

  • 13 BigPat February 4, 2017, 2:36 pm

    @TheInvestor Minor addendum, you can hold two Tesco current accounts at the same time as an individual, that’s good for £180 a year 🙂 . You could hold 5 as a married couple getting £450 a year, even the accumulator would be proud of that rate tarting (http://monevator.com/maximise-savings-rates/).

  • 14 Martyn February 4, 2017, 3:01 pm

    We were taken into the EU without a vote (because it would have been lost)

    When we did have a vote two years later (when it was deemed winable). It was for an organisation manifestly different from the one it is today and the one it aspires to morph into. Even so, whilst the headline number in favour was 66%, turnout was much lower than 2016’s. Most if not all arguments remainer make about this refendum (which they lost) are equally applicable to the 1975 one (which they won). In other words the only thing that really matters to them is the result (which they don’t like).

    The wealthy establishment on all these votes did their level best to get the result that was best for them (and where possible avoided a vote altogether). What’s best for them has a proven history of not being best of the rest (and I’m one of the wealthy, if I had voted purely from self interest I would have voted to stay)

    However, who wants a re-run of the Soviet Union? Not me and I sure was not voting for it. People, who voted to remain, even if they don’t realise it, did.

    My view at the moment is we should call an election and sort it out once and for all. This would either bolster the rebels who want to thwart the referendum, or remove them from parliament and allow things to move forward.

    I remain convinced though that those who don’t except the result are plying with fire. Marginalised, dissaffected and ignored people tend to polarise.

  • 15 Trevor February 4, 2017, 3:01 pm

    Re your view on the great Britis ‘Yoof’ unfortunately they mostly seem incapable of leaving their mobile phones, You Tube, Beats headphones long enough to actually put a cross on a ballot paper – so not much hope there.
    Always a good read – but me thinks Brexit will happen so may be we now should turn our attention to planning for it ?

  • 16 The Rhino February 4, 2017, 3:08 pm

    Have you considered a media fast? No news February to follow dry January? You might like it? Could be a bit detrimental to the weekly roundup though?

    Tangentially, has TA ever written about the flip side to the importance of saving? I.e. the importance of spending to those that are hopelessly thrifty. I think it could be worthy of an article and have a suspicion it might be a serious issue for many. Certainly is for me.

    Anyone else share this concern? Have any strategies to boost consumption? I am genuinely serious about this. It doesn’t get a lot of airtime compared to the saving piece (which is done to death) yet i feel it could be just as serious a problem in terms of holding people back on the happiness front. Particularly pertinent asking the FI crowd?

  • 17 Mr optimistic February 4, 2017, 3:14 pm

    Not much point being angry about something you can do nothing about. We are all passengers in this. By the look of it there will still be plenty up for grabs at the next election and it’s the political implications, somewhat more than the economic ones, that worry me. Fair chance that May will go to the country before then so that election would effectively become Brexit part Deux and that could get ugly.

    I reckon based on observations that there was a fair correlation between age and voting to leave. However perhaps the youngsters were complacent or lazy and didn’t get out to vote in quite the same proportion. I know I was very surprised when I turned up in the evening to vote at the village school, population less than 500, that I had to stand in line. That never happens in general elections. At the time I thought that signalled a strong vote to remain. How wrong was that.

  • 18 The Investor February 4, 2017, 3:19 pm

    @BigPat — Cheers, have added a comment to that effect to the boxout. (I would love to find a new @TheAccumulator to cover personal finance!)

    @FIW — I think it’s already clear that there are so many moving parts, that all of us are going to be able to argue anything we want in 10 years time. Every group of Leavers will be able to say it wasn’t the Brexit they wanted, because the main cohorts want different things so most will probably be unhappy about major planks of it.

    But equally I don’t personally think the economy will totally implode, certainly not long-term, like I’ve said before my base case is a modest reduction in GDP for a few decades — enough to make a big difference to living standards (say 25bp average a year) and the whole thing very stupid economically speaking, but not enough to make it clear winning argument that Brexit was a disaster. (How many people now remember or considered before voting what a basket case the UK was before entering the EU? The sick man of Europe, the IMF and all that? People have short time horizons). So Remainers may have a tougher argument on their hands, optically, even if they’re right, if we could even prove such a thing.

