The economic consequences of Brexit (Vol 2)

[Tuna]

AC43 said:

Although to draw a real parallel we haven't seen the full effect yet. The day we leave the EU will be the equivalent of the day we withdrew from the ERM.

You think we should have stayed in?

[Digga]

AC43 said:

Although to draw a real parallel we haven't seen the full effect yet. The day we leave the EU will be the equivalent of the day we withdrew from the ERM.

I'm not sure that is an accurate parallel. The two events are significantly and fundamentally different in nature; the ERM was a shock and a very rapidly developing event, Brexit, on the other had - of the sale of all participants - is being handled on a longer and more controlled timeline. Surely much of the 'downside' in markets is already baked in and will only alter as more details of the final deal filter through?

[CaptainSlow]

kurt535 said:

not sure if this has been seen by anyone and am unsure whether ft is pro or anti leave.

https://ig.ft.com/sites/brexit-companies/

FT is obviously anti leave, however, the summary it has published appears to show more positive news to negative. 54 Financial Gains to 15 Profit Warnings. Many of 28 Jobs reports are actually relating to stories of no change or improvements.

[AC43]

jsf said:

AC43 said:

The conditions feel a bit similar to the run up to 92 (when I was last made redundant).

in 2008, however, I was balls deep in debt, building my first proper development and the crisis was terrifiying. Clung on through that, just. Also got made redundant

Make your mind up.

In 92 I got made redundant and ended up out of job.

Next time I was made redundant I managed to secure a different job at the last minute.

To be more technical it's your role that gets made redundant. Your employer may or may not have other roles available that you or theu believe to be a fit.

Never been through it, I assume.

I have, three times now (almost fout but I was spared that one).

If you call it four that's once every economic cycle which is about right for a relatively high risk type of role.

[AC43]

wc98 said:

it is never nice to lose your job, i hope you get sorted soon and glad to hear it is not a major issue for you. a bit of advice that was apparently popular back in the day in similar circumstances https://www.youtube.com/watch?v=sU_pDM1N7i0

LOL. When he said that I was outraged. Five years later I got on my bike and headed off for London which the best thing I have ever done.

There seems to be a hell of a lot of moaning going on outside London these days which seems a bit pointless to me. But it's the way of the world now.

[AC43]

Tuna said:

AC43 said:

Although to draw a real parallel we haven't seen the full effect yet. The day we leave the EU will be the equivalent of the day we withdrew from the ERM.

You think we should have stayed in?

Yes (on balance) I do.

EDIT; I mean the EU not the ERM!

Edited by AC43 on Friday 20th January 11:52

[AC43]

Digga said:

AC43 said:

Although to draw a real parallel we haven't seen the full effect yet. The day we leave the EU will be the equivalent of the day we withdrew from the ERM.

I'm not sure that is an accurate parallel. The two events are significantly and fundamentally different in nature; the ERM was a shock and a very rapidly developing event, Brexit, on the other had - of the sale of all participants - is being handled on a longer and more controlled timeline. Surely much of the 'downside' in markets is already baked in and will only alter as more details of the final deal filter through?

Fair points. Yes the ERM exit was an utter train crash.

Let's hope you're right and that this one doesn't go the same way.

[Digga]

AC43 said:

Tuna said:

AC43 said:

Although to draw a real parallel we haven't seen the full effect yet. The day we leave the EU will be the equivalent of the day we withdrew from the ERM.

You think we should have stayed in?

Yes (on balance) I do.

But when you read back on the subject, the question has to be how?! We were literally between a rock and a hard place - the government had not ammunition to maintain the peg and the Germans were none to keen on allowing us to renegotiate at another level IIRC.

[Carl_Manchester]

kurt535 said:

Your generalisation is quite a normal, widespread held belief; but I really don't know one pal who gets paid for losing money; not one. Some of them have now been in the chair since 1987.

I'd also add the term 'bankers' is so wide of the descriptive mark of the collective financial services of this country it's really surprising how unknowledgable so many are how we raise a massive amount of tax receipts.

Kurt, you should not see my views as some sort of witch hunt against the banking industry, I am merely highlighting that there is a structural problem with European banks and high pay levels. I also have the same view for a large amount of fund/asset managers.

I think you are confusing the issue of return on shareholder value with tax receipts, I am not challenging that banks pay lots of money to employees, I am challenging that in terms of this model, it is and never was sustainable for shareholders of the European banks.

In the main the current problems are simply due to a collapse on margins, low volatility linked to high un-sustainable high pay levels.

A measurement (not the only one) on how financially successful a business model is on a listed company is the historic share-price and its return to share-holders over a long-term period.

