Dumb question

lisyloo

How much is the FTSE down since the start of the financial year? That might give a clearer picture.

0.516%

using 4/1 6242.30 vs 6210.28 now (yahoo.com)

I don't think that gives any clarity at all given that markets can move +/- 3% in a single day.

Anyway who do you think the general public will listen to? Soros or Beckham? :-)

westernpromise

michaels wrote: »

Speculator talks up his position shock - of course the arts grads at the BBC treat fianace as some sort of quasi-religious high art and buy a VI as an expert opinion every time.

That's exactly what I thought: Soros must be long sterling.

It strikes me that the government is at risk of a 1992-like event here though. The consequences of White Wednesday were welcome to many people in the medium term. But the government of the day got no credit at all for the happy results, because they happened not because of the government's economic policies but over the dead body of those policies - which were ERM membership at an over-valued level and 14% mortgage rates for ever. That got blown out of the water so we had the City to thank for a recovery the government had done nothing but hinder.

If we exit the EU, sterling will fall (a bit, probably), inflation will go up, interest rates will go up, so house prices will come down. The latter two consequences together will make it less attractvie than before to speculate in property, because cash on deposit will start to earn a return again just as property starts to look more risky.

These would be welcome consequences to many, and would mean the government could let house prices go where they will while blaming the stupid Leave voters for it all. The risk is that if "it all" starts to look good, it won't be the government that gets the credit.

tincans6

michaels wrote: »

The markets moved from pricing in a possible to brexit to pricing it as an outside bet today: total move less than 2%. I think this gives a better idea of the order of magnitude of any brexit effect on the currency and stock markets.

Michael,

you often talk a lot of sense, but you are losing the plot on this issue.

Any comparison with the ERM exit is fatuous. There may be some export benefit from a falling exchange rate - although I doubt that this will proove much of a blessing in the event of the turmoil across all markets in the event of Brexit.

People forget that after September 1992 interest rates fell from 10% to 5% within a year which made a huge difference to both business investment and domestic consumption.

Any cut from 0.5% will make no difference at all.

In addition, Public net debt was about 30% at the time rather than 85%.

buglawton

Another of Soros' reliable predictions was that Britain would be better off with the single currency.

Kohoutek

michaels wrote: »

Speculator talks up his position shock - of course the arts grads at the BBC treat fianace as some sort of quasi-religious high art and buy a VI as an expert opinion every time.

Point taken - but I haven't seen any arguments that Brexit will help the pound.

I think what he says about capital outflows during the 2 year period of uncertainty if we vote for Brexit almost certainly must be right.

Generali

buglawton wrote: »

Another of Soros' reliable predictions was that Britain would be better off with the single currency.

How do we know that it wouldn't have been? Germany seems to be doing well out of it for example.

mwpt

Generali wrote: »

How do we know that it wouldn't have been? Germany seems to be doing well out of it for example.

Up until now I have been very anti the Euro. I still am but recently someone made a point which I am not quite able to refute.

My stance has been the a single currency does not allow poorer countries to devalue/print to ease debt payments and/or compete on exports. I think that is pretty standard stuff, nothing too controversial.

However, the point that got me thinking is why countries needed this at all. Why can they not compete on actual productivity? Why can they not produce different things? Surely if a devalued currency but the same low productivity, you are still going to be only as well off as you would have been otherwise?

tincans6

mwpt wrote: »

However, the point that got me thinking is why countries needed this at all. Why can they not compete on actual productivity? Why can they not produce different things? Surely if a devalued currency but the same low productivity, you are still going to be only as well off as you would have been otherwise?

Its a lot easier and less painful in the short run to devalue.

The fixed currency route means the only short to medium term solution is to reduce wages / public spending and go through a whole lot of deflationary pain.

CLAPTON

Generali wrote: »

How do we know that it wouldn't have been? Germany seems to be doing well out of it for example.

if we can't answer a question like that then how can anyone believe any econmic projections about what would happen in the event of brexit?

Generali

CLAPTON wrote: »

if we can't answer a question like that then how can anyone believe any econmic projections about what would happen in the event of brexit?

Because that is the fundamental limitation of most economics: you can't run a study where one UK joins the Euro and another doesn't. It's not a secret.

If you simply dismiss all economics then fair enough but you can't start making claims about what might happen to house prices in London if 3 million migrants had or hadn't arrived or claim to understand how the price of Ferraris is set if you don't believe economics.