UK Referendum Thread [Moderator Sanctioned]

[Vassenor]

I want your appraisal of the general claim of "BoE predicts 50/50 chance of recession resulting from Brexit fallout".

Please link to the story reporting the Bank of England predicting a 50% chance of recession.

https://www.theguardian.com/business/20 ... exit-slump

http://www.ibtimes.co.uk/uk-economy-fac ... sr-1573961

http://www.bbc.co.uk/news/business-36953247

[HMS Vanguard]

Please link to the story reporting the Bank of England predicting a 50% chance of recession.

https://www.theguardian.com/business/20 ... exit-slump

http://www.ibtimes.co.uk/uk-economy-fac ... sr-1573961

http://www.bbc.co.uk/news/business-36953247

None of those stories say that the Bank of England predicted a 50% chance of a recession, they say that some think tank predicted that.

[Lexten]

Right, the only thing that's changed is investors confidence in the pound. The only reason that investors are less confident in the pound is because of the scaremongering about what would happen in the case of Brexit.

Is it still scaremongering if it's true?

That's why I said the scaremongering was self-fulfilling. It reduced investor confidence in the pound, which reduced demand for it, which caused it's value to tank.

Right, the only thing that's changed is investors confidence in the pound. The only reason that investors are less confident in the pound is because of the scaremongering about what would happen in the case of Brexit.

You mean the advice from the various sources and range of opinions that investors usually get their information from indicating it would have a negative impact.

I'm so sick of people thinking they can dismiss things they don't like but can't actually argue against as scaremongering. It's bullshit. They made an informed decision using things they always use.

But it's those various sources that predicted a negative impact which caused a negative impact. If the sources had said that Brexit would have been good for the economy, confidence in the economy would have grown and Brexit would have been good for the economy.

Where did I say the traders didn't know what they were doing?

If traders are making bad investment based on public hysteria and haven't invested heavily in apparently undervalued currency for last month+, clearly they don't know what they're doing.

The hysteria meant that the BofE had to cut interest rates (which it had been saying it would do for the past month) which also makes sterling less attractive.

[Vassenor]

Is it still scaremongering if it's true?

That's why I said the scaremongering was self-fulfilling. It reduced investor confidence in the pound, which reduced demand for it, which caused it's value to tank.

Do you read the Telegraph, by chance?

[Lexten]

That's why I said the scaremongering was self-fulfilling. It reduced investor confidence in the pound, which reduced demand for it, which caused it's value to tank.

Do you read the Telegraph, by chance?

I've got a news feed that links to articles from it sometimes.

[HMS Vanguard]

That's why I said the scaremongering was self-fulfilling. It reduced investor confidence in the pound, which reduced demand for it, which caused it's value to tank.

Do you read the Telegraph, by chance?

Doesn't seem like you read much. Skim the headline perhaps, even then not very well.

[Arkolon]

Is it still scaremongering if it's true?

That's why I said the scaremongering was self-fulfilling. It reduced investor confidence in the pound, which reduced demand for it, which caused it's value to tank.

Falling investor confidence was because they did not believe putting their money in private capital would yield as high return anymore. I don't know about you but I think that's to do with the IOD, RBC, EEF, BBA, WTO, IMF ... etc all saying British (and, where applicable, their constituent) companies would likely suffer at least a squeeze in the short- to medium-term, not what the politicians had to say.

[Marcurix]

You mean the advice from the various sources and range of opinions that investors usually get their information from indicating it would have a negative impact.

I'm so sick of people thinking they can dismiss things they don't like but can't actually argue against as scaremongering. It's bullshit. They made an informed decision using things they always use.

But it's those various sources that predicted a negative impact which caused a negative impact. If the sources had said that Brexit would have been good for the economy, confidence in the economy would have grown and Brexit would have been good for the economy.

When a doctor tell you your liver is going to shut down if you do something, your liver isn't then going to shut down because the doctor says so. It shut down because you did the thing.

That is a rather simplified version of explanation for you. These people that are pulling money out are doing so because we are now in a serious position of uncertainty. They're doing so because their best knowledge has said that's the best course of action to take because of the ramifications.

Those people said it would be bad for the economy because it would be bad for the economy. If they seriously thought being outside the EU would have been better for them, they would have said so.

[Vassenor]

Do you read the Telegraph, by chance?

Doesn't seem like you read much. Skim the headline perhaps, even then not very well.

Hm?

