Habsy
Not playing around anymore.
Don't worry, Trump will make it great, beautiful, awesome, wonderful.
OT: The News Thread
- Thread starter MindzEye
- Start date
Altair
Well-known member
I'm not a subscriber to the WSJ so I can't read the article. There is a reason I post important parts of articles in my posts. Sad.
So... a prediction was made, the UK made adjustments, predictions didn't come to pass, but the predictions were right? You live in a weird world my friend
Yes yes, predictions of financial ruin, Britain pushing stimulus, no financial ruin and 3rd best GDP growth in the G7, top third of the economic powerhouse that is the EU...Sucks to be the UK, financially ruining themselves into better than average GDP growth for freedoms they couldn't get in the EU.
I don't know, maybe due to the fact that they are still the 5th largest economy in the world? With you're stance on things, I'm surprised businesses set up shop in mere backwaters such as Canada. Will some leave? Sure. But don't act like the British economy is insignificant. It's still the 5th largest on the planet, what business just decides to hell with that? A very poor one.
Those poor plebs, not understanding how things work in their country making decisions. I wont get into all the things I think are more important than just the economy because we've gone over that time and time again, but I will say that if the economic conditions don't drop like all the experts thought it would and the UK is still able to produce decent economic growth out of this all arguments for staying in the EU are dead. The biggest reason given for staying in was the economic ruin that would come to pass if a nation left it, well, they have voted to leave it, lets look at the economic forecast.
GDP growth 2016
Uk-2 percent
Germany-1.7 percent
USA 1.6 percent
Canada/France 1.3 percent
Italy/Japan 0.9 percent
Looking at 2017
USA 2.3 percent
Canada 1.9 percent
UK/Germany 1.5 Percent
France 1.3 percent
Japan 0.8 percent
Italy 0.7 percent.
Yeah, Brexit so far is really kicking the UK in the teeth. Man, I wish they stayed in the EU so they could compete with nations such as Germany...wait...France...wait...Canada...wait...Japan....wait....well damn. Maybe Italy? Ummm...lol.
SundinsTooth
Leafs Moderator
You haven't refuted a single thing that ME posted. Might want to actually read what he said.
Altair
Well-known member
that the brits pushed stimulus into their economy thus there aren't any significant negative economic repercussion to date?
I agree. They did.
I'm simply surprised that nobody factored that little tidbit into their projections when they were crying about how bad the British economy would tank immediately after the brexit vote and later on when they actually followed through with it.
Nobody was saying "The economy will tank unless the central bank pushes through stimulus measures and drops interests rates"
It was more like "The economy will tank"
So why refute what I agree with? I said all along that the Brits managed without the EU for most of their existence and they will finds ways to do so again that wont leave them in ruin. So far I'm right.
I also said the that the brits will remain competitive with the EU. So far I'm right.
I have said once they are out they will still not be much less competitive. We shall see.
Altair
Well-known member
What's the debate if I agree with what he said?
MindzEye
Wayward Ditch Pig
It was the brexit bail out, it was big news. We talked about it when it happened on here. For some reason you seem to have forgotten or ignored it.
You make prediction with the facts on the ground. At the time of the brexit vote, it was the right analysis. Mark Carney made a good call, but you can't bank on the government (or a central bank) always making the right call. The prediction wasn't wrong, all signs point to it being a concrete reality had steps not been made to avoid it. If I tell you that the road a KM away looks icy and dangerous from here, and you take my advice and take a different road, don't crash and die....was my prediction on the conditions ahead wrong?
Projected. The article you posted was a projection.
You really don't understand how this works.
Okay..say you own a company and you put your EU headquarters in London. You don't produce anything there, you just function as a business entity there. You are going to do all of your european (and UK) business out of that office. You're going to book your EU (and UK profits) there. You're going to hire a bunch of people from London to work on your office, handling everything from Sales, HR, logistics, IT...everything. Everything required to run your business you're going to source locally. This allows you to manage costs very effectively. Currently, this also allows you to sell your product (or service) everywhere in the EU with no additional costs (tariffs, etc) attached that make you more expensive compared to local competitors. You don't have to worry about a German company under cutting your rates because you're paying a 12% tariff. You face no financial trade barriers because you're all part of the EU.
When that changes, there are now barriers, so if the majority of your business is done on the continent (however large the UK economy is, it's a fraction the size of the Eurozone) you're now at a competitive disadvantage in the eurozone (without a sweetheart of a free trade deal in place, with Brussels has stated flat out isn't coming). Now you have 2 choices...eat the additional costs of doing business (you can't pass the cost along to your customers, because then you're not price competitive against local companies), or....open up a satelite office and register in that country.
This has multiple effects on the London office...everyone employed in the London office who used to handle the work load to manage the business out of say, Germany....no longer has a job. But then you realize that Germany (or France, or whoever else in the EU) doesn't have those barriers to trade, so why not do all of your EU business out of that office?
So again I ask. Why stay in London? Sure, if you have enough business in the UK to support a London office, you'll keep a London office open, but it will be a fraction the size of it's previous presence, paying a fraction of the tax dollars (both direct, and in terms of payroll taxation on local employees)
This is the danger of brexit, for businesses in the UK. They won't disappear, but they will most definitely shift a large portion of their UK presence to the continent to find more advantageous business structure to avoid the additional cost of doing business with an entity outside the Eurozone.
Huge bailout and a interest rate cut and GDP went up eh? You don't say. And here I thought that all that money just evaporated into thin air after the BOE printed it. What the **** else did you think was going to happen? They just dumped a few hundred billion pounds into the economy.
