19 ms·

$1T is leaving Britain because of Brexit

PhasmaFelis 8y ago
> Banks and other financial companies have shifted at least £800 million ($1 trillion) worth of assets Hang on, that's not right. Do they mean "£800 billion ($1 trillion)", or "£800 million ($1 billion)"?
- arethuza 8y ago
  Seems to have been fixed: "£800 billion ($1 trillion)"
  - minikites 8y ago
    Perhaps related to https://en.wikipedia.org/wiki/Long_and_short_scales https://en.wikipedia.org/wiki/Long_and_short_scales?
    - Symbiote 8y ago
      Unlikely, the long scale form has been obsolete in Britain for decades. I've heard people say things like "thousand million", but I've never heard "milliard", and never heard "billion" to mean 10¹².
  - LeonM 8y ago
    Yep, this was added at the end of the article: > Correction: An earlier version of this story incorrectly stated the value of assets moving in pounds.
- pjc50 8y ago
  When I looked at it they'd fixed it to £800 billion. I was wondering if someone had accidentally used the old UK billion meaning a "million million". (Whole article is very likely to get flagged off, btw)
  - lorenzhs 8y ago
    I don't know why this was downvoted, but the UK officially used the "long scale" (million = 10^6, milliard = 10^9, billion = 10^12) until 1974, although the "short scale" (billion = 10^9, trillion = 10^12) had become increasingly popular before that: https://en.wikipedia.org/wiki/Long_and_short_scales#Use https://en.wikipedia.org/wiki/Long_and_short_scales#Use. In most of Europe, the long scale is still used today.
    - deleted 8y ago
      [deleted]
myrandomcomment 8y ago
No surprise. Passporting (allow banks to operate in all members of the EU if they are licensed in one member) is a key to all of the banks operations. Every bank based in London for that purpose now has to open a regulated branch in an EU member. The next thing to kill the market in London will be the movement of Euro clearing to an EU member. Brexit is a self inflicted shot to the head. The number of people that supported leave and lacked understanding of all the ties of the businesses that operate in the UK but sell in the EU was amazing. All the car manufacturing will be the next to move. There goes all the good jobs that the leave camp said were being stolen by immigration. Edit: typo and to clarify I am not an UK or EU citizen, only outside observer of the train wreck.
- lazyjones 8y ago
  > Every bank based in London for that purpose now has to open a regulated branch in an EU member. How many of them don't have one yet? Also, every bank based in the EU will have to open a regulated branch in UK in order to operate in this large market. > The number of people that supported leave and lacked understanding of all the ties of the businesses that operate in the UK but sell in the EU was amazing. Perhaps they're just not trying to see only the drawbacks and ignore successful non-members in Europe like Switzerland and Norway.
  - arethuza 8y ago
    Norway and Switzerland have trade deals in place with the EU - which we don't yet, and by all accounts are unlikely to have in place before we exit.
  - SmellyGeekBoy 8y ago
    The UK is the 5th biggest economy in the world. Switzerland is 20th and Norway 30th. The UK has traditionally punched well above its weight economically, it will be interesting to see if we become just another Switzerland or Norway after Brexit rather than the world economic power that we are today. Being the banking capital of the EU is a huge contributing factor to that position, btw.
mbrumlow 8y ago
Lots of things are going to change. Things worked before the EU. I am sure things will continue to work after the exit.
- rsynnott 8y ago
  Well, for some value of 'worked'. Few people would actually want to go back to early 70s Britain. And note that the UK was in EFTA back then; it was not as isolated as it will be in a no-deal scenario.
- chillacy 8y ago
  That was when the other EU countries weren’t a giant block though, it’ll be harder to do things like pit France against Germany to cut a better deal.
- inflagranti 8y ago
  So you're happy to have no PC to access Hacker News, for sure no Smartphone, not even a "dumb" mobile phone. No YouTube, Netflix, Amazon. Yes things worked back then but I doubt many people would want to roll back all technical progress since then. Brexit is the legal equivalent to that and any deal IMHO can merely be an attempt in damage limitation at least for the foreseeable future.
- pjc50 8y ago
  This is an area with little effect on the average citizen, but I have to say I'd never have expected it to be a Tory government to exile financial services from London. No, things that aren't yet determined how or if they are going to "work" are those relating to shipment of food and medicine. There is a very high risk of short-term chaos. Considering that in 2018 there were a few days without fresh food simply because of two feet of snow, people are really underestimating the potential risks here.