You say you don't get paid well for failure, actually if you work at a european bank or asset or fund manager, the chances are you do and, you will because the share-holder and fund investor pay the bill.

[stongle]

And Davos says.....

"Bank Execs in Davos Privately Say London Clearing Probably Safe"

Its on Bloomberg.

London will probably end up winning the battle over its clearing industry, according to four top bankers in Davos, adding to the debate over whether the U.K.’s financial industry will be stripped of a crown jewel....

Despite French and German threats to claw away clearing in euro-denominated derivatives, Britain will probably continue to house trillions of euros of swaps trades because limiting where the operations can take place could backfire......

The basic reason given is systemic risk.

Sure its subjective, but there is a increasing consensus shift going on. Still expect France to go for a punch up on this one though.

[Digga]

stongle said:

And Davos says.....

"Bank Execs in Davos Privately Say London Clearing Probably Safe"

Its on Bloomberg.

London will probably end up winning the battle over its clearing industry, according to four top bankers in Davos, adding to the debate over whether the U.K.’s financial industry will be stripped of a crown jewel....

Despite French and German threats to claw away clearing in euro-denominated derivatives, Britain will probably continue to house trillions of euros of swaps trades because limiting where the operations can take place could backfire......

The basic reason given is systemic risk.

Sure its subjective, but there is a increasing consensus shift going on. Still expect France to go for a punch up on this one though.

Sadiq Kahn made a very cleverly calculated statement last night; that any impact Brexit has on the FS in London would not only be bad for the UK but also the EU, because any shift from London would not be likely to benefit Frankfurt or Paris, but be far, far more likely to benefit Hong Kong or Shanghai or other non-EU financial centres. I think he was not far wrong.

The EU need to think extremely carefully about this.

Edited by Digga on Friday 20th January 12:06

[AC43]

Digga said:

AC43 said:

Tuna said:

AC43 said:

Although to draw a real parallel we haven't seen the full effect yet. The day we leave the EU will be the equivalent of the day we withdrew from the ERM.

You think we should have stayed in?

Yes (on balance) I do.

But when you read back on the subject, the question has to be how?! We were literally between a rock and a hard place - the government had not ammunition to maintain the peg and the Germans were none to keen on allowing us to renegotiate at another level IIRC.

Sorry; meant the EU not the ERM. The UK experience of the ERM was a fiasco start to finish as we went in at far too high a rate in the first place so that was always going to end in tears. It was a political decision to go in at that time - the fact that rate was nuts was just ignored

I did think the project as a whole was a good idea at the time, though. Now I've seen what's happened with the EZ I've done a 180 on that.

As I say on the current EU debate other opinions are always available. Sometimes from me.

[Murph7355]

stongle said:

...

Sure its subjective, but there is a increasing consensus shift going on. ...

In the last couple of weeks it's seemed increasingly like this in a host of areas to me. Various outlets and Remain proponents softening on their messages.

Even //ajd posted some positive news recently!

And we've not even got going yet.

[Garvin]

Greg66 said:

Garvin said:

Lancaster House and Davos speeches appear to have gone down well, even with European leaders,

Kool aid overdose?

Not at all. I half expected some rantings from the EU officials and perhaps some severe push back from the European leaders but even, yes even, the BBC seem to be reporting positively with the odd response being OK e.g. Poland's head honcho.

However, you have obviously seen some response that is significantly negative so please point me in the right direction to correct my misconception.

[Mrr T]

stongle said:

And Davos says.....

"Bank Execs in Davos Privately Say London Clearing Probably Safe"

Its on Bloomberg.

London will probably end up winning the battle over its clearing industry, according to four top bankers in Davos, adding to the debate over whether the U.K.’s financial industry will be stripped of a crown jewel....

Despite French and German threats to claw away clearing in euro-denominated derivatives, Britain will probably continue to house trillions of euros of swaps trades because limiting where the operations can take place could backfire......

The basic reason given is systemic risk.

Sure its subjective, but there is a increasing consensus shift going on. Still expect France to go for a punch up on this one though.

I assume you are referring to clearing euro denominated cash/FX derivatives in the UK. This is a tiny part of the FS market.

As for it remaining in the UK if the UK leave the SM they are mad. I quite understand why the ECB wanted based in a EZ country but lost at the ECJ. So we can assume it will be closed within a year. Only a few hundred jobs but they will be part of many more.

[Mrr T]

Digga said:

Sadiq Kahn made a very cleverly calculated statement last night; that any impact Brexit has on the FS in London would not only be bad for the UK but also the EU, because any shift from London would not be likely to benefit Frankfurt or Paris, but be far, far more likely to benefit Hong Kong or Shanghai or other non-EU financial centres. I think he was not far wrong.