    The social consequences may be clearer, but then as I say it’s getting nastier everywhere, the Brexit vote just embraced that direction of travel. (To what extent did our Brexit vote make the new nationalism in the US more likely, that’s a scary and sobering question). You could be right about things like the NHS, but a left-wing Leaver will say it was because Tory Brexiteers did the deal (which takes me back to the start).

    This is why I tend to go back to basics.

    Is it likely the world is going to be better as countries become more insular, more unilateral, have fewer multinational agreements, have less constraints on capital, and generally withdraw from the big institutions that encouraged jaw-jaw, not war-war, and at the least have prevented nuclear Armageddon? If I believe in free trade, does leaving the world’s largest richest trading bloc make sense? If I believe climate change is real and environmental collapse a big threat, does diminishing my country’s ability to help move the dial by being part of a major bloc make sense? If I think Islamic extremism is a potent force, is the world I like massively safer just because I’ve voted to try to dump the problem on my neighbors, via some moveable feast of restrictions on movement? If I’m concerned about lower income workers and globalization / automation, is one country alone more likely to reach a social contract that sustainable whilst still competing globally? If I prefer people to treat each other as people, not races or stereotypes or fearful foes or similar, is a campaign and perhaps a vote that demonstrably legitimized that kind of rhetoric let alone thinking moving us closer to a world without racism?

    Unlikely, on all fronts, I feel.

    Perhaps if they can negotiate some controls that deal with the edge cases (e.g. off the top of my head, retain semi-free movement, but you have to have been an EU citizen for 15/20 years to automatically qualify, to take the edge off the “Syrian hordes” argument etc) then maybe we can fudge our way through it. I don’t like it and it causes a ton of other problems, but essentially the chalice is poisoned anyway.

  • 19 The Investor February 4, 2017, 3:21 pm

    @TheRhino — I wrote something vaguely along those lines a few years ago:


    This is also in that spirit:


  • 20 The Rhino February 4, 2017, 3:28 pm

    @MO I agree. The world is constantly changing but consistently mad. To invest emotion into something like Brexit is suggestive of a surplus of emotion on the table. Probably means you should be grateful that all emotional reserves aren’t being exhausted closer to home.

  • 21 Michael February 4, 2017, 3:29 pm

    That depends on whether it is an age effect or cohort effect. Someone aged say 25 or 55 now who is pro remain may still be a pro remainer when they are 85. Of course by then they’ll have seen the consequences of Brexit which might or might not provide fresh evidence to influence their position.

  • 22 The Investor February 4, 2017, 3:35 pm

    Probably means you should be grateful that all emotional reserves aren’t being exhausted closer to home.

    You might be amused to learn I sort of agree. I think the Brexit vote and the US presidential are partly a consequence of excess Maslow’s heirachy of needs being largely satisfied, no wars among major powers for generations, everyone forgetting about the nuclear gun pointed at our heads, plenty of opportunity for people who wanted to make something of their lives (not perfect, but plenty) and a welfare state for those who didn’t (or couldn’t!).

    We were all living longer, far fewer in poverty, far lower social stigma due to race / religion / teenage pregnancies. The world getting steadily richer.

    Unlike the typical angry voter though (Brexit/Trump) I thought that was something to celebrate, not something to kick over.

    They were angry at the good times. I’m angry that they’ve threatened them.

  • 23 The Rhino February 4, 2017, 3:35 pm

    @TI links spot on. Should have known you d already covered it.

    I think the answer could be to ask older people their perspective on what they should have spent on as it seems only with the benefit of hindsight that these things become clear.

    Right. Better phone my old man before the rugby starts..

  • 24 European Passive Investor February 4, 2017, 4:25 pm

    Good luck on your own, dear Brits. Time will tell, if this was a good decision.

    I reduced my UK exposure to Zero.

  • 25 Gregory February 4, 2017, 4:29 pm

    2017 will be very challenging for Europe regarding the elections beside Trump.