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most just tell the other one he is stupid
Habsy
Not playing around anymore.
You're stupid.
yet it takes American jobs away from hard working people [video=youtube;l8ZJu-f-XOE]https://www.youtube.com/watch?v=l8ZJu-f-XOE[/video]
worm
Well-known member
I can debate that point
Habsy
Not playing around anymore.
You're stupid.
Altair
Well-known member
I'm aware it happened, I just don't see anything with solid numbers out there right now. type brexit and bailout into google and you get the WSJ article that I can't read, Italian bailouts as a result of Brexit, Greece, the ECB 400 billion dollar Black Friday bailout, ect. I'm not spending all day trying to find more details, sorry, got things to do.
Again, there is a difference in what was being said. It wasn't so much that the road a km away looks ice and dangerous from here, it was more ice icy and dangerous that way, it's better to not leave the house. In other words, there were two scenarios being floated, financial stability if they vote to stay in the EU, economic turmoil if they vote to leave. There was no third way of, some financial measures will need to be taken if there leave vote succeeds that wont result into total ruin. I maintained from the start that the brits could manage a Brexit, even with some economic pain that went with it. So far, I think I'm spot on.
Okay, lets wait and see. Still looks good though
If most of their business is done in the EU, sure, they will either move completely or scale back operations in the UK. I agree. But to stop dealing with the UK comepletely? 5th largest ecnomy on the planet? Again, there will be some loss, but I think we are disagreeing with how big that loss will be.
So they managed to find a way to mitigate the potential negative impact of their immediate decision to vote leave.
Again, I think I said they would.
Altair
Well-known member
My argument this whole time hasn't been to say that there wouldn't be any negative effects from leaving, my argument has been that the freedoms they get from leaving will outweigh the negatives over the long run.
I also said they said that the brits would manage to find a way to move forward without ruining their economy, and as such, the sovereignty they get will be more than worth it.
So far that's coming to pass. Like I said it would.
MindzEye
Wayward Ditch Pig
But you know it exists, so instead of taking knowledge of it's existence into account and letting what you know about it (even if you don't know all the details) mold your opinion, it's full steam ahead with your previous opinion as if it doesn't exist?
Interesting way of looking at the world, **** facts amirite?
The facts are pretty simple. Carney promised 250 Billion in stimulus, QE and support for the Pound. Just to put that into context, the 2.7 Trillion UK economy is getting juiced significantly harder to shore up it's financial system than Canada...or the US did during the great recession when you measure the packages VS the size of the economy they were getting dumped into.
Then they cut interest rates to further stimulate it. If there wasn't a bit of upward movement in GDP growth after that, shit would be looking incredibly grim down the road.
aaaand they were right.
The pound dropped from 1.48 USD to the ~1.20 it's been for most of the last few weeks. That's about a 20% in currency value, which seems abstract at first until you look into the composition of the UK consumer economy and where it spends it's money. That's a lot of people jammed onto a small island...they produce a fraction of what they use, the rest of it comes from somewhere else. Prices for goods made elsewhere have, surprise surprise, gone up 20%. Their credit rating has been cut..which again seems abstract until you realize that a higher credit rating means a higher cost of borrowing and where do you think that 250 Billion Pound came from? Real wages are still 7% below 09 levels.
If that's not economic turmoil, what do we need exactly before we call it turmoil? Blood in the streets?
They've only managed the market reaction to it so far because of a monstrous commitment by the BoE, and the first shot hasn't even been fired in the real battle here. It's already been ugly if you're paying attention, it's going to be a ****ing bloodbath. Further huge drops in the pound, slow and steady increase in unemployment rate, further cuts to their credit rating and the BoE might not be able to do this again, there's a limit to their ability to back the currency and float incentives to industry to stay on the island. They don't have the benefit the US has in being the sole printer of the defacto world currency, they can't hide their malaise in quiet and steady inflation of the currency.
again, if a massive stimulus and rate cut didn't push GDP growth up a smidge, the backside of this would look incredibly bad.
Who said anything about not dealing with the UK completely? I don't think you understand the scope of the problem. The EU economy is massive. If it was grouped together and stated as a national economy, it would be by far the largest economy in the world. It's 800 Billion dollars larger than the US economy. Right now you can set up in London and have unfettered, border and boundary free access to that market..no extra cost of doing business. Companies do this for a bunch of reasons. Some of it is language (English is still the international language of business), tradition (a lot of large foreign firms have had a presence in London for over 100 years). Sure, they'll still do business with the UK, most will maintain some sort of administrative presence there. But there will be a negative incentive to do their European business there. It will cost them more money to do their European business in London than 1) it does now and 2) if they moved that business to anywhere...literally anywhere on the continent.
If you don't think that loss will be significant, you're not fully aware of why the EU exists in the first place and the benefits of being in it. Which given your anti free trade stance I've gathered from previous discussion, doesn't surprise me, but you're flat out, and very demonstrably wrong. This isn't theory, there's decades of economic data supporting this.
You're in Johnny territory here. All sorts of bad, and you just don't understand what you're looking at. The house is on fire, but because you can only see the smoke right now, you were right that it wouldn't burn down. They've "mitigated" the negative impacts in the same way that pain killers, crutches and a cast "mitigate" a broken leg.
MindzEye
Wayward Ditch Pig
They've lost 20% of their international wealth as an economy and put a **** ton of the credit card before they've even figured out how bad leaving the EU looks. I can't believe you're still trying to put a good face on just how shit their situation is. All before they've gained the ability to limit the amount of brown people and Polish Carpenters they let into the country.
And Mark Carney deserves a ****ing Knighthood for managing to limit the damage to where it is.