- cm2187 8y ago
  And London was a major financial centre well before the creation of the EU.
  - 8y ago
fenk85 8y ago
They should put that on a side of a red bus and drive it around
GreaterFool 8y ago
> have shifted at least £800 billion ($1 trillion) worth of assets out of the country And what's the significance of that? Suppose I had $100 in a bank in UK and I moved it to a bank in Germany. Neither country is better or worse because of that. The article doesn't bother to explain the ramifications. Deals are made in UK because English law is really, really good. Having to maintain offices in EU will surely increase the capital requirements of the banks but it's not a straightforward "Britain is XYZ poorer because banks shuffled some stuff around" situation.
- sabertoothed 8y ago
  > Deals are made in UK because English law is really, really good. Can you elaborate?
  - hkt 8y ago
    We have reliable courts which are known for their independence. We also have alternatives to courts - called Alternative Dispute Resolution mechanisms - which operate out of London mostly, and are known to be free of political interference etc. See http://www.lcia.org/ http://www.lcia.org/ for an example. You'd write an ADR into a contract and use these people if you didn't want to use our courts. And our courts respect this arrangement if it is agreed upon and treated properly. It's often used between parties even where nobody involved is a British company or person.
    - vmarsy 8y ago
      So this is like Arbitration in the US? In the UK, how are they "known to be free of political interference etc."? Is it easy for people to contest a decision that looks unfair and bring it to the regular courts ?
      - tlarkworthy 8y ago
        Yes since the Magna Carta of 1215
lazyjones 8y ago
Is that good or bad news for Britons? Most tangible assets won't be leaving any time soon and nobody but banks will miss this amount in the banks' accounts. It's very likely that real assets, like real estate will become a little more affordable. Car registrations fell here in Austria as well, despite good economic indicators, it's not a big deal.
- arethuza 8y ago
  "real estate will become a little more affordable" For many people in the UK any decrease in house prices is regarded as a very bad thing indeed.
  - pc86 8y ago
    Only for people using real estate as an investment or their primary store of wealth.
    - zepto 8y ago
      Almost everyone who owns their home has real estate as their ‘primary store of wealth’.
    - jen20 8y ago
      In 2015-16, 62.9% of UK households were owner-occupied. A drop in house prices (which would be incredibly welcome for me, as a prospective purchaser!) would lead to negative equity for a significant number of voters in the south east and especially the south west - no political party wants to own that, though both major parties in the UK bear responsibility for it.
      - lazyjones 8y ago
        > would lead to negative equity for a significant number of voters in the south east and especially the south west This argument requires some hard numbers to make. A significant number of owners bought their homes a long time ago and won't be affected. A significant number of owners live in areas where prices were not affected by EU investment. A significant number of NEW prospective owners will have access to lower prices in currently extremely crowded markets. So, less alarmism, more facts and numbers please.
Zigurd 8y ago
This is 21st c. social media-based warfare. Damaging the West with brexit and right wing nationalists is as strategically effective as a victory in a shooting war.
- dep_b 8y ago
  > Damaging the West with [...] right wing nationalists Ya if only we were as open minded as China and Russia we would win this war.
  - Zigurd 8y ago
    Putin loves, and supports, the right wing nationalists, and they love him back. https://www.theatlantic.com/international/archive/2017/01/putin-trump-le-pen-hungary-france-populist-bannon/512303/ https://www.theatlantic.com/international/archive/2017/01/pu...
  - 8note 8y ago
    are Muslim bans open minded?
    - dep_b 8y ago
      I don't think the Muslim bans in China are open minded. Of course not.
hkt 8y ago
It really is regrettable that my country has decided to blow its own head off. Finance was pretty much all we had after Thatcher "strategically" destroyed manufacturing and placed the entire country outside of London into a state of "managed decline". C'est la vie. Maybe I'll move to Ireland.
cm2187 8y ago
The article doesn't mention how much of these assets will be backed to back to an entity in the UK, effectively making the shift of the assets a mere operational step. And working in the industry, I expect the number to be substantial.
onetimemanytime 8y ago
IMO it's pretty dumb of the British. You can't join and leave just like that, everything is integrated with EU. Now, go ahead and undo it because a few % more voted to leave at a certain point. These decisions to join/leave should be like adding a new Constitutional Amendment in USA, very hard to do, either way and require super-majorities.
dillius 8y ago
What does this have to do with computer science and entrepreneurship? I don't come here for a bunch of political whining.