  • 26 helfordpirate February 4, 2017, 4:43 pm

    “I would like to think those reasonable people who voted us out of Europe for reasons of sovereignty or even economics would at least now acknowledge the downsides of the alliance they made with nationalists, racists, and fascists to push them over the 50% mark.”

    You keep making this point – as if a voter should be somehow responsible for the views of other people who happened to vote the same way. We were asked (foolishly in my view) to make a binary choice in the privacy of the polling booth – that ‘s all we had to do (and even that sadly was too much to ask for the under 25’s). The views and motivations of others who may or may not be voting the same way as you can’t be front of mind – or none of us would ever cast a vote for anything,

    If you believe in a progressive social agenda and want to vote Labour are you somehow tarred by the undoubted number of anti-semites dressing up their hatred in pro-Palestinian rhetoric; if you believe in smaller government and open markets and want to vote Conservative are you an accessory to the casual sexism often apparent on the backbenches? (Sure, if you are a Party member, but not the average punter.)

    There are some unpleasant people out there with ugly and ignorant views – sometimes they tick the same box as you.

  • 27 xiox February 4, 2017, 5:07 pm

    @TheInvestor I don’t think it feels like the good times for anyone vaguely young – no certain career paths, massive costs for education, incredible costs for housing, ever-retreating retirement and likely environmental degredation. Interestingly it was the young who voted largely remain, not that I think brexit will solve these issues.

  • 28 The Investor February 4, 2017, 5:09 pm

    @Helfordpirate — I take your point, and it’s not without merit. However for me the toxic elements / portion of vote was a fairly central plank of the Leave campaign.

    Where sovereignty turns into “Brits know best, the EU is corrupt, the new Soviet Union…” or “I’m worried about the pace of immigration and my children growing up in class where everyone speaks Polish/Urdu/whatever” turns into “They’re taking over our country, Sharia law is coming, you can’t trust ’em, they’re stealing all our jobs and our women” etc is clearly a matter of debate, as we’ve all been debating for the past few months.

    But for me it’s clearly strongly in the mix. To take your analogy, you just don’t get leading members of the Labour party arguing up and down the country that Israel should be carved up, or whatnot. Those are unpleasant fringe beliefs. Whereas the reason we have all been debating so angrily about the EU vote is because the toxic elements were not under the carpet with the Referendum.

    For many people (not all, perhaps not a majority, but a lot) they clearly were the carpet.

    Personally, if I’d been anything other than rampantly anti-EU, I couldn’t have aligned myself with those people and implicitly endorsed the campaign and having such views.

    But as I say I can certainly concede the difficulty.

  • 29 The Investor February 4, 2017, 5:19 pm

    @xiox — Fully agree the young are getting the short end of the stick, as we’ve discussed many times in other contexts on this blog.

    However by almost any reasonable measure — and accepting the inherent difficulty and subjectivity of such things — for me it’s pretty clear the past 20-30 years in Europe has been by far the best time to be alive for the maximum number of people in all of human history. Basically no major wars in terms of huge numbers of people, no credible nuclear war threat, health care for the vast majority, enough cheap food to make you ill/die if you want to, far greater tolerance of all kinds of minorities, far wider education, ever longer lifespans, improving environment (at least on land), Star Trek like super technology (e.g. smartphones), cheap travel across a basically safe world, I could go on.

    Not perfect by any means, but there’s really been no comparison historically speaking for this many people in so many diverse yet interconnected countries at once.

    But anyway, yes, we should have been making sure it was working for more. Sadly I (like many) saw some kind of shock coming if we didn’t, and now it seems it’s here. (E.g. http://monevator.com/consequences-of-income-inequality/)

  • 30 Anarchy in the UK February 4, 2017, 5:22 pm

    You’re letting your despair over Brexit cloud your judgement. Aside from wanting to control low-skilled migration there’s nothing right wing about the current government. Many of its policies, e.g. curbing executive pay, worker representation on boards, infrastructure spending and more equal distribution of wealth outside the south east are actually left wing. Ed Milliband’s former speech writer traced a number of them, including controlling migration, back to Labour’s 2015 election manifesto, right down to page numbers (although they were already foreshadowed in May’s 2013 ConHome speech and others):


    As an EU national and life long social democrat who would have voted Remain had I been allowed to vote, I’ve accepted that there’s no way out of this, only through it by tackling the issues that caused the disillusionment and anger that made people see Brexit as a protest vote while trying to get an acceptable deal from the EU. Trying to stop or fudge it will only make them even angrier and then the next general election could sweep a real populist into power, which is what happened in the US, instead of a main streamer who’s trying to neutralise populism, which is what we have now.