[The Nihilistic view]

But it's those various sources that predicted a negative impact which caused a negative impact. If the sources had said that Brexit would have been good for the economy, confidence in the economy would have grown and Brexit would have been good for the economy.

When a doctor tell you your liver is going to shut down if you do something, your liver isn't then going to shut down because the doctor says so. It shut down because you did the thing.

That is a rather simplified version of explanation for you. These people that are pulling money out are doing so because we are now in a serious position of uncertainty. They're doing so because their best knowledge has said that's the best course of action to take because of the ramifications.

Those people said it would be bad for the economy because it would be bad for the economy. If they seriously thought being outside the EU would have been better for them, they would have said so.

Economic prospects are not governed by objective fact that are 100% true. It's based on opinions that feed into confidence. If you have a doctor tell you you have liver disease 99.9 times out of 100 you have liver disease, it is also a diagnosis that can't be fulfilled by a self fulfilling diagnosis. Economists are however more often wrong and economic conditions can be worsened or improved by events that can become self fulfilling.

[HMS Vanguard]

Again, missing the key point that economic indicators haven't shown any big negative movement in response to Brexit.

Brexit is probably going to a blip in the short term and invisible in the medium term.

[Vassenor]

Again, missing the key point that economic indicators haven't shown any big negative movement in response to Brexit.

Brexit is probably going to a blip in the short term and invisible in the medium term.

Well then I guess we should just fire all the experts. Clearly you know better.

[HMS Vanguard]

The experts are predicting no recession, 0.5ppt increase in unemployment for 18 months.

[Vassenor]

The experts are predicting no recession, 0.5ppt increase in unemployment for 18 months.

And when we can't get the special trade deals Vote Leave is convinced will be thrown at us like roses to a bullfighter?

[HMS Vanguard]

Are you claiming that expert predictions are based on Vote Leave's trade deal assumptions.

[Great Nepal]

If traders are making bad investment based on public hysteria and haven't invested heavily in apparently undervalued currency for last month+, clearly they don't know what they're doing.

The hysteria meant that the BofE had to cut interest rates (which it had been saying it would do for the past month) which also makes sterling less attractive.

Pound tanked long before BoFE even indicated it was cutting interest rates; and the customer confidence was above forecast in June - so why didn't the pound recover its original value based on hysteria theory? Further the BoFE highlights fall in both business and customer forecast, unless you're suggesting businesses are being run based on hysterics, how is significant drop in business confidence explained by hysteria theory?

Or alternatively, experts are actually experts in their field of study, businesses don't like uncertainty, Brexit has caused uncertainty and leave campaign had no plans to address that uncertainty, business stop investing like they said they'd to wait for certainty, economic outlook drops because investment is likely to drop, everyone can see that because everyone predicted that, traders flock to safer assets long before BoFE says anything.

[Vassenor]

And to put meat on my "do you read the Telegraph" question, it's because they ran an article on Friday basically trying to deny that Brexit uncertainty is in any way responsible for the recession risk and it's all the fault of scaremongers.

You know, just like has been happening in this thread for the last few pages.

[HMS Vanguard]

The hysteria meant that the BofE had to cut interest rates (which it had been saying it would do for the past month) which also makes sterling less attractive.

Pound tanked long before BoFE even indicated it was cutting interest rates; and the customer confidence was above forecast in June - so why didn't the pound recover its original value based on hysteria theory? Further the BoFE highlights fall in both business and customer forecast, unless you're suggesting businesses are being run based on hysterics, how is significant drop in business confidence explained by hysteria theory?

Or alternatively, experts are actually experts in their field of study, businesses don't like uncertainty, Brexit has caused uncertainty and leave campaign had no plans to address that uncertainty, business stop investing like they said they'd to wait for certainty, economic outlook drops because investment is likely to drop, everyone can see that because everyone predicted that, traders flock to safer assets long before BoFE says anything.

Thus stock prices rose.

[Great Nepal]

The experts are predicting no recession, 0.5ppt increase in unemployment for 18 months.

