Sooo, they have a tentative Brexit agreement?

I've seen the crawlers on BBC/SKY, but I'm not sure exactly what's going on?  May has some sort of tentative agreement with the EU that she's going to run past her own Cabinet tomorrow, at the same time as the EU guy is making it available to the EU27?

Am I understanding this correctly?  I can't imagine that the EU is going to throw the Irish Border under the bus,  and the DUP won't agree to be treated differently from the rest of the UK, so....?  Eeehhhh?

But from RTE: https://www.rte.ie/news/brexit/2018/1113/1010667-brexit-deal/

"According to both sources, there will be one backstop to avoid a hard border on the island of Ireland.The backstop will come in the form of a temporary UK-wide customs arrangement, with specific provisions for Northern Ireland, which go deeper on the issue of customs and alignment on the rules of the single market than for the rest of the UK. It is understood the text has an agreed review mechanism. While the text is regarded as "stable", it is understood there is further shuttling between London and Brussels. RTÉ News understands that while the main backstop focuses on a UK-wide customs arrangement, there will be specific provisions within the text and within annexes for Northern Ireland, should the UK-wide arrangement not prove sufficient to avoid a hard border. "

I've seen the crawlers on BBC/SKY, but I'm not sure exactly what's going on?  May has some sort of tentative agreement with the EU that she's going to run past her own Cabinet tomorrow, at the same time as the EU guy is making it available to the EU27?

Am I understanding this correctly?  I can't imagine that the EU is going to throw the Irish Border under the bus,  and the DUP won't agree to be treated differently from the rest of the UK, so....?  Eeehhhh?

They’ve agreed some text. She’s already presented it to senior cabinet today. There’s backlash. She’ll be presenting it to the full cabinet tomorrow afternoon. If they approve (seems unlikely at this stage), then it’ll go to the EU parliament for a vote. If that’s approved then it’ll go to the full UK parliament for a “meaningful” vote.

If it doesn’t go through, then more than likely May is out. There’s a strong position that she should resign if it fails. Also a lot who do not want to accidentally trigger a leadership battle.

US markets are betting it won’t go through, and the ramifications of a blind or no deal Brexit would stall the EU economy, which is why EU exposed stocks are down. UK (and not EU) exposed stocks are off less on the premise there’ll be a line to snatch up that market share the EU has left on the table if it goes no deal.

Bit of a mess. It’s been clear for a year that this half in half out stuff wouldn’t go through. Should be an entertaining week or so.


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OY!

I'm glad I have plenty of popcorn in the house. Going to be a TV day tomorrow, I think. 

So, if she's out, who's next? Jeremy? Boris?

Who knows.

Joked with my wife that she should take over. If questioned on her experience, say, “preventing train wrecks seems a worthy skill for a UK PM, and Mrs May has been a train wreck. Plus American husband is an inside track to a quick trade deal. And I promise to make southern rail run on time.” She’d be a shoe in.

Honestly I think no one wants the job. I’ve said before... if the leave/remain vote is 50/50 and leave is split all along a spectrum of what leave should look like, then no matter what deal is reached it will just mathematically never have more than 25-30% support. Whoever is in the driver’s seat for that will take the blame. No one that actually wants to be PM beyond this where all the upside is from trade deals with the rest of the world, the last thing they want is to take the job right now.

Corbyn is smartly waiting in the wings hoping that blame extends beyond the PM to the whole Conservative party. Especially with working class areas that voted leave. Personally I don’t think that’ll work out for him, but it’s a smart play.

So again, who the hell knows. If they don’t kill her off & she doesn’t resign, there’s a chance she might kick along as a lame duck with leadership by committee dictating the terms.

Nothing to do but watch and see what turns out.


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The only sane choice is to call it off.

Europe has consistently expressed complete willingness.

The only sane choice is to call it off.

Europe has consistently expressed complete willingness.

Yeah, that’s not happening.


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The only sane choice is to call it off.

Europe has consistently expressed complete willingness.

Or have a new referendum. A lot of the OAPs that voted leave have died in the last two years. Bit morbid but true.