    As for who voted how and why, I found this analysis helpful:


  • 31 david m February 4, 2017, 5:42 pm

    This is rather a long read but is quite an insight coming from one of the key people in Vote Leave:

    I still think Monevator could usefully write more about the investment implications of Brexit, and less about the politics, in providing “motivation for the armchair investor”.

  • 32 The Investor February 4, 2017, 5:44 pm

    @AitUK — Links look interesting, will check them out when back home. (I’m off the train at last, and my rampant replying on-the-phone is finally going to cease from here! 🙂 )

    Just on the Government point though, to be fair I said “centre-right” in the article. It’s the Brexiteers and that wing of the party I am saying is right wing. Also I am really contrasting a likely Tory Leave approach with the vox pop after vox pop after vox pop I heard with provincials complaining about no factories, restarting steelyards, getting rid of the bankers, etc. That’s where the big schism is, economically speaking.

    I’m no lefty idealogue; I’ve voted for all the main parties at some point or another (even the Greens in locals) and I imagine I will again. I’m not sure I agree with your roll call (compulsory workers on boards idea has already gone, declared infrastructure spend is trivial, the rest is just pretty much words at present) but — absent the immigration and Brexit stuff — I don’t find the government the odious entity my left-wing friends do. I even sort of liked May’s global Britain post-Brexit speech, and might have cheered her along two years ago.

    But as it is, we can’t really be sure why anyone is saying what they’re saying (more than usual!) because of the multi-pronged detoxing attempts you mention (that speech was clearly aimed at the likes of me) and of course we don’t know at all what we can/will get.

    What I do know though is her vision would not chime with lots of what those Brexit voters said they were after.

  • 33 The Investor February 4, 2017, 5:46 pm

    @David m — I’ve written eight non-investing Brexit articles in the seven months since June, three of which were in the first week. I don’t feel that’s excessive, personally.

    I understand to those that don’t like them for whatever reason it probably feels like more. It was clearly a lurch into politics on a blog that didn’t really go there much before.

  • 34 Mr optimistic February 4, 2017, 5:53 pm

    @anarchy, thanks for that interesting link. It’s summary is that those over the age of 44 tended for leaving. Bit surprised it was that young as you need to be in your 50’s to remember that there was an existence prior to the EEC.

  • 35 FI Warrior February 4, 2017, 6:11 pm

    @TI, it’s amusing how some people are still commenting on your site to keep you updated on how they no longer read it given it doesn’t reflect their views on what’s right; perhaps I am missing that that was intended as ironic 🙂

  • 36 An Admirer February 4, 2017, 6:19 pm

    As a long term reader, I don’t come here to read a dose of political sour grapes and ravings about all that’s wrong with what other people think. I doubt, if the vote had been to remain, you’d be now lambasting the EU as a yoke around the neck of Britain etc etc. That’s just how it is.

    So sorry mate but it smells of having a political sulk really because the majority didn’t see it your way and you can’t see reason in the irrationality. FWIW I voted to remain too but we have to get on with it, like it or not. Have some faith in capitalism. Please don’t be a blow-hard.

    And now when people question you, you get defensive about the number of articles you’ve written etc. Come on. You’re an astute investment commentator and I value your insight there. I think that’s where your strength and the strength of this site lies. By your own admission, you’re of no fixed ideology and seem to blow to both sides of the spectrum at different times. There’s nothing wrong with that but it would be a real shame if that detracted from your great investment work.

    Just sayin’, you know.

  • 37 Mr optimistic February 4, 2017, 7:05 pm

    Are you guys sure of this?

