EU Referendum

[armistice]

Yesterday the BBC reported http://www.bbc.co.uk/news/business-36462345 drops in the pound/USD as a major news story, showing how the chance of a brexit vote was weighing on the exchange rate.
In reality it was a small fall of approx 0.5%. I've been following the rate for an upcoming holiday and is no different to the rises and falls over the previous few months.
Today the exchange rate is up 0.5% already, are they going to report that (I wont hold my breath).

 

[Mark84]

They think it is nothing to do with the fed Chairman saying that she didn't think rates would rise this month. Last weeks drop in the pound was due more to poor jobs data from the states.

It's not the fact that the BBC don't think it is related, it's the fact that they don't even suggest the drop of the pound / rise of the pound is linked to the FED rates or US jobs data and is now only effected by Brexit.

 

[Edwin]

There's a huge difference between distrusting a particular expert, and distrusting ALL experts. The former is healthy scepticism, the latter is head in the sand denial.

Anyway, I'm looking forward to learning specifics of the Leave camp argument tonight from Nigel Farage. As an MEP, he's had first-hand experience of the European Parliament.

 

[monaghan]

There's a huge difference between distrusting a particular expert, and distrusting ALL experts. The former is healthy scepticism, the latter is head in the sand denial.

The problem in this case is that the majority of us no not know sufficient to know which are real experts and which are making it up combine that with the distrust of politicians and in reality nobody really knows the detail of what is happening and therefore will believe the message that most appeals to their own prejudices rather than making a decision on actual facts.

If one "expert" says we're better leaving and another "expert" says we're better off staying then how is the man in the street expected to know who is right?

 

[Edwin]

True. But when several hundred experts (economists) fall into the Remain camp, and 8 put their name to a letter supporting Leave, there's a dominance of opinion that would on the face of it seem hard to deny.

 

[RobM]

It's sickening how certain areas claim the pound movement is an indicator of how things will be *after* the vote. It's clearly a period of indecision tending towards the positive.

We can see the daily upward trend for the pound against the dollar. This in no way means it will continue but if the media is harking on about it they should mention how strong it is compared to it's low point in Feb, mention it's general trending up, mention how much stronger it is SINCE YESTERDAY. But no that kind of story isn't scary.

 

[gimpydog]

You obviously have me confused with dozens of financial journalists and historians. I didn't write those quotes, I just linked to them. And there are many more where they came from.

Well at least stand by your sources. Lets see an asterisk next to John Major's name too.

The obvious parallel is the humiliation of Black Wednesday on September 16, 1992, when John Major and Norman Lamont were forced to take the pound out of the European Exchange Rate Mechanism — a system designed to limit fluctuations in value between European currencies.

All I think about is the facts: He was on the losing side of the most profitable forex trade of all time, and spent so much of the UK's reserves that the true figure was buried for years and the government went to court to stop its publication.

About £3 billion wasn't it? A third of an Olympics & about what we send to the EU every two months.

BTW, It wasn't about a big forex trade, it was the pre-cursor to monetary union. Tying our currency to the German economy.

How did that work out in Greece?, in Portugal?, in Ireland?, in Spain?, in Italy?.....

 

[websaway]

The problem in this case is that the majority of us no not know sufficient to know which are real experts and which are making it up combine that with the distrust of politicians and in reality nobody really knows the detail of what is happening and therefore will believe the message that most appeals to their own prejudices rather than making a decision on actual facts.

If one "expert" says we're better leaving and another "expert" says we're better off staying then how is the man in the street expected to know who is right?

An expert is often someone who is good at passing exams and gets a degree in economics. In the real financial world they don't know their r's from their elbow but certainly know how to explain why they did not really get it wrong after the event.

 

[disruptive]

All economists predictions are only as good as the assumptions they use. Given the fact that one can get to many varied outcomes with different assumptions, that leaves these professionals open to how they ascertain their assumptions in the first place and therefore what "camp" they come from in the first place.

 

[bonusmedia]

It's sickening how certain areas claim the pound movement is an indicator of how things will be *after* the vote. It's clearly a period of indecision tending towards the positive.

I agree that the reporting of this has been misleading.

