The British pound surged nearly 3% today after UK Prime minister Theresa May added clarity to the Brexit decision. “No deal for Britain is better than a bad deal for Britain,” sad May.
Currency traders were convinced a hard Brexit would kill the pound, instead it rallied. And the decline in the US dollar index, widely attributed to Trump statements, has at least as much to do with May statements.
Regardless, the UK is striking the right tone at last.
Blueprint For Brexit
- “We are leaving the EU, but we are not leaving Europe.”
- “No deal for Britain is better than a bad deal for Britain.”
- British citizens voted “with their eyes open.”
- “We will get control over number of people coming to Britain from the EU.”
- “You cannot control immigration overall when there is free movement from Europe.”
- “We do not seek to adopt a model already enjoyed by other countries.”
Clean, Clear, Concise, Correct
May’s blueprint depicts 4 Cs: clean, clear, concise, and correct. Some whiners don’t see it that way.
Whiner of the day, UK Liberal Democrat leader, Tim Farron, complains in a Guardian Op-Ed, Whether you’re leave or remain, Theresa May just betrayed you on Brexit.
Farron: Today’s speech on Brexit was yet another hopeless attempt by the prime minister to mask the fact that the government has absolutely no strategy when it comes to the most defining issue facing our country for decades.
Mish: The plan was quite clear. And so is the strategy. “No deal is better than a bad deal.” Since the EU insists article 50 must be triggered before they “negotiate”, the best May can do is set the tone. And that she did.
Farron: May has decided – before she has even entered into negotiations with the EU – that the only decisive act of her premiership will be to tear the UK out of the single market.
Mish: At best, that is a disingenuous pile of garbage. At worst, a willing pack of lies. It is the EU’s insistence that the UK get a bad deal and must abide by the European Court of Justice that forced May’s hand.
Farron: She has given up on the most important part of the Brexit negotiations at the first hurdle, allowing herself to be taken hostage by those in her party who are the Tory equivalent of Momentum – fundamentalists hell bent on taking their party away from the mainstream.
Mish: Dear Mr. Farron, excuse me for asking: Did Brexit win the vote or not?
Farron: When it comes to British prosperity and British democracy, she is waving the white flag from the White cliffs of Dover. In doing so, she has confirmed that Britain is heading for a hard Brexit. She has made the choice to do massive damage to the British economy.
Mish: That’s two lies bundled in “fake news”. First off, how the hell does Farron know the British economy is headed for “massive damage”? His stating so is another laughable statement in the face of an economy that seems to be doing quite OK. Second, it was not May’s choice. It was the EU’s choice to insist on a hard Brexit to punish the UK.
Farron: Was the vote on the 23 June really a vote to transform our economic model into that of a corporate tax haven, as was threatened this week by the chancellor, Philip Hammond? No, it was not. It is Nigel Farage’s vision of Britain’s relationship with Europe and the rest of the world. A vision that will have an extremely damaging impact on our standing and relationship with our neighbours.
Mish: Now that’s a hoot. For starters, lowering the tax rate is a good idea. Look at Ireland for proof. Secondly, Farron is all concerned about EU “neighbours” that have pledged to make life painful for the UK. Some “neighnours”!
Farron: The new Ukip leader, Paul Nuttall, himself commented that May’s words could have come straight from a Ukip party conference speech.
Mish: When you have nothing of substance to say, you attack a person, instead of the idea they present.
EU Hardball
May is starting to play hardball, as I proposed all along. The UK can lower corporate taxes even more, and say to hell with paying a “Brexit Tax” the nannycrats in the EU insist upon.
On November 29, in response to a EU claim “cards stacked in our favor” I proposed Brexit Stacked Deck? Which Way? Don’t Negotiate, Just Leave!.
That is the underlying threat behind Theresa May’s statement “No Deal Better Than Bad Deal“. And that salvo gives the EU something serious to think about.
White Flags
Farron accused May of “waving a white flag“.
In reality, May properly stood her ground against someone who is a disingenuous demagogue, a free trade illiterate, and a spreader of fake news on the demise of the UK.
It is amusing irony that Farron accuses May of waving a white flag just when she leads the charge.
Mike “Mish” Shedlock
“You cannot control immigration overall when there is free movement from Europe.”
Mish: I’m sorry but whose continuous bombing cause the massive Sirian/Iraq refuge crisis? Let me cue you in: UK and USA. So I find it amusing that the UK is against solving the immigration problem they help create. If I were the EU I would deposit each immigrant at Gibraltar and close the border with Spain so they can’t return. BTW one day rally on the pound does not make a trend. Moreover, I wonder how an strong pound helps the UK trade at all.