    First please be careful ascribing characteristics to those of different opinions such that you can promptly attack them.

    Second, in both the USA and here the populace now is the same as before the elections. Those in the US who are saying it’s not their country anymore don’t acknowledge that if this is indeed the case then either they were ignorant of the views and attitudes of half their country to start with, or that they knew but didn’t have to acknowledge their different viewpoint. That they now do and they find it hard to accept is surely a rejection of democracy.

    Third, what is different about the Brexit vote than a general election where, say, a conservative voter has to accept a socialist government and the taxation policies that follow ( or vice versa). Or a vote for Trump when you wanted Hilary?

    Fourth, the idea that Brexit has robbed some of their future. That is firstly defeatist. Are you now going to not help the country achieve the best it can in favour of carping ‘ you’ll be sorry’ (because you will eventually realise that I am smarter than you and you should have listened). So post 2008 the world economy was going so well so everything bad is to be laid at Brexiteers door? Surely a perusal of Europe’s economy, not least the youth unemployment, gives you pause to think was it really looking that good. The years before 2008, the credit boom, the lack of thought to future pension provision, and so on laid the groundwork for the current poor prospects for the younger amongst us. Was the rise in pension age not inevitable, was the NHS funding not in hidden crisis ? The damage was done long before Brexit, which I agree may not help much, but in ascribing blame go back to Blair, Brown and King, your future was in their hands, not just the hands of Brexiteers.

    Oh, and now world peace. You should have tried living in the 60’s and 70’s. We said prayers in school assembly to spare us from nuclear war. On the other hand, are the EU”s expansionist policies in the Ukraine and Baltic states not something to consider ? By the way, diesTrumo want better relations with Russia, and weren’t US relations with China showing tension before the election?

    I wish the world appeared so clear to me as it does to some here!

    I voted remain.

  • 38 Anarchy in the UK February 4, 2017, 7:12 pm

    @ Investor

    I think it’s important to differentiate between right wingers, Brexiteers who can be right or left wing (a die-hard Corbynite friend of mine voted Brexit) and the Cabinet, which is made up of 70% Remainers, including the PM and Chancellor. I often see journalists and politicians both in the UK and abroad quote Brexiteers and on closer inspection they’re backbenchers or not even MPs, like Farage. I agree that it’s tempting to see May’s social conscience as opportunistic but, as I said, she’s talked about this for years and as far back as 2002 warned that disaffected voters are turning to populists because mainstream politicians don’t listen to them. As for her proposed reforms, she didn’t say she’d make it compulsory to put workers on boards, she talked about board representation and various proposals to that effect are in the public consultation which is still ongoing, and while it’s true that they didn’t have much money to blow in the autumn budget there’s been a noticeable shift in focus towards industry and infrastructure. Which is why I think the “bargain basement Brexit” is a worst case scenario in the case of no deal, no matter how much the Thatcherites in her party may like the idea of slashing corporate tax and regulations.

  • 39 The Investor February 4, 2017, 8:28 pm

    @ZXSpectrum — I’ve deleted your accidentally and clearly incomplete posted comment as you requested, but my email reply to you has just bounced. Please do repost the finished version, I felt it added something and people have replied to it, so we’re a bit disjointed now.

  • 40 The Rhino February 4, 2017, 11:36 pm

    @EPI – as passive investing goes that sounds a little bit active to me

  • 41 Warren February 5, 2017, 12:23 am

    I don’t have anything useful to add. Just keep on being that special elitist snowflake. A voice of support and nothing more.

  • 42 Mark February 5, 2017, 1:10 am

    #24 You said you have reduced your UK exposure to zero

    Conversely, I reduced my european exposure to zero, and split the funds between UK recovery and US index funds. This will remain, certainly until after all the elections this year in the major power blocks (France, Germany) and probably until post Brexit happens. My return since Brexit has been helped by both economic sentiment and currency gains.

    I voted remain and am a Europhile and a lefti snowflake – however isn’t it clear that the whole ediface of European government is unstable, and was even pre Brexit.