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US markets are betting it won’t go through, and the ramifications of a blind or no deal Brexit would stall the EU economy, which is why EU exposed stocks are down. UK (and not EU) exposed stocks are off less on the premise there’ll be a line to snatch up that market share the EU has left on the table if it goes no deal.
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This is funny, you think that if we exit with no deal it will "stall" the EU economy but there will be a giant line to trade with the UK?  Have you not heard about companies stockpiling supplies for no deal?  Giant truck parking lots being built near Dover?  Grocery stores saying that they don't actually have any storage space and there will be food shortages?  Diabetics being warned that they may not be able to get insulin?  That sounds like a pretty stalled economy to me.   If the EU were so concerned about their economy stalling, they wouldn't have forced TM to speak for 15 minutes after dinner at most conferences.  The UK needs Europe A LOT more than Europe needs the EU.

By the way, there's nothing stopping a line forming to "snatch up the market share".  So far, the line is pretty small except for the US wanting to sell us chlorinated chicken in return for opening up the NHS to be ripped off by big pharma.   

Or have a new referendum. A lot of the OAPs that voted leave have died in the last two years. Bit morbid but true.

It is a way forward. Leave should be required to produce a detailed plan. 

This is funny, you think that if we exit with no deal it will "stall" the EU economy but there will be a giant line to trade with the UK?  Have you not heard about companies stockpiling supplies for no deal?  Giant truck parking lots being built near Dover?  Grocery stores saying that they don't actually have any storage space and there will be food shortages?  Diabetics being warned that they may not be able to get insulin?  That sounds like a pretty stalled economy to me.   If the EU were so concerned about their economy stalling, they wouldn't have forced TM to speak for 15 minutes after dinner at most conferences.  The UK needs Europe A LOT more than Europe needs the EU.

By the way, there's nothing stopping a line forming to "snatch up the market share".  So far, the line is pretty small except for the US wanting to sell us chlorinated chicken in return for opening up the NHS to be ripped off by big pharma.

“The strong dollar also weighed on stocks. The US currency surged to a 16-month high because investors fear the European economy could stall if no Brexit deal is reached this week.”
https://www.cnn.com/2018/11/12/investing/stock-market-today-dow/index.html

Everything you’re talking about are short term problems that aren’t really problems.

There is zero possibility of a shortage of anything. It is simply that it might cost more. The only actual potential of any shortage of supply from the EU is if they took retaliatory measures against a net customer. And they might do that, cause they make lots of dumb decisions. So what happens if a store you’re loyal to treats you like crap and there are a hundred other stores along the street who would be happy to fill this need and would really really like to convert you to loyal customer of theirs? That big pharma you mention (as if the insulin supply in the EU is brewed up by hand in the basement of some mom & pop pharmacy - it’s already coming from big pharma), would be very happy to sell as much insulin as the country needs at the same prices.

The nature of the treaty is that the UK is not permitted to negotiate trade deals till fully out, and any third party country that engages in illicit talks before that risks retaliation from the EU. When Trump ignored that and floated hope at the UK both himself and through less official channels, then the EU real quickly was in Washington promising to buy up a bunch of soy beans and resolve some disputes.

Economics is real simple. Water flows to the lowest point. If there is unmet demand, and there is supply in the rest of the world capable of meeting it, then it will met at competitive prices. Governments aren’t actually capable of stopping that. They can limit it somewhat with a lot of effort and drive up prices so they can then selectively punish or reward who they want, but they can’t actually stop supply meeting demand no matter what they do. In this case, you have the hypothetical no-deal UK desperately wanting its demand met at reasonable prices, and the rest of the world desperately wanting to snatch up any market share they can from the EU. It’s not exactly rocket science.

Would there possibly be unwarranted fear, short term price increases, and a lot of logistical and administrative headaches while the supply chain adjusts? Sure. But it’s not catastrophic & then it does adjust and everything is fine.


