Brexit and the waning days of the United Kingdom

[alfred russel]

The problem is that the most optimal result is the status quo, which decision-makers are bound to destroy, to honour the referendum result.

The last few years have been really good for the economy world-wide, really, and AFAIK there could be good arguments made that the UK made worse than it could have. It certainly is among the slowest of its peers.

And Brexit hasn't actually happened. Business doesn't even know what form it will take. Yeah I know we are almost two weeks past the original deadline, but there you have it.

Also, I find it very bad that even Remainers concentrate on the short-term economic damage. It would be substantial but there are myriad small to large things that people will actively notice if a no-deal crashout happens.  The no-deal lunatics operate with slogans like "Let's go WTO!" but having tariffs or not is a small portion of the problems presented.

My contrarian position isn't that Brexit was good, only that it isn't a disaster. Britain having slower growth than its peers is hardly a compelling news story outside of Britain. It is also very hard to say the long term results, and as you say Brexit hasn't actually occurred. A catastrophe may yet happen! But markets are forward looking, and they aren't anticipating such a thing.

[crazy canuck]

Having an economy that is not growing is close to a disaster (given the fact it is self inflicted) and the knock on effects will likely be disastrous.  If you read the link I posted you will see that the Harvard folks who looked at the issue say that the only historical comparable for the kind of uncertainty they measured was the Great Depression.

[Tamas]

My contrarian position isn't that Brexit was good, only that it isn't a disaster

Brexit hasn't happened yet, though.

[crazy canuck]

My contrarian position isn't that Brexit was good, only that it isn't a disaster

Brexit hasn't happened yet, though.

And it is already a disaster.

[alfred russel]

The economy is not doing fine.  It is stalled.

https://countryeconomy.com/gdp/uk

Gross Domestic Product of United Kingdom grew 1.4% in 2018 compared to last year. This rate is 4 -tenths of one percent less than the figure of 1.8% published in 2017.

The GDP figure in 2018 was $2,822,817 million, leaving United Kingdom placed 5th in the ranking of GDP of the 196 countries that we publish. The absolute value of GDP in United Kingdom rose $194,407 million with respect to 2017.

The GDP per capita of United Kingdom in 2018 was $42,593, $2,793 higher than in 2017, it was $39,800. To view the evolution of the GDP per capita, it is interesting to look back a few years and compare these data with those of 2008 when the GDP per capita in United Kingdom was $47,469.

If we order the countries according to their GDP per capita, United Kingdom is well positioned in terms of the standard of living of its population, coming 24th out of the 196 countries whose GDP we publish.

It is one of the wealthiest places on earth and grew last year at 1.8%.

[alfred russel]

Having an economy that is not growing is close to a disaster (given the fact it is self inflicted) and the knock on effects will likely be disastrous.  If you read the link I posted you will see that the Harvard folks who looked at the issue say that the only historical comparable for the kind of uncertainty they measured was the Great Depression.

1.8% growth last year is a disaster?

[crazy canuck]

Having an economy that is not growing is close to a disaster (given the fact it is self inflicted) and the knock on effects will likely be disastrous.  If you read the link I posted you will see that the Harvard folks who looked at the issue say that the only historical comparable for the kind of uncertainty they measured was the Great Depression.

1.8% growth last year is a disaster?

The economy grew by just 0.2% in the final three months of 2018, down from 0.6% in the third quarter. The fourth-quarter figures contained evidence of an even sharper slowdown, with the economy posting a decline of 0.4% in December amid signs that Brexit uncertainty is taking hold.

Business investment has collapsed into the weakest period since the financial crisis with four successive quarters of falling corporate spending last year, paving the way for weaker economic growth in future.

https://www.theguardian.com/business/2019/feb/26/brexit-economy-job-losses-investment

[alfred russel]

Having an economy that is not growing is close to a disaster (given the fact it is self inflicted) and the knock on effects will likely be disastrous.  If you read the link I posted you will see that the Harvard folks who looked at the issue say that the only historical comparable for the kind of uncertainty they measured was the Great Depression.

1.8% growth last year is a disaster?

The economy grew by just 0.2% in the final three months of 2018, down from 0.6% in the third quarter. The fourth-quarter figures contained evidence of an even sharper slowdown, with the economy posting a decline of 0.4% in December amid signs that Brexit uncertainty is taking hold.

Business investment has collapsed into the weakest period since the financial crisis with four successive quarters of falling corporate spending last year, paving the way for weaker economic growth in future.

https://www.theguardian.com/business/2019/feb/26/brexit-economy-job-losses-investment

Turns out I misquoted myself...1.4% last year...oh no! The horror! 1.4% for 2018! 0.2% growth for Q4 is abysmal though.

I'm shocked you are so concerned about the UK when they doubled up on Canada, which grew 0.1% in Q4 (though they did beat the UK for full year 2018, 1.8% to 1.4%).

https://countryeconomy.com/gdp/canada

[crazy canuck]

You are easily shocked.  Which makes me wonder why you are so unconcerned about Brexit. 


edit: and I might add, Canada has had the recent misfortune of having its most important trading partner undergo temporary (we hope) insanity in relation to its trade policy with Canada.  Not exactly the best analogy for the point you are trying to make.

[Valmy]

My contrarian position isn't that Brexit was good, only that it isn't a disaster

Brexit hasn't happened yet, though.

Hush. He is rolling.

[Zanza]

I guess the damage to Britain's democracy far outweighs that to its economy.

[alfred russel]

Country         2018 GDP Growth Rate               Q4 2018 GDP Growth Rate          2018 Per Capita GDP (USD)
UK                1.4%                                              0.2%                                       $42,593
Germany      1.4%                                               0.0%                                       $48,300
France         1.5%                                               0.3%                                       $41,451
Spain           2.6%                                               0.6%                                       $30,534
Italy             0.9%                                               -0.1%                                     $34,247
Canada         1.8%                                              0.1%                                       $45,095
USA              2.9%                                              0.5%                                       $62,887

[Valmy]

I guess the weird thing is we had not discussed the economy in years in this thread and suddenly Dorsey jumps in with this bombshell THAT WE HAVE ALL BEEN WRONG!!111

Since this subject has not been discussed in so long I am in really no position to address what we are looking at except to say again that Brexit has not occurred and we still do not know on what terms it will occur.

[alfred russel]

I guess the damage to Britain's democracy far outweighs that to its economy.

I don't see any damage to its democracy.

Britain's inept political class is not a result of Brexit. It has been revealed by the current situation, but that isn't the same thing.

[alfred russel]

I guess the weird thing is we had not discussed the economy in years in this thread and suddenly Dorsey jumps in with this bombshell THAT WE HAVE ALL BEEN WRONG!!111

Since this subject has not been discussed in so long I am in really no position to address what we are looking at except to say again that Brexit has not occurred and we still do not know on what terms it will occur.

I know there is more to Brexit than trade, but trade seems to be the biggest issue that is getting discussed. That is an economic issue, obviously.

You are right that Brexit hasn't happened, but in neither the financial markets nor GDP data is there a sign that a major disruption is happening or about to happen.