  • 43 Mathmo February 5, 2017, 1:31 am

    Forgive me if I lift my bat and let the political stuff go through to the keeper without offering a shot. I’ve taken the long walk back to the pavilion like that before.

    Thanks for the links this week, TI. It must be Ed Thorp week as TII posts a lot that is also covered in today’s Lunch with the FT, and as a blackjack playing mathematician, I’m instantly interested in this chap. I enjoy the idea that the strategy is all played out and the “there are 1.6 times as many hedge funds as Taco Bells” was case closed.

    I was also fascinated this week by the NewFound blog. I’d not seen it before and it’s a really interesting exercise that they go through. I’d never seen an efficient frontier calculation played through — and it’s a shame that they don’t provide numbers or chart it in a way that’s readable (too many similar colours for my taste). But wow. It’s also a fascinating view on cash being the opposite of leverage and not just a waste of asset (or a lazy manager not allocating it). I used to hold nearly no cash for exactly this reason: I’d divide up the portfolio and go in full. And then I had nothing when there was a correction and I learnt a little bit more the hard way (again! – try selling short term bonds in a market frenzy – the spread is scary). I’m no longer afraid to hold cash, and watch prices of assets move relative to one another and wait for my — thanks AWOCS — plan to tell me it’s time.

  • 44 Mr optimistic February 5, 2017, 1:50 am

    Yes, I read that blog too. Surprising how much funding and effort is out there trying to reduce the world’s economic existence into a science. All that intellect but there was no conclusion I can use!

  • 45 Hannah February 5, 2017, 2:56 am

    Wow, there is some fire in the belly here – I haven’t seen such a passionate diatribe on Monevator since… forever. I must say, I agree with a lot of what you have said here.

    It’s something of an unfortunate feedback loop – some people are scared, so they vote in extreme ideas and dangerous people, which terrifies the rest of us.

    All of this said, the past few weeks have shown me that although there are terrible people making awful decision in the world right now, humanity is still showing us that there is good in the world and a reason to hope. Over one million people turned up to Women’s Marches around the world to take a stand against all the vile things that Trump stands for. Donations to organisations that help refugees and those who are discriminated against in the legal system have skyrocketed in the US. My hope is that enough people will become politically engaged (and financially engaged in terms of giving to good causes, and standing up to Trump’s fat cat friends) to steer this world away from the dark path we are staring down at the moment.

  • 46 Hannah February 5, 2017, 3:18 am

    @TI, now that I think of it, I’d love to hear your thoughts on the maxim that investors should be fearful when others are greedy and greedy when others are fearful, with regards to the current socio-political climate. I objectively know that I should keep dripping my money into my passive portfolio, but I do feel tempted to batten down the hatches and keep my new savings in cash at the moment.

    Given the cries in the comments section for less politics and more investing, it could be a good way to marry the two.

  • 47 Jeff February 5, 2017, 12:07 pm

    Your analysis implying all the leave voters will die off just doesn’t stack up, since it ignores the point that people’s views may change in light of lifetime experience.

    When I was younger, I was pro EU. Having seen how the EU evolved and gained more experience, my views shifted to being narrowly in favour of leave. I voted leave.

    A proportion of the young people exposed to the biases of the education system are likely to change their views as they gain more experience of life.

    By the way, I’m not some uneducated loser from the provinces. I have degrees from 2 Universities, speak one other European language & have experience of working in 2 other countries, one of which is not in the EU.
    Every year, I travel to EU and non-EU countries. There is a large world beyond the EU.

    Having voted leave, I would do so again. My only doubt is the capability of the government to negotiate a fair deal. Early signs were not at all promising, but there have been some more promising signs in recent weeks.

  • 48 Mathmo February 5, 2017, 12:15 pm

    @Hannah — I think the Monevator (if not the TI) modification of that particular Buffettism is covered by the link to AWOCS this week:- be disciplined when others are greedy; be disciplined when others are fearful.

    Have a plan, stick to it, in the words of Layer Cake.