The EU need to think extremely carefully about this.

Edited by Digga on Friday 20th January 12:06

So explain to me how a FS sales person based in HK, Shanghai or NY can sell a FS product to a buyer in the EU without committing a criminal offence?

[Digga]

Mrr T said:

Digga said:

Sadiq Kahn made a very cleverly calculated statement last night; that any impact Brexit has on the FS in London would not only be bad for the UK but also the EU, because any shift from London would not be likely to benefit Frankfurt or Paris, but be far, far more likely to benefit Hong Kong or Shanghai or other non-EU financial centres. I think he was not far wrong.

The EU need to think extremely carefully about this.

Edited by Digga on Friday 20th January 12:06

So explain to me how a FS sales person based in HK, Shanghai or NY can sell a FS product to a buyer in the EU without committing a criminal offence?

I think the bigger question is whether, or not, the EU think is actually so important?

[anonymous-user]

AC43 said:

jsf said:

AC43 said:

The conditions feel a bit similar to the run up to 92 (when I was last made redundant).

in 2008, however, I was balls deep in debt, building my first proper development and the crisis was terrifiying. Clung on through that, just. Also got made redundant

Make your mind up.

In 92 I got made redundant and ended up out of job.

Next time I was made redundant I managed to secure a different job at the last minute.

To be more technical it's your role that gets made redundant. Your employer may or may not have other roles available that you or theu believe to be a fit.

Never been through it, I assume.

I have, three times now (almost fout but I was spared that one).

If you call it four that's once every economic cycle which is about right for a relatively high risk type of role.

You assume incorrectly.

I used to manage a team of Oracle DBA's when I worked in IT, in 2002 the company decided they needed to cut their staff levels and told me I had to make 50% of my team redundant.

My team was one of the profitable parts of the business and we were always very busy, I didn't see the need for the loss and more to the point I didn't see how we could provide a good service to the clients going forward with such a cut.

So I chose who would lose their job and put in for voluntary redundancy, making myself redundant.

I left the business with a good severance package as I had been there a long time, they didn't want me to go as they wanted the less time served staff to go first, but under the company wide terms they couldn't refuse me.

I spent the next 2 years travelling the world whilst I decided whether I wanted to continue to work in IT or do something else. I chose to do something else.

The company ended up being bought out by its competitor, that collapsed in a financial scandal 5 years later with the Chairman, Chief executive and company accountant being jailed for conspiracy to defraud the shareholders.

[paulrockliffe]

Digga said:

The EU need to think extremely carefully about this.

Edited by Digga on Friday 20th January 12:06

I've spotted the issue....

[AC43]

jsf said:

AC43 said:

jsf said:

AC43 said:

The conditions feel a bit similar to the run up to 92 (when I was last made redundant).

in 2008, however, I was balls deep in debt, building my first proper development and the crisis was terrifiying. Clung on through that, just. Also got made redundant

Make your mind up.

In 92 I got made redundant and ended up out of job.

Next time I was made redundant I managed to secure a different job at the last minute.

To be more technical it's your role that gets made redundant. Your employer may or may not have other roles available that you or theu believe to be a fit.

Never been through it, I assume.

I have, three times now (almost fout but I was spared that one).

If you call it four that's once every economic cycle which is about right for a relatively high risk type of role.

You assume incorrectly.

I used to manage a team of Oracle DBA's when I worked in IT, in 2002 the company decided they needed to cut their staff levels and told me I had to make 50% of my team redundant.

My team was one of the profitable parts of the business and we were always very busy, I didn't see the need for the loss and more to the point I didn't see how we could provide a good service to the clients going forward with such a cut.

So I chose who would lose their job and put in for voluntary redundancy, making myself redundant.

I left the business with a good severance package as I had been there a long time, they didn't want me to go as they wanted the less time served staff to go first, but under the company wide terms they couldn't refuse me.

I spent the next 2 years travelling the world whilst I decided whether I wanted to continue to work in IT or do something else. I chose to do something else.

The company ended up being bought out by its competitor, that collapsed in a financial scandal 5 years later with the Chairman, Chief executive and company accountant being jailed for conspiracy to defraud the shareholders.

Fair do's; you obviously know what you're talking about.

I'm not treating it as a traumatic event. I may find another role I want to do. I may take the package and enjoy a short career break. Pros and cons for each option.

And by the way I'm not saying "Brexit killed my job".

It's just a contributory factor here in London where there's a lot of uncertainty.

It didn't in isolation kill the top end property market last year either. It just administered the fatal injection at the end.