Well that is a fine mess you got us into

Jesus Wept. I mean, the whole Brexit thing is unreal in its perfect realisation slapstick, fine balance and pure frustration.

So May wins a vote, close enough to a victory that she can engage in her airport fever as per Nick Drew's insightful post of yesterday. But weak enough to know that we are merely at Chapter X in the book with quite a few pages left yet.

With over 100 votes against her she is deep in the well of misfortune. Even if half of those think 'OK, will of the party, let's back her now' the rest won't. So she is 50 votes short in Parliament for her deal. Plus the DUP still hold the golden ticket and are in no mood to play nice, never have been have they? Labour are run by commie nutjobs who won't act in the national interest when they are in Government, let alone when they are the opposition.

So her deal, with minor tweaks for Europe is dead. How have the MP's, who disagree with the deal which is her only policy, voted her back in? Madness, but then, we know this now. Brexit has driven the political and media class insane with anger, rage and confusion.


So the deal dies, we then either somehow tick out to a managed hard Brexit for which the rebels in Parliament may be able to defeat (oh, that will be fun with Soubry and et al voting with Labour etc). Or May conspires to create a BINO with Labour in return for an election (she said she would not do this last night, so unlikely if not impossible). Or after the 'Deal' fails in Parliament May delays article 50 somehow and orders a new referendum (Deal or Remain - the EU will only extend if their preferred option is on the Ballot paper).


All with the Maybot in charge, thinking only of kicking the can until next week, with no vision or strategy anywhere to be seen and a dearth of quality advisors in her Cabinet and party.


A fine mess indeed.

Oh Lord...yet another referendum!

Could it be true?


So far thanks to Brexit the UK has done really rather well, exports have grown, jobs increased, GDP grown, new friendship found with the US President, the Labour party destroyed and Cameron and Osborne de-throned in the nick of time.


Against this are some downside possibilities in the future, but the full furore of Remain side in the campaign has looked very poor.


However today, Nicola Sturgeon has, as entirely expected, pressed the button on a new independence referendum for Scotland to be held in 2018 or 2019. It will be hard for a Westminster government to refuse this given the mandate from the Scottish Parliament that will come down.


So, we really could end up getting rid of Scotland. Here was me thinking that hope had gone after 2014, but no, the fruit of Brexit is ripe and plentiful. The Scots can vote themselves independence in the EU and enjoy the bounteous Euro, unlimited Romanian immigration and other splendid and wonderful things that the EU brings to its member.


The Scots will vote to leave the UK just as their economy topples down from its petro-based fuel to something all the less interesting. It may even do us a favour as Banks could potentially passport into the Euro area via their already existing Scottish branches, without the need to go to Luxembourg (though they will go for the tax-free status in all likelihood).


The only downside is that these referendums are very consuming of media time and popular angst. First Minister Sturgeon has also not noticed that the side expected to win has not had much luck of late....

An EU Referendum Classic

Back in action properly in a day or so.  Meantime it's hard not to LOL at yesterday's classic RichardNorthism on the subject of some recent interview of Nigel Lawson.  Headed The Limits to Tolerance (!), it includes this:

the arrogant, malign fool that is Lawson had not even finished in his attempt to destroy the campaign. Asked about border controls in Ireland, the idiot told Marr that border checks would have to be resumed. If there could possibly be a more sensitive subject, I would like to know what it is. In one fell swoop, Lawson has just wiped out the Northern Ireland "leave" vote. And what is especially galling on this is that I personally have spent several weeks researching this issue and crafting a sensible "line to take"

... here we have this man, in a matter of seconds, destroy hundreds of hours of work, setting back carefully crafted arguments and possibly wiping out the entire Northern Ireland vote... exactly an example of what I've been complaining about. From a personal perspective, I simply cannot be expected to work hour after hour, week after week – as I have done for years – only to have my efforts destroyed in seconds by idiots such as Lawson, and stay mute. That is the point which so many of my critics seem to miss.

A passage like this could be from one of Craig Brown's brilliant parodies.  Or, sadly, from a clinical textbook.  Laugh?  Actually I nearly wept for the poor man.

ND

The "O'crapalypse"

It's really hard to see how Greece can stay in the Eurozone and even the EU from here on in:

1. There is only around €500 million of cash in Greek banks  and even with allowances of €60 euros per person that is only 1 days supply left.

2. The ECB is not a political unit and Draghi hates being seen as partisan so it will not do anything ahead of agreement by the EU leaders.

3. The EU leaders are not meeting until tomorrow - so good luck in Greece trying to live for at least 48 hours with no money.

4. The IMF loans are sub-ordinate to the EU ones and the Greeks have defaulted anyway.

Basically, by the middle of this week Greece will have no money left, let alone trying to pay €3.5 billion in a couple of weeks time to the EU.

So, even if the Euro leaders try hard - which initial reactions suggest they are not minded too anyway, the chances are that Greece will have to issue its own scrip sometime this week in order to keep any semblance of the economy going. Medicines and food are running low with the Banks shut - the Country maybe struggling but ordinary Greeks can afford to buy goods - it is the EU via the ECB that is creating an artificial shortage.

As I have maintained for years, the sooner they do this, bite the bullet of a hefty devaluation and get on with it the better - The Country will be a much better place in 3 years, versus the 7 years of disaster that have accompanied trying to pay the debts.