  • 49 The Investor February 5, 2017, 1:57 pm

    @Mathmo — I was really astonished in one of the Thorp pieces to discover he was the same Thorp that Buffett pointed people towards when he wound up his partnership. As a Warren B groupie I’ve known about a ‘Thorp’ for a long time (it was him and the Sequoia fund that Buffett endorsed, from memory, and perhaps at some point Walter Schloss’ operations) but I had never made the connection to the card-counting quant pioneering Thorp. Can’t wait to get stuck into the book.

    Also, the tea’s nice here in the Pavilion, eh, no need for all of us to go out to bat every time. 🙂

  • 50 The Investor February 5, 2017, 2:16 pm

    @Hannah — Well, FWIW I don’t think people are being hugely greedy in terms of over-valuations at the moment, especially not outside of the US. But generally outside of the obvious extremes such things are as you know very hard to judge. For example people have been calling the US clearly overvalued and to be avoided in comments on this website since at least 2012. They might yet be proved right, who know, but in the meantime the worst of these calls missed the US market rising by 70%+ in just the past five years alone.

    These articles may be of interest, if you missed them:



    I was wrong about the Leave vote having an immediate impact on the economy. Like most observers I expected the uncertainty to cause a hit, especially to consumer confidence and investment. We’ve seen a little of the latter but consumer spending has actually boomed (perhaps because the slim majority voted for Brexit, and are thus feeling happier about their prospects after a Leave win). It’s worth noting that savings rates are at lows though, and with inflation picking up this spending boom seems unlikely to last indefinitely.

    So anyway, if we do eventually see a Brexit shock, perhaps if we do formally Brexit under unfavourable terms, this article might yet come in handy:


  • 51 Mathmo February 5, 2017, 4:41 pm

    @TI Indeed. Fascinating chap. Always split aces and eights. Cucumber sandwich?

  • 52 Leave Voter February 5, 2017, 7:34 pm

    I have enjoyed reading this page in the past, but have deleted it off my favourites and won’t be returning to read the rants of a mad man, I’ve never read so much bitterness and anger in one post. If you don’t like democracy perhaps you should go and live in China or North Korea.

  • 53 The Investor February 5, 2017, 7:55 pm

    @all — I usually delete the sort of post above written by @LeaveVoter, but I thought I’d put one up for everyone’s insight. It pairs nicely with this emailed response from a reader I just read:

    Love your site have learned so much, but surprised with all your knowledge to find that you favor EU above freedom, who in there right mind would rather jump on to a sinking vessel already overloaded with thieves fiddlers and worse, when they have a chance to restore a proud nation millions have died for?

    As everyone who has been around for a while would expect, I will continue to post about politics when I feel like it. I had Leave voters tell me to “get over it and move on” *one week* after the Referendum.

    In the real world, that is not how politics or indeed society works. It’s a constant discussion, even a struggle for some (e.g. racial equality in the 1960s) punctuated with occasional landmarks, elections, and whatnot.

    We’re only in the foothills of the return of nasty populism. Hopefully it will burn itself out and the worst fears will retrospectively seem like paranoia. If it does go with a whimper it will partly be because people resisted it, and spoke out. Over three million people a year visit this site. I obviously can’t change anything but adding my own modest and no doubt bumbling contributions to the mix might help.

    As I said — apparently defensively, I was aiming for empathy — I understand some people might not like these occasional political updates. It’s a free world, and there’s a big Internet out there.

    I do appreciate that many readers clearly care enough about the site to share the concerns, here or on email — even or perhaps especially when they disagree with me. That’s sort of humbling. I don’t appreciate it when people try to shut down a conversation on my own website because they don’t like hearing contrary views. Back to The Telegraph comments with that sort.

    I have lost a chunk of readers by expressing my views on Brexit. In many (clearly not all, see above) that’s a shame. But I’m not going to self-censor to get a few hundred more page impressions a month. Pfft.

    We’re only in the foothills of this return of nasty populism, and hopefully it will burn itself out. If it does it will partly be because people resisted it. If it doesn’t, I don’t want to look back and wonder why I didn’t say anything.

    As usual with most of the Brexit posts, closing the comments now we’re at the end of the weekend. Thanks to nearly everyone for their contributions. Back to investing on Tuesday!