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politicalbetting.com » Blog Archive » The road to No Deal: Brexit’s Rubik’s Cube may simply be too difficult
Rubik’s cubes were very much a craze when I was at primary school in the early 1980s. I had one, my friends had one and millions of people across the world had them. No-one I know ever solved one though. Sure, you could solve one side easily enough but to solve all six? Certainly it was possible – you saw people on television doing it – but we simply didn’t understand the maths or mechanics necessary, and didn’t have the vision or capacity to try.
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And while EU27 governments may be alive to the security implications of failing to secure good cooperation, let alone 'no deal':
Based on evidence from Guy Verhofstadt, we are unconvinced that all of those involved in the Brexit negotiations fully understand the implications of cutting the UK out of shared data platforms, and moving to a model of ‘reciprocal’ data exchange. While we acknowledge that SIS II remains part of the Schengen package of measures, we call on EU27 countries to look beyond political considerations, consult their own law enforcement agencies, and engage fully with the operational impact of locking the UK out of EU law enforcement databases after Brexit.
https://publications.parliament.uk/pa/cm201719/cmselect/cmhaff/1356/135607.htm
There is some loose talk about 'no deal = WTO', but there is 'agreed transition to WTO' and 'crash out to WTO'. The latter could happen next March. The former - if it can be agreed, what with the mutually exclusive objectives on Ireland, happens after the transition phase when we've had more time to get things in order.
Take a company Z Plc, which has a subsidiary in Estonia, Z Development Eesti. Z Development Eesti is required under transfer pricing rules to charge a market price, and therefore make a c. 8% profit. Which is then dividended back to the parent. It's complex, but it exists to avoid multinationals tax shifting.
Under current EU rules, Z Plc is shielded from double taxation. If we leave with No Deal, then suddenly those distributions will be subject to withholding tax.
It'd be a major cost issue for international businesses in the UK.
And here's the problem: the EU has no competence on tax between EU countries and non-EU ones, and cannot help with this on 1 April 2019 - unless there is a Treaty that says that the UK remains party to the relevant EU directive during a transition or implementation period. The UK and Estonia need to work on new legislation to replicate the existing EU one. This is 27 sets of negotiations that the UK has not even begun to think about doing.
We are where we are because a lot of very wealthy right wingers, completely shielded from the day to day consequences of a car crash Brexit, sold a false prospectus to an angry electorate and will not accept they did so. That is not going to change. They will seek to blame foreigners for what might happen, as they always do; and that might work for a while. But it will not solve any of the problems that their laziness, ignorance and mendacity will have created. So at some point it will all come crashing down. Those who funded it all will make a fortune, though. Phew.
Bit sleepy, but good article, Mr. Herdson. An alternative would be the old second referendum option.
Mind you, always the chance of intransigence/complacency leading to disaster.
There is no version of Brexit that meets the 5 tests set out.
Cancelling Brexit meets 4 of them
– Gain the acceptance of enough of the other 27 EU member states to pass the QMV threshold.
– Gain the support of the House of Commons.
– Gain the support of the European Parliament.
–
Not provoke a leadership challenge within her party, either directly from her MPs or as a consequence of cabinet / government resignations.– Retain the support of the DUP.
but it would need public approval.
The Tories are screwed as a party of Government whatever happens.
A Fuck business Brexit, complete with ration cards doesn't secure their future any better than rerunning the vote.
Voting again is the worst option, apart from ALL the rest.
BTW, My record time for solving the Rubik's Cube is 66 seconds...
https://www.reuters.com/article/uk-europe-politics-bannon/ex-trump-strategist-bannon-targets-britain-in-anti-eu-campaign-idUSKBN1KH260
I have reached the point where it would be interesting to see post WTO Brexit. Would JRM, Farage and the usual suspects be the first against the wall when the revolution comes?
"Moderate" Labour MPs should do likewise.
A realignment along genuine policy grounds rather than party banners would be perhaps the only good thing to come from this fiasco
https://twitter.com/andrewbensonf1/status/1022968990493237248
They came 4th last year. The idea a team so successful (best of the midfield) can be in such difficulty is indicative of the lopsided financial field they're playing on.
Pethaps burning torches and pitchforks will be needed
A year later he crossed the floor, having realised he was talking nonsense and there was no way either side could work together.
The PM and her company of political hobbits are not going to be able to resist the temptation to stitch up a win-win backroom deal with Barnier and his orcs which looks almost identical to Chequers, but with a few footnote concessions thrown in specifically to frustrate Corbyn's nationalisations, buy British agenda and taxation plans.