As for the Eurozone, ECB and all that - there is nothing positive to be said at all. The actions to create the crisis in Greece are sickening, the lack of vision and judgement to design an easy path to exit or a parallel 'soft euro' for Italy, Spain and Portugal too is pathetic. The UK can also see clearly where attempts to negotiate or change the will of Germany get you - nowhere and worse.

The sooner we can leave the better, when is that Referendum?

Scots win Independence, delayed by one year to 2017

If Cameron now wins the election narrowly in 2015, as is possible, there will be an EU Referendum in 2017. England will vote for withdrawal and Scotland will not. Scotland will then demand to be 'free' within the EU (oh, the irony) and the devolved Parliament will demand it.

Chances of happening, not that low really, 8-1 perhaps?

Prospect of is already Independent Scotland already boosting the UK economy as a whole

The Pound has dropped to a low of $1.61 to the Dollar - its lowest for 3 months. it year low is at £1.57 so it is well on the way to being at this level or better with just 10 days until the Scottish referendum result.

The Scottish referendum is the gift that keeps on giving, not only may the UK soon be shot of its Socialist extremists, but also the 20% over value of the Pound (its trade weight is currently 83 against a basket of currencies, this implies a near 20% over-valuation) will come off.

This will cause imports to be more expensive and so drive inflation, but at the same time will help an export sector that has run into a wall in 2014 in the face of an over-expensive currency rate driven not by fundamentals but by the choice of the Pound as a safe haven currency.

Perhaps the loss of Scotland will permanently diminish the Pound (I doubt it really, Scotland is 8% of the economy at most) as a reserve currency. This would have good benefits for the economy with almost no downsides - those only being that larger corporate transactions would have to move to dollars or euro's, but not matter. The status of long-dated gilts will in reality underpin Sterling's utility for decades to come.

Moreover, the FTSE is harmed by the earnings of so many of its companies being in dollars which is then reflected into poor returns due to currency exchange. The move down of the Pound will improve the overall PE ratio of the FTSE. Of course a high priced FTSE will lose some lustre too in the run up to the referendum.

We can only hope this continues and the whole show is not ruined by a 'No' vote in the election on the 19th September which will return us to the status quo position and represent a significant detrimental adjustment.

CU

The Scottish Currency Union delusion

With the momentum strongly with the Yes campaign, Scotland could be hurtling towards independence. Certainly the passions North of the Border have been aroused and the vote may well get close to 80% turnout. On that basis it would seem more likely that Yes might just squeak a win.

In trying to defend the status quo, the political party leaders at Westminster have been determined to say that under no circumstances will there be a full currency Union. It has been a great tool for the campaign, as it focus' on the heads and not the hearts. The Heart felt vote will always be for an Independent nation, as its is more aspirational than more of the same.

However, why, as a person living in Southern England, do we care if there is a Currency Union. Scotland demands a seat at the Bank of England as its price. Fine, let is have one - after all the MPC is a vote of 12, Scotland having one is about right in terms of economic contribution. Scotland will not dictate the votes on interest rates.

Scotland too would have to sign up to strictures around public spending, Tory ones in times of a Tory Government and Labour ones in times of a Labour Government. That means they would have limited impact on their macro spending.

So in effect, nothing would really change economically for the Scots or have any real impact on the UK as it remained.

Currency Union does not really hold any big bad macro effects, except if Scotland went off the rails and tried to print its own money etc - something that even Greece could not do. Plus over time, the Scots would issue their own debt and so would have the markets act directly to help persuade a Scots Government of the nature of debt and spending.

As such, I think all the Westminster MP's are lying and in the end if the vote is Yes then the likelihood is there will be a Currency Union - not having one is unnecessarily spiteful and also probably against the terms of the treaty signed when the referendum was first agreed to.

Without a Currency Union the Scots economy faces a very uncertain and bleak future, that much is true.

SNP trash the Treasury

It's come to a pretty pass when the Treasury is releasing statistics to assist the referendum debate and they are trashed by their own author within a few minutes.

But it did happen today, and I feel conspiracy at work here. At last the Government is coming to terms with the Yes vote improving and deciding that it likes what it sees - which would be the end of Labour as a Government in England, especially with a surging UKIP to challenge them.

With this in mind, the effort to persuade Scottish voters to stay in the Union is half-hearted. I would rather hope this was the case in any event, rather than believe the Treasury is utterly incompetent.

Scots win in Govan at English expense

One of the good side effects if your a Scottish worker or politician is that having a referendum on independence next year means you have lots of political leverage now. BAE, a private company but with the closest links to the Government of any private company, will no doubt have an ear out for what Downing Street and the mandarins would want.

In this case it won't be too hard to guess, with a downgrade in the need of naval building capability obviously needed after the aircraft carriers are built, there have to be some job losses. The choice is between the shipyards of the Clyde or Liberal Democrat Portsmouth. I pity the people of Portsmouth who deserve better than to be shafted to prevent Alex Salmond smiling, but that is what will happen.

One of the problems of the referendum is that anything done now to upset the Scots can be played as 'forcing' independence. In fact anything at all, a Tory or Labour win in the Eu elections, closures of shipyards, infrastructure projects funded or not funded.

It's called in other way being held to ransom; like the bad marriage where one party constantly misbehaves and then threatens to leave all the time anyway. As we would advise our friends, the only sensible thing to do is tell the mis-behaving party to get knotted and get one with the bitter divorce.