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In that regard the refugees should all be settled in the USA. perhaps some in the UK and France, co partners in the crimes in the MENA nations.
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The journalists asking questions at the end of May’s speech should be ashamed. She delivered a clear, thoughtful and optimistic blueprint for UK going forward and these media-muppets still wallow in the past and focus on nitpicking. MSM big time fail, yet again.
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Totally agree. The MSM are suffering a deficit of intelligence.
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You really are a little dim.
This is not a refugee issue, it’s a movement for employment issue as the EU is not creating sufficient employment. Just look at their growth.
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I think you have reading comprehension problems. The immigration issue (refugees) was May’s not mine. I just commented that May’s statement was hypocrisy at its best since UK was a major player in creating it to begin with. Now, please, do tell how losing the EU market is good for UK employment? The reality, is that the UK (and its economy) stopped being relevant (as far as super power status) many many years ago (before the EU) but they still think they are “relevant”. It is sad, it is like the walking dead. They are dead but they still don’t know it….
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I don’t think the UK was responsable for the Syrian war, they have taken a similar stance to Germany and EU, and only marginally more involved.
The UK had empire, like many other countries did, the superpower status is not an absolute but comparative.. industrial superpowers, armed superpowers etc.
So the UK is not relevant to some/many/whoever, I don’t think it has a problem with that and is quite aware of where it is not wanted. Understand something though, you don’t then turn round with a different story – go make your world or EU or whatever without British, we won’t resent your success, we won’t repair or hold together your failure either, we will just look out for our own first and foremost. You should have no problem with that as that is what you are yourselves doing, it just happens not to be in a way to our liking. You won’t blame anyone for their choice before blaming your own, if you understand what I am saying.
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Syria is a fight between the Muslim Brotherhood and Assad
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The real ramifications that will come to light is the debt traded and pledged in London for the EU enterprises. Especially global companies. If the EU attempts to force UK the refinancing of the eurodollar (dollar debt traded outtside USA) debt will be an interesting phenomena. Remember that there is a transaction tax in EU, how would one pay that tax in dollar equivalents to refinance dollar debt if theoretically one were to be cut off from London where most of it trades and links to NY?
Yes I understand there may be pathways here and there but the overall picture can get skewed into an interesting aspect on this issue.
What I find odd is that Germany did not want to smooth out its position to build a coalition that would have some framework after EU collapses. They expect gravitas to reintegrate those around them without lobbying efforts or past entitlements of some sort. There will be a very large disappointing factor once EU comes down, especially in respect whom owes what to whom and where that ownership is…
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In the overall scheme of things, I can hear Hotel California playing in the background.
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Well said, Mish. Your takedown of Farron shows how barren he is, a white anter of UK prospects.
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Unfortunately Farron is my local MP. I’m sure his argument would probably be that it doesn’t matter if he’s out of step with the rest of the world; the rest of the world just needs to change direction. The only positive thing I can say is that as a pro Brexiteer, if I HAD to choose someone to lead the charge for remain, it would be Tim Farron. (Just wish he’d stop littering the landscape with bloody windmills.)
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Clegg is my beef. Never had much of a proper job, went back on student pledges (apologised for it), then led his party to edge of oblivion at elections and STILL people listen to the pratt.
Cameron and Osbourne both invited to speak at Davos, paid for of course.
The EU will start to act up now, port blockages, custom delays etc.
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Cameron and Osborne are rapidly gaining the same ‘patina’ as Blair and Brown – an embarrassment and best put in a drawer somewhere and quietly forgotten. Davis is getting no publicity this year and that suits me just fine. TMayhas quite impressed me so far. I was sceptical to start with but her appeal has grown (which quite bucks the trend).
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Davos not Davis!
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We need a leader, hope she’s got IT.
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I do worry about Sinn Feinn and the prospect of direct rule returning to Northern Ireland though. Could all turn into a nightmare very quickly. That is the thorn in the woodpile in my view. Interesting to see how the government handles that one.
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“Port blockages, customs delays, etc.”
I say “bring it on.” Yes, I know such things are stupid. But the world seems to insist on re-learning history the hard way. If “free trade” means having to take all the inane EU bureaucratic regulations (which actually restrict) along with it, then let the fools who remain in the EU block their ports, enact tariffs, etc. and accelerate the ruin of their economies. That is the only way the thick will ever learn (and some are simply incapable of learning).