When it comes to the Commons the government will need plenty of Labour votes to see off the ERG-led Tory rebellion, putting the opposition in a difficult position. But JC will ultimately decide to hide his true instincts under the cover of Starmer's six tests not being remotely met, bite off the Remainer finger that feeds him, and whip his hordes through the No lobby gates with only a few of the worst sufferers of Brexit Derangement Syndrome deserting.
And thus it will be the raddled figure of Corbyn who finally casts the One Union of Power into the Crack of Doom, and takes himself with it.
Betting PostF1: backed Raikkonen for pole, each way 16.
Right now, forecast is for it to be dry. The Ferrari is looking better than the Mercedes. In qualifying, they have an engine mode the Red Bull does not (Horner reckons engine power deficit will cost them half a second in qualifying). It's also believed the Prancing Horse has some swanky new feature that nobody else does for qualifying pace.
Reasonable chance of a Ferrari front row.
Edited extra bit: if it rains, I reserve the right to complain, again, about being cursed.
In reality though there needs to be Minimum Deal Brexit in order to keep isotopes and planes moving, rather than a true No Deal. As such Minimum Deal Brexit could be compatable with the existing Transition, accepting that the date for imposition of Irish and Channel borders is Dec 20.
The fault is the governments. We could be like Norway, or we could be like Canada (though Canada minus FTA for a few years) but Cakeism has prevented them having that discussion.
Meanwhile, there is potential redemption in the shape of a Russian fertiliser billionaire with a racing driver son...
https://www.racefans.net/2018/07/27/gp3-driver-mazepin-billionaire-father-linked-force-india-f1-buy-in/
A: They both get harder the longer you play with them
As a callow schoolboy that was the first dirty joke I was ever told/then shared.
Apologies for lowering the tone on David’s excellent piece, I’ll go back to packing my bag.
This hedge fund thing has become a bit of a conspiracy theory which has starting doing the rounds more confidently. I personally know several traders who are utterly confident of a deal (I think they are wrong for much the same reasons that remainers were wrong back in 2016) and have their money where their mouths are, and only one the other way.
I can't see anything meeting the desires of the EU27 ever making it past this parliament, so barring a new parliament which the FTPA makes very hard, we're left with no deal.
The sooner serious preparation for it occurs the better.
A more moderate strategy for investments is to shift to a cash position* and to investments that earn overseas in reserve currencies such as USD, Yen and Euro, or in foreign companies. European markets are probably more vulnerable than more geographically distant ones. This is the strategy that I have followed with my own portfolio, with only a small amount now at risk in UK companies. Of course my house and government pension are denominated in Sterling so not possible to be completely insulated, but both are good assets for the longer term.
*While Sterling cash is at risk of further devaluation, it does have the advantage of being able to buy assets at firesale prices during the market dip.
Decent amount of rain here in Leics.
As a patriotic Remainer I fear for my country.
We voted for Brexit, not any particular type of Brexit. So, any Brexit ticks the box. No Deal is any type of Brexit, so job done.
What's to complain about?
Cash is king until we have more Brexit certainty. Mine will get busy in April next year.
I know Corbyn said it was but (a) he had to withdraw it (b) he was protected by parliamentary privilege and (c) he doesn't have a clue what he's talking about anyway.
"Madam to Butler in sultry voice
James ..take off my coat
James.. take off my dress
James take off my bra
James take off my panties
..and James.... Don't wear my clothes again.
https://www.reuters.com/article/uk-britain-eu-wto/britain-asks-to-join-wto-procurement-deal-in-latest-brexit-step-idUSKCN1J11TK
The British government has been unable to successfully conclude negotiations with itself let alone the EU. Why is everyone assuming they'll be able to get the WTO deal done?
Fwiw, my own view is that No Deal is the likeliest outcome. Next most likely is No Deal with Emergency Measures. Next most likely is a second referendum and sharp reversal of direction - an 'oh shit, what have we done referendum'.
Next most likely is some kind of fudge which passes for Brexit but isn't really but 'it will have to do'.
As a betting man, what's the odds?
I'd say about 2/1, 3/1, 4/1 and 8/1 respectively, the rest of the book being made up of outrageous outsiders that nobody currently thinks possible - adults entering the room and taking over, for example, to clean up the mess the children have made.
