U.K. Capitulation Complete!
The remain credentials of the majority of Theresa May’s Cabinet were proven beyond doubt yesterday as the financial consideration being offered by the U.K. to the EU was more than doubled from the twenty billion euros offered by Theresa May in her speech in Florence in September.
There were rumours earlier in the week of concessions regarding the treatment of those EU citizens choosing to remain in the U.K. after Brexit. It is unclear if this financial inducement will negate the need for further concessions.
It is interesting that there has been no leak from the Cabinet regarding this offer, so it is probable that there has been a concession from Theresa May that will become clear as negotiations move forward. It could even be that she has acknowledged that she is on borrowed time and once negotiations move to stage two she could step aside.
One thing is certain, December is going to be a game changer one way or the other, and it remains to be seen if the Eu is now prepared to “play ball”.
Carney voices his concerns
Mark Carney, the Governor of the Bank of England voiced his concerns over the effect of Brexit yesterday while releasing the results of the bank stress tests that have been performed by his inspections teams.
For me, the biggest takeaway from the stress tests was the fact that Carney felt the need to mention as part of the unknown events banks could face was the fines they could receive for wrongdoing! So, he is saying that essentially, he knows banks are going to be fined and even he seems to treat such events as the cost of doing business. Bitcoin anyone?
Carney went on to say that the effect of a “disorderly Brexit” would create economic pain. He talked of “slower growth, higher unemployment, higher inflation, lower sterling, higher interest rates, all things being equal.” If growth, currently at 1.5% YoY slows down any further, the U.K. will be looking at recession but in the “time honoured way” a devaluation of the currency will be the first remedy. Mr. Carney, who bears no blame at all for the Brexit driven issues facing the U.K. economy will be safely back in Canada before stagflation hits!
Kim yanks Trump’s chain
How much do these missiles cost?
North Korea is facing a very tough winter with food shortages and other economic hardships, yet their leader Kim Jong-un thinks nothing of firing another missile into the sea. Does he need to demonstrate any more to Donald Trump that he has the capability? The attention-grabbing act of firing a missile does, I suppose, add some credence to media announcements that Pyongyang has the capability to launch missiles that can reach the entire United States.
It is becoming inconceivable that President Trump can allow this to go on much further. Beijing while openly supporting measures to curb Kim’s nuclear proliferation is also most likely secretly goading him to continue, keeping Trump off balance.
The next move is Trump’s.