Barnier hiding the true agenda
It is hard to fathom why no one asked Michel Barnier two questions when he was in London yesterday. First, how can the UK decide if it wants to be in or out of the customs union and single market when you are keeping what it will cost secret from them, and second how much do Paris and Frankfurt covet the City of London’s status within the Global Financial Market?
The UK will be able to squeeze any number of concessions from the EU over the single market in goods, especially since that be a two-way street but when it comes to financial services, no way. The UK is going to be banned from any access to the financial passport despite the offer that has already been made about EU banks retaining branches in the UK. The cost in capital alone of converting those branches to subsidiaries will be huge but the banks will be well compensated when the UK’s business in Europe is 'divvied up'.
Europe tearing the Conservatives apart again
The ruling Conservative Party in the UK has never been able to achieve consensus over Europe. As long ago as the original agreement to enter the common market there was Euroscepticism, calling it a disaster for the UK’s independence and sovereignty. Remarkably the decision to remain outside the single currency has proved to be right as the Bank of England’s independence has been a great success despite its recent slight loss of credibility.
Now we have plots being hatched that will see the government either lurch hugely to the right under Johnson, Gove and Rees-Mogg in charge or become more centrist under May, Soubry and Rudd.
Now we are reaching the 'sharp end' of negotiations and the real shape of Brexit is still unclear. The UK government sees Brexit as a clear signal that Britain should broaden its horizons and seek trade deals with the major global trading nations; the U.S., China, Japan Korea and the old Commonwealth. Unfortunately, they no longer have the clout to negotiate and will be forced to accept the crumbs from the 'top table'.
You are President in good times and bad Donald
If anyone wanted to sum up Donald Trump’s Presidency using just one event they would not need to look any further than yesterday. Teflon Donald distanced himself from the 4.6% fall in the Dow preferring to congratulate himself on the fiscal reform he managed to pass and concentrating on the 'long term fundamentals'. He was happy to say that stocks were rising both because of his election and the (Non-existent) economic stimulus he has provided but as soon as they turn, whoa nothing to do with me. Truly Presidential (if you are a Republican)!
The dollar rose to medium term highs which Trump will probably take credit for claiming then dollar is the safe have that its shores apparently no longer are.
A new era has emerged where cheap money will disappear, and the true strength of economic growth will depend on productivity, consumption and competition.
Let the games begin!