Incidentally, am I alone in thinking that all these outcomes imply a Corbyn-led Government after the next GE? And am I alone in betting accordingly?
“There is no progress on agreeing the terms of Brexit (at the WTO),” she said.
That sounds alarmingly similar in tone to Barnier as he has oh so reasonably filleted the government’s efforts to negotiate any concessions for Britain.
Hedge funds in the large have not been hedge funds in any meaningful sense for decades. When equities go down they tend to lose money. The sub-sub-category you are talking in are the so-called macro funds who make their money betting on economic events. Those tend to be the famous names like Soros, Tudor and Tiger (Alan Howard of BREVAN Howard maybe the best known today, which is not very well known at all).
If the view amongst macro traders is that a deal will be done, and quite probably it will be their view as experience has taught us the the EU usually cobbles something together at the last minute which then has to be repaired ad infinitem, then they will net lose money if there is no deal. The only way they will make a tonne of money if there is no deal is if a deal is mostly priced in, it falls apart at the last minute, AND THEY WERE EXPECTING THAT OUTCOME.
I'm pretty sure this site is mostly blocked at work but will try to get them to look. It'll get a wry 'we're so misunderstood' type smile but probably not any further response.
Oh and (e) how many of the Labour Party are under investigation for hate speech/speeding offences/violence/accusing the Leader of being racist.
No Deal isn't an end state outcome. Which implies a deal, which will be on the EU's terms. The current blocker to a Withdrawal Agreement is the NI backstop. Leavers - Remainers don't get a say - will need to decide whether to prioritise divergence from the EU over avoiding a regulatory border in the Irish Sea. As divergence is bad for business and the all important DUP are adamantly opposed to an Irish Sea border, the "vassal state" is pretty much nailed on. The question is at what point will Tory leavers accept this.
Given a choice between an utterly crap Brexit and no Brexit at all, we have to assume Leavers will go for the utter crap. This has been the choice all the long but Leavers have never been in the space where they have accepted that is the choice. It's going to be painful. Remainers aren't driving this so their opinions don't count.
https://twitter.com/guardian/status/1022205663068467201
The brinkmanship has gone too far, and noone is stepping back. May is one who might want you, had has a little, but lacks the parliamentary numbers to do so anyway. The EU simply don't care to.
Jezza is good in parts and malodorous in others, but John McDonnell seems increasingly well prepared and pragmatic as CoE. I am pretty relaxed about the prospect.
I take your point(s) Ydoethur. It may take a while and it could easily be that instead of Corbyn we could be treated to a McDonnell government, for example. What fun!
Btw, what particular Tory Leader do you have in mind? I thought the general consensus was that the reason they still have May is that there is no plausible alternative.
12 years would be a good run. I think avoiding a demolishing needs to be the aim. Given the inability of the tories to agree a position given 2 years to do so , i think Corbyn will walk it. It only take s a few more not to fear him, in order to win.
What if I create a hilarious meme or witty slogan/picture? And post it to my own account. And everybody shares it. It'll be hugely beneficial to one side, but can't possibly be governed by any of these proposals. You can't legitimately stop people taking the piss or putting forward their own case (just as we all do here).
https://www.bbc.co.uk/news/technology-44967650
There is no plausible alternative to May who can deliver a "better Brexit" than May herself.
If the political imperative changes to "beat Corbyn" or "reverse A50" different names would perhaps emerge.
The biggest fear has long been that Corbyn (or his surrogates) will takes us on the Road to Venezuela. Since the Tories will have already taken us down the Road to Brexit, Venezuela may not look too bad by then.
*my exception is copper, which I think has a bright future with electric cars etc.
I'm sticking with 75% no deal. The no dealers are clear on what they want, and people who are certain can bear others along with them even if it seems given all those opposed they should fail. Cross party support is needed for a deal, and no one thinks that likely (plus as David points out even getting a deal to accept is tricky).
No Deal remains favorite. ND plus crisis measures, as you suggest, still second favorite in my book.
And there really can be no complaints. It is what we voted for. As our mutual friend Sunil is fond of pointing out - '52%/48%'.
No Deal would also require the pre-Brexit departure of Theresa May, whose entire government policy would have failed. Who would replace her?
https://www.theguardian.com/sport/blog/2018/jul/27/adil-rashid-yorkshire-england-red-ball-cricket
https://arstechnica.com/information-technology/2018/07/from-bitly-to-x-agent-how-gru-hackers-targeted-the-2016-presidential-election/
Even with Starmer somewhat doing his own thing at times, I don't see how Labour back a tory negotiated deal politically. Their position has been fluid precisely as they don't want to commit either.