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“The strong dollar also weighed on stocks. The US currency surged to a 16-month high because investors fear the European economy could stall if no Brexit deal is reached this week.”
https://www.cnn.com/2018/11/12/investing/stock-market-today-dow/index.html
Economics is real simple. Water flows to the lowest point. If there is unmet demand, and there is supply in the rest of the world capable of meeting it, then it will met at competitive prices. Governments aren’t actually capable of stopping that. They can limit it somewhat with a lot of effort and drive up prices so they can then selectively punish or reward who they want, but they can’t actually stop supply meeting demand no matter what they do. In this case, you have the hypothetical no-deal UK desperately wanting its demand met at reasonable prices, and the rest of the world desperately wanting to snatch up any market share they can from the EU. It’s not exactly rocket science.

The problem here is that when someone selectively uses Wealth of Nations, they always miss Smith's warnings:

A. a group  (cartels/monopolies) quickly forms to profit from and control the flow of water.
B. when it rains heavily in the mountains, half a million people drown downstream.

His warnings are not small points .

Free markets can not possibly exist. They are Santa.

“The strong dollar also weighed on stocks. The US currency surged to a 16-month high because investors fear the European economy could stall if no Brexit deal is reached this week.”
https://www.cnn.com/2018/11/12/investing/stock-market-today-dow/index.html

Everything you’re talking about are short term problems that aren’t really problems.

There is zero possibility of a shortage of anything. It is simply that it might cost more. The only actual potential of any shortage of supply from the EU is if they took retaliatory measures against a net customer. And they might do that, cause they make lots of dumb decisions. So what happens if a store you’re loyal to treats you like crap and there are a hundred other stores along the street who would be happy to fill this need and would really really like to convert you to loyal customer of theirs? That big pharma you mention (as if the insulin supply in the EU is brewed up by hand in the basement of some mom & pop pharmacy - it’s already coming from big pharma), would be very happy to sell as much insulin as the country needs at the same prices.

The nature of the treaty is that the UK is not permitted to negotiate trade deals till fully out, and any third party country that engages in illicit talks before that risks retaliation from the EU. When Trump ignored that and floated hope at the UK both himself and through less official channels, then the EU real quickly was in Washington promising to buy up a bunch of soy beans and resolve some disputes.

Economics is real simple. Water flows to the lowest point. If there is unmet demand, and there is supply in the rest of the world capable of meeting it, then it will met at competitive prices. Governments aren’t actually capable of stopping that. They can limit it somewhat with a lot of effort and drive up prices so they can then selectively punish or reward who they want, but they can’t actually stop supply meeting demand no matter what they do. In this case, you have the hypothetical no-deal UK desperately wanting its demand met at reasonable prices, and the rest of the world desperately wanting to snatch up any market share they can from the EU. It’s not exactly rocket science.

Would there possibly be unwarranted fear, short term price increases, and a lot of logistical and administrative headaches while the supply chain adjusts? Sure. But it’s not catastrophic & then it does adjust and everything is fine.


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Do you really believe there's no risk of a shortage of anything? Do you not rely on medication and food imported from Europe? If there are suddenly more customs checks required without sufficient staff and space then imports will slow down from all countries.

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The problem here is that when someone selectively uses Wealth of Nations, they always miss Smith's warnings:

A. a group  (cartels/monopolies) quickly forms to profit from and control the flow of water.
B. when it rains heavily in the mountains, half a million people drown downstream.

His warnings are not small points .

You think the rest of the world - both on a country and on a corporate level - in competition with each other to win UK business that used to belong to the EU would somehow ban together in cartels with their competitors in order to corner the global market for even some, much less all, goods that would be in demand in the UK and exploit that need plus their newfound control in violation of antitrust, collusion, fraud, and lots of other laws... along with the demand experienced by the UK... to gouge prices?

Aside from the fact such a thing would be ten kinds of illegal, cost more than they could gain, and land executives in prison... it’s also just as a practical matter impossible to achieve.

Even that aside, it is counter to their interests. The whole point of meeting demand in that sort of shock is not to get rich quick and get out. It is to entice UK demand to stick with them as the long term supplier, and to entice the UK govt to favorable trade terms.