BoFE predicts "little growth in GDP" for rest of the year because of impact from their new stimulus program; and several industry representatives including majority of Institute of Directors saying it wont be effective; plus that prediction is predicated on PMI improving. Oh and yes they are assuming “some reduction in openness” from the government - which can't be criticized because again leave has absolutely no clue what it wants. So yes that tiny growth prediction comes with massive caveat that 1) we won't actually have super hard Brexit (or Boris poisons their drinks and they give him single market with minor adjustments without free movement) and the massive dive of PMI will improve, when the actual business leaders are not sure the bank's response will be effective.
Looking at others, Markit has already indicated drop of ~0.4% of GDP according to slowdown of economic output, NIESR has indicated 0.2% drop by September and coin toss of recession, ABN working of same PMI data also thinks UK will go into recession.Morgan Stanley predicts again stagnation to recession.
Our growth rate before the referendum was ~2%, now we're discussing whether it'll be just over 0 or just under 0 so yes Brexit has caused big negative movement in the economy. People are discussing if impact will be bad, really bad, or really really bad. You know what'd be super - if we hadn't done the thing that caused bad-super bad impacts when there was quite clear prediction doing it'd be bad.

[Great Nepal]

Pound tanked long before BoFE even indicated it was cutting interest rates; and the customer confidence was above forecast in June - so why didn't the pound recover its original value based on hysteria theory? Further the BoFE highlights fall in both business and customer forecast, unless you're suggesting businesses are being run based on hysterics, how is significant drop in business confidence explained by hysteria theory?

Or alternatively, experts are actually experts in their field of study, businesses don't like uncertainty, Brexit has caused uncertainty and leave campaign had no plans to address that uncertainty, business stop investing like they said they'd to wait for certainty, economic outlook drops because investment is likely to drop, everyone can see that because everyone predicted that, traders flock to safer assets long before BoFE says anything.

Thus stock prices rose.

We were talking about exchange rate there, as you'll notice.

[HMS Vanguard]

So what is your position - that we believe the experts or we believe the guys with the most pessimistic prediction? Because it seems like a few posts ago you were calling people idiots for believing the most optimistic predictions rather than the best experts. What's the difference?

The BoE predictions are that Brexit will cause a minor, short lived economic blip. I buy that, and it's what I predicted before the referendum, when I campaigned for Leave. Now it seems the experts are on my side, and it is you trying to desperately massage what they are saying.

[HMS Vanguard]

Thus stock prices rose.

We were talking about exchange rate there, as you'll notice.

No, you were talking about companies' long term profitability, which should be reflected in their stock price.

The USD-GBP exchange rate does not reflect living standards. In 1850 you could get 5 USD for each GBP. Britain is not 20% as rich as it was in 1850.

[Great Nepal]

So what is your position - that we believe the experts or we believe the guys with the most pessimistic prediction? Because it seems like a few posts ago you were calling people idiots for believing the most optimistic predictions rather than the best experts. What's the difference?

The BoE predictions are that Brexit will cause a minor, short lived economic blip. I buy that, and it's what I predicted before the referendum, when I campaigned for Leave. Now it seems the experts are on my side, and it is you trying to desperately massage what they are saying.

Find me a expert who's saying the stagnation/ recession will be short term blip and we'll return to 2% growth in say three years.
BoFE clearly caveated their prediction of reduction of 1.5% growth if there are only some reduction in openness - are you saying with certainty leave campaign politicians will fulfill that assumption?

We were talking about exchange rate there, as you'll notice.

No, you were talking about companies' long term profitability, which should be reflected in their stock price.

The USD-GBP exchange rate does not reflect living standards. In 1850 you could get 5 USD for each GBP. Britain is not 20% as rich as it was in 1850.

Preety certain we were taking about exchange rate...
Lexten said "The scaremongering scared the investors, who (after the Brexit vote) then thought that the pound was too risky and worth less, so it became worth less", and that was how that started.
And yes because standards of livings are measured over 100 years; and exchange rate obviously doesn't impact the cost of living at all. If the prices of imports goes up, I'm sure all the companies will be able to and be willing to eat their losses from imports rather than passing on the cost to the customer.

[HMS Vanguard]

Huh? The Bank of England is not predicting a recession. They are not predicting that "the recession" will be short lived because they are not predicting a recession.

The experts are on my side.

[Great Nepal]

Huh? The Bank of England is not predicting a recession. They are not predicting that "the recession" will be short lived because they are not predicting a recession.

The experts are on my side.

Please read that again "Find me a expert who's saying the stagnation/ recession will be short term blip and we'll return to 2% growth in say three years"; and you didn't actually answer - given BoFE's prediction of effective stagnation (0.5% growth) is based on assumption there'll only be some reduction in openness of UK market compared to full EU membership, are you saying leave campaign politicians won't be pushing for full hard Brexit?