.
OK, accept that. What IS Somerset Capital then?
I confess I'd never even heard of it despite working in the industry for years. It seems to be a specialist emerging market fund so its activities and investments have bugger all to do with Brexit!
It's easy to believe the problem lies in Yorkshire, but there is still no explanation as to why the England selectors preferred first Dawson, then Crane. There are no cricketing grounds for that preference.
We still can only guess what the real reasons were.
I sort of agree with @Scott_P (which is not something I've had the chance to say often recently). The Tories are usually happy to roll the dice when things are not going well even if there isn't an easy alternative. Even when there is - Heseltine, Davis, Butler - they are still more than capable of springing surprises.
In the case of May, a number of things are keeping her in place. First of all, she's refused to go quietly. Most leaders would have caved in last June, but she's hung on. Second, the timings make a leadership contest difficult - this deal is nearly out of time as it is, taking three months to choose a new leader ain't gonna help. Thirdly, the MPs have kept her in place out of fear that somehow, in some strange parallel space time dimension, Boris might replace her. Fourth, Remainers are fearful of a full-fat leaver (Davis) while Leavers are nervous of a diehard Remainer (Hammond). She is not really either and so is a less unpalatable option than the risk of a replacement. Fifth, nobody is mad keen for a potentially destabilising replacement or to take charge of these impossible negotiations.
However, from December none of those except possibly the first apply. Time will have run out with the EU and we will be leaving with a deal or without one. Boris has shot his bolt for good and all with the members with his flounce. Davis has as well, while once we leave the EU no Conservative except Ken Clarke and possibly Soubry will advocate rejoining so the views of Remainers cease to be an issue. With negotiations over and Corbyn in deep trouble of his own, the issues of government and instability are greatly reduced.
That is why I think there will be a roll of the dice in the New Year, and May will go. She might be forced out anyway for health reasons (she looks really ill) but if not I think Hammond and Hunt will have a quiet word.
Hammond - would actually have been my pick last time. However, he didn't stand and there is no sign he wants the job. I think he's very happy where he is and wants to stay there. A good case could be made that he's the best Chancellor we've had since Howe, and May's foolish treatment of him is one of many signs that her judgement is flawed. Could easily be the kingmaker though.
Javid - has panache and flair, and clearly wants it. Whether he has the ability to make tough decisions and make them stick is a different question. He and Hammond however as a duumvirate might be a very formidable team. Both are incidentally former hardline Euroscpetics turned Remainers.
Hunt - has the talent, the energy, and the ability to make tough calls. Can see him struggling in a campaign against Corbyn though.
Gove - realistically if one of the Leave camp stands it will be him, but I don't think he will. He knows how unpopular he is and there's no way he would improve on fourth last time.
Fox - may be tempted, but wouldn't win.
If it is Javid, backed by Hammond, I think there is a chance, although not a certainty, that the Conservatives could call and win an election against Corbyn. They have brains, experience, knowledge and indeed backgrounds that he simply can't match. It would be the posh thickos of Islington against the working class whiz kids. Moreover, Corbyn has admitted his policies are unworkable but has come up with no new ones. He would be vulnerable.
But whether the membership would vote for it, I don't know. I think however with Hunt and Javid as the final two, they would go for Javid.
We've had most stages in the grief cycle, but this is a new one. It's all too complicated, we're stuck in the EU. Akin to an abusive Victorian marriage where, because of all the labyrinthic rules, we can't unravel.
"I am stepped in blood so far that should I wade no more, returning were as tedious as go o'er."
2 weeks to go to the new footy season, and a curiously compressed transfer window has not had much excitement. Have we a new PB Fantasy Football League?
On March 30th in a No Deal situation, the many EU players will become simply non UK. I recall some restrictions on signing non EU players at present in terms of getting work permits and approval, presumably these rules will then apply to the EU players also.
I have to go. Have a good morning.
(2) Once we're out, as I've said, Leave/Remain is not the issue. It will be stay out/rejoin and I don't think any current Cabinet Minister, including Hammond, would advocated the latter in the next ten years.
Mr. CD13, remains to be seen what tactic they'll adopt. There's a departure in name only, revocation of Article 50 via the Commons, or a second referendum.
Got to say, it's dickish to spoil stuff that way. Not major, but still moronic.