They have to undercut the EU price plus tariff & barrier costs. They have to compete in an environment where every country is telling their companies to meet this need on favorable terms so they can parley it into a favorable trade deal, or else there will be consequences. And every company is trying to cut the throat of their competition to get in there cause this is a once a century opportunity to grab massive market share just sitting there begging to be taken and effectively abandoned by the prior holder.

There is a cartel in this situation exploiting the market. That would be the EU and their refusal to match global standards. Breaking the hold of that cartel over the market releases pent up supply functioning in fierce competition.

As to the second point... there are consequences to a flood of cheap supply. If 10m new houses came on the market at less than £200k, that’d be a good thing for affordability, but it’d also have big consequences for financial institutions holding mortgages & people who currently own homes.

There’s going to be pain. In the short term and the long.

If the US were to get the Ag terms it wants, it’d bring down food prices and increase variety, but it’d also industrialize UK Ag to compete.

In the short term to meet demand you may be accepting the FDA as harmonized and bringing in US approved drugs (alongside other non EU industrialized nations).

You might indeed take chickens free from salmonella because they’ve been disinfected with chlorine mist and thoroughly washed before shipping. It’s perfectly safe, as British food safety experts agree.

But yes, there will be pain. Some things, like agriculture, will transform. You won’t mind some of that, but other aspects you may hate. Some companies will go out of business when exposed to global competition. Some entire industries will go away cause they make no economic sense without the protective barriers of the EU around them. That’s the pain of progress.

But then whole other companies and industry and finance will rise up in their place. And things, in the long term, will be massively better than they are now.

In between those two things, there will be some amount of pain. But that temporary pain is the price of getting to the other side. I know it’s scary. I know it’s chaotic. And it’ll take an enormous amount of hard work to get through it. The point is the end state is worth the pain.

Everything the PM has done since taking office has been about decreasing that pain. Even trading time like pulling the plaster off slowly rather than ripping it off and being done with it. In fact, that’s the plan she’s presenting now. The problem for the opposition is it either doesn’t get all the way to the other side in the end or it extends the moderate pain out so long it’s worse than ripping it all at once.

We’ll see what they do with it. The chance of calling it off or a second referendum though? That’s pretty much nonexistent. It doesn’t matter what’s possible. Brexit in whatever form is already priced in.


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Do you really believe there's no risk of a shortage of anything? Do you not rely on medication and food imported from Europe? If there are suddenly more customs checks required without sufficient staff and space then imports will slow down from all countries.

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Why can those things not be imported from dozens of other places?

The UK doesn’t have to suddenly impose anything it doesn’t want to on inbound supplies. And countries don’t check departing cargo. There should be no issue on the supply side unless the UK creates it of the EU embargoes the flow of those supplies. If they do, then every company and country capable of meeting those demands is chomping at the bit to undercut the EU and take over those customers for the long term.

The real issue is on the exporter side. UK goods going to the EU will be exposed to a tariff and subject to customs checks. If you’ve seen the wrap around lanes exiting Gibraltar to Spain due to their sometimes playing games, then it should be clear that the EU can and probably will try to create a parking lot on the UK side trying to get into the EU, all while EU companies try to swoop in and grab the business with reliable supply and no tariff.

That becomes a question if the rest of the world will buy those exports and on what terms. They’re going to give the best terms possible to entice a favorable trade agreement. If the demand exists or not is a product by product thing. Some of that is going to be how fast can UK companies retool to meet global demand.

That can impact jobs in the short term, but it’ll work itself out for the better in the long term. Supply though should not be a problem. That’s assuming a competent govt behaving in the rational self interest if the country. And I do understand why depending on their competence and work ethic to smooth things out quickly would cause some well placed consternation.


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I think that if the UK crashes out without a trade deal there will be shortages, in the mid-range term. Local supplies will be used up, but the idiocy inherent in the bureaucracy will make importing replacements boggy and slow.  We have stockpiled what medications we can, simply due to lack of faith in the ability of the machine, which creaks by now on a skeleton staff, to process the paperwork.

When you need medications on an ongoing daily basis, you cannot wait to see how well they'll sort it out.