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Good post Mish, cannot think of anything to add. The parliamentary vote maybe, but if I understand right that is only the difference between a clean Brexit and a hard Brexit, the latter if anyone tries to delay or fuddle the British position as it signs into Article 50.
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These “currencies” Pound, Dollar, Euro, etc) will all be virtually worthless in less than 10 years.
But have fun trading them in the meantime.
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Worthless relative to what? RMB? Swiss franc?
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Relative to nothing. Once the Dollar fails all fiat currencies will be worthless, more or less simultaneously. The Dollar as the global reserve currency is the de facto gold standard (without any actual, er, gold)
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Article 50 only covers the terms of leaving. Post leaving trade deal is another matter.
Verhofstadt has come out and said the time for the UK to cherry-pick has now ended. I think May told him that today.
Should there be a very large exit fee it will be “see you in court” from the UK.
Ireland and Spain targeted to be net future contributors sooner than previously planned to make up the budget shortfall. Net receivers won’t feel much of a hit.
There was a report to that effect out of the DeLors institute. EU can’t possibly cut back, they are happy to push austerity on others but couldn’t possibly do it to themselves.
Expect a fight.
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It doesn’t matter what Article 50 says — your date just went to the prom with someone else. You have been dumped.
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Good for her
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Summary EU budget impact
http://www.telegraph.co.uk/news/2017/01/17/brexit-will-bring-bitter-eu-budget-wars-report-warns/
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Choice of “slashing EU budgets, a move the reports says would be “devastating” for the EU’s efforts to convince citizens it delivers value.”
Lol.
10bn is peanuts in the bigger picture but will become an event all the same. If you knew how much corruption and wasted spending there is, the type of admin who get funded…local citizens just see a bit of subsidy, sometimes work on a venture…oh and the EU flag appearing on construction billboards all over the place.
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It will be soo much fun when the Brexit has been don and destroyed was is left of the UK:
Export schlager #1 were Financial Services in a freewheeling (=no restrictive laws allowed) one mile zone in the City – just look at recent scandals coming from them. Good riddance to that. Soon UK will look like Cuba – people will driving old cars – sorry shiny new German Golfs will be soo expansive – only the well off can afford them. No problem for the Porsche and Ferrari buyers but they most likely lost their shirts in the crashing London real-estate market.
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So what country are you from then , or are you just being EU?
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In the full calendar year 2015, #1 Toyota globally produced 10.08 million units, some 150,000 vehicles ahead of the 9,930,600 units Volkswagen delivered to customers in the period. (General Motors remains 3rd-ranked with 9.8 million units to its name.)
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If the final “deal” is indeed onerous enough to the City banksters to force UKers to instead do something useful for a living, the EU will indeed have done the UK a favor. There really is no worse catastrophe that can be bestowed upon a society, than saddling it with a “financial center.”
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If the final terms of the “deal” the UK gets from the EU, is indeed so onerous for the City bankster cartel, that it forces UKers to instead have to attempt doing something at least marginally useful for a living, The UK will owe the EU a massive Thank You.
There simply is nothing more destructive one can do to a population, than placing a “financial center” in it’s midst. If the population of the UK can use this shakeup to get out from underneath theirs, it will their most glorious moment since at least Pax Britannica.
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It is refreshing to see the UK being independent again. It has a long tradition of resisting domination by undemocratic European excess’s – the EU being the latest attempt. Though the current ‘Brussel Sprouts’ developed from a genuine intention to unify diverse Countries it has become a vehicle for the exclusive gain of mercantilists unable to give an inch or distribute surplus. The Euro currency is becoming an alternate Deutsche mark so why would any independent Nation want it. Watch France closely, if they have any sense (and they have as a previous global power) they might soon realise that they also will do better with their own currency and freedom to matter on an international front.
Also Globalism is fast becoming redundant as people realise the consequences; the European Union has become just another way of wedging that failed philosophy to the benefit of the 0.001% rent seekers, partly by crushing peripheral producers with legislation to preserve privilege.
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The EU in reality does not really have a great hand, as their house is in shambles, with many wanting to get out. The one market stick with which they are beating the UK may no longer exist especially if Le Pen wins. It is time someone calls their bluff. May May continue in this vein.
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Mish I could not agree with you more. I have no idea how these critics of Mays approach think harping on about the migrants and who is responsible has anything to do with the Brexit approach. A lot of muddled thinking going on.
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Hard Brexit is better than harder Brexit, and by harder I mean one with a bad deal.
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