Saturday, October 22, 2016

Brexit lie of the moment...

There were plenty of lies circulating before the EU referendum, but the biggest porky doing the rounds in the new Brexit reality is that the collapse of Sterling is really quite a good thing, as it will boost Britain’s exports. 

Last week the Economist pointed out that there is in fact no evidence from recent times that the UK’s exports get any sort of leg up from a devaluation in Sterling. If we were largely in the business of pushing commodities out into the global market like say Chile, the Pound’s tribulations might have a silver lining of sorts, but most of what we sell abroad has been made with stuff we have earlier had to buy from Johnny foreigner. 

More expensive Marmite may soon by the least of Britons’ gripes. BA for example appears to base many of its fares on the dollar. Right now the basic economy ticket between Gatwick and Cancún costs more than $1000 which, given the Brexit exchange rates and the fact that this has always been the discount route between Europe and Central America, probably means there will be fewer Brits soaking up the rays on the Mayan Riviera this winter. (The peso will probably also attempt to rise from the ashes on firm news of Trump’s demise.) 

British equities look cheap, but foreign investors probably fear a further devaluation that will make them even cheaper. Many will already have been burned by the fall since June which has made the concurrent surge in the value of the FTSE index largely meaningless. 

Monday, October 17, 2016

Winner and losers

As part of the wider dawning that even if Trump were to lose, some 60m Americans will have voted for him, Obama has just spoken of the GOP's 'swamp of crazy' and its responsibility for the rise of the demagogue; the suggestion being that this all politicians' doing, a dial that can be turned back. 

Yet surely it was inevitable that in a society that has so unashamedly celebrated winning, and in a manner divorced from ethical concerns, that the losers would eventually congeal into a fairly serious cultural problem. That it took so long is actually remarkable. 

Perhaps the losers had been assuaged by the perception that other ‘communities’, were losing more bigly, or that loserdom was always just a temporary state of affairs in the greatest nation on earth. Neither of these propositions have quite the firmness of yesteryear now. 

And so they have adopted Trump, the self-conscious winner who appears more than able to think and talk like a loser.