It's certainly volatile but a trend towards the positive could simply be interpreted as the market viewing Brexit as unlikely. Remember the bookies odds are still fairly strongly in favour of Remain, despite the vast majority of bets being for Brexit for the last several weeks. That suggests the big/smart money is on Remain.

For example, HSBC have modelled a 20% fall in GBP against USD on Brexit - they are not alone.
Hedge funds are doing their own polls and are fairly highly skilled at analysing risk.

I'd suggest that if polls continue this trend, GBP will fall in the run-up to the vote, since the potential downside looks greater than the potential upside.

 

[bonusmedia]

An expert is often someone who is good at passing exams and gets a degree in economics. In the real financial world they don't know their r's from their elbow but certainly know how to explain why they did not really get it wrong after the event.

That's not really fair. There were obviously some major failings (largely down to poor regulation) but that doesn't mean the entire sector are idiots.

We have the biggest financial centre in the world and financial services are a massive part of our economy. The vast majority of people in finance are conscientious and hard working. Finance makes the world go round - you probably wouldn't own a house without it. Many of the brightest people we have are in economics.

You don't seem to mind experts who agree with you...

 

[Edwin]

Very last reminder: deadline to register to vote is TONIGHT.
https://www.gov.uk/register-to-vote

 

[Edwin]

This referendum campaign is full of surprises. Polly Toynbee has written an article that I agree with (from memory, that's the first time ever!)
http://www.theguardian.com/commentisfree/2016/jun/07/brexiters-leave-remain-labour

 

[RobM]

I agree that the reporting of this has been misleading.

It's certainly volatile but a trend towards the positive could simply be interpreted as the market viewing Brexit as unlikely. Remember the bookies odds are still fairly strongly in favour of Remain, despite the vast majority of bets being for Brexit for the last several weeks. That suggests the big/smart money is on Remain.

For example, HSBC have modelled a 20% fall in GBP against USD on Brexit - they are not alone.
Hedge funds are doing their own polls and are fairly highly skilled at analysing risk.

I'd suggest that if polls continue this trend, GBP will fall in the run-up to the vote, since the potential downside looks greater than the potential upside.

Agreed. So the *current* strength and *previous* strengths have no bearing on the *future* strength. So why does the media only portray this as important when it backs up their stance but ignore it when it doesn't? That's what's sickening.

 

[websaway]

True. But when several hundred experts (economists) fall into the Remain camp, and 8 put their name to a letter supporting Leave, there's a dominance of opinion that would on the face of it seem hard to deny.

Unless you look at self interest and mostly who's paying the piper.

 

[websaway]

That's not really fair. There were obviously some major failings (largely down to poor regulation) but that doesn't mean the entire sector are idiots.

We have the biggest financial centre in the world and financial services are a massive part of our economy. The vast majority of people in finance are conscientious and hard working. Finance makes the world go round - you probably wouldn't own a house without it. Many of the brightest people we have are in economics.

You don't seem to mind experts who agree with you...

Touche

 

[Edwin]

On the economics front, it's worth noting that comparisons with the 2008 financial crisis are potentially misleading because there's a world of difference between something triggered by dodgy dealings in the back rooms of large banks and a referendum that is happening on a specific, known-in-advance date and is therefore much more readily predictable.

In other words, economists don't have to simulate some vague future "thing" but a very specific scenario happening on a particular day.

 

[websaway]

I don't mind a multicultural society. I certainly like foreign people. But I would rather be poor than be a minority in my own country.

 

[Edwin]

I don't mind a multicultural society. I certainly like foreign people. But I would rather be poor than be a minority in my own country.

For clarity, does that mean you've accepted the overwhelming number of predictions that suggest Britain will be poorer post-Brexit? But for you, other considerations trump that?

 

[websaway]

For clarity, does that mean you've accepted the overwhelming number of predictions that suggest Britain will be poorer post-Brexit? But for you, other considerations trump that?

I think the predictions are overwhelmingly motivated by self interest and that self interest ignores the realities of immigration and national sovereignty. But that is human nature, especially where money and position are concerned. And what exactly do you mean by Britain will be poorer, what value do you place on freedom.