GreeniFi 8y ago
I was reminded of this quote from The Big Short at the weekend: ”I have a feeling, in a few years people are going to be doing what they always do when the economy tanks. They will be blaming immigrants and poor people”. (Mark Baum). Many people feel that austerity policies post the 2008 crash distilled feelings which led to Brexit. If Brexit leads to another crunch, one scenario is a lot more right-wing politics, not less. This is obviously not necessarily true, but the possibility made me very sad - and makes one wonder whether Brexit will trigger a spiraling political and economic crisis in the UK, not resolve one.
kingkawn 8y ago
It is a meaningful coda to the history of the British empire that they now choose willingly to descend into underdevelopment and poverty.
- Arwill 8y ago
  The fact that the British empire existed is certainly a reason why they were willing to vote for Brexit. With a bit lesser ego they might have stayed in the EU.
olivermarks 8y ago
There is a massive 'fear campaign' drip dripping dire news in the UK every day if the people don't reconsider leaving a federated europe. The EU is well past its sell-buy date, won't reform and globalization has taken full advantage of its undemocratic structure for offshore commercial gain. The divide and rule aspects of the UK EU referendum results are being exploited to the full. Like the last US election there is no good result for the English people - remaining or leaving are both going to have an ugly side. The City of London rules the financial world and enables incredible sums to float offshore via trusts and opaque corporate setups. What we are seeing is a further divide between the haves and have nots. https://youtu.be/np_ylvc8Zj8 https://youtu.be/np_ylvc8Zj8 < spiders web documentary 'At the demise of empire, City of London financial interests created a web of secrecy jurisdictions that captured wealth from across the globe and hid it in a web of offshore islands. Today, up to half of global offshore wealth is hidden in British jurisdictions and Britain and its dependencies are the largest global players in the world of international finance.' This makes the consumer banks and FS firms shuffling fiat currencies around europe a tiny drop in the ocean
- olivermarks 8y ago
  The Cayman Islands are the 5th largest financial centre worldwide, via City of London http://blogs.lse.ac.uk/usappblog/2017/11/11/the-cayman-conundrum-why-is-one-tiny-archipelago-the-largest-financial-centre-in-latin-america-and-the-caribbean/ http://blogs.lse.ac.uk/usappblog/2017/11/11/the-cayman-conun...
GoodJokes 8y ago
Brexit is a poorly executed idea in my opinion. The idea to leave the EU, at its core isn't the worst. The EU is highly undemocratic, more so by the day, and takes a lot of sovereignty away from its member countries. More and more economic policy is being dictated by a non-representative body based in Brussels. There is increasingly no way to challenge the neoliberal status quo set by Brussels. This is disconcerting in the face of late capitalism and its constant boom and bust cycles. What the EU did to Greece is gross. There will be a unpredictable vaccuum to fill in the UK. That is the scary part to me. Either the far right is going to fill it, or hopefully the labour party, which just might be able to usher in a less unequal society than before Brexit. Don't be sad for banks. Banks are horrible and oppressive. There will be economic pain, but lets not hold up super problematic institutions because of it.
nwah1 8y ago
Even if the end result of Brexit would be neutral in any circumstance, it is entirely possible that prolonged uncertainty would be bad, considering the aphorism that "markets hate uncertainty." Although, uncertainty doesn't seem to be a big deal in bull markets, so it could be contextual.
saosebastiao 8y ago
The article implies through its journalistic voice that this is objectively bad for GB. The fact that capital has left the country does not have any implication towards the rationality of that move. Various questions to ponder: 1) If this is just capital moving around within their own respective due to legal jurisdictional changes, this may be rational and may not even matter at all. Sometimes you change your behavior due to a change in rules but it affects you neither positively nor negatively. 2) If capital is leaving due to economic fears of leaving the EU, it may be entirely irrational. It has yet to be seen the long term impacts of leaving the EU. It isn't even a settled matter as to whether being a part of the EU is a good thing. Switzerland has done just fine without the EU, Greece has made off like bandits by being a member of the EU, and Germany has likely slowed their potential economic growth by being tied to countries like Greece via the EU. 3) Capital system geographies are surprisingly robust to change. It took centuries for capital systems to move away from Venice and later the low countries. Those capital systems survived massive recessions, multiple unprecedented geopolitical shifts, and numerous invasions and wars. They didn't die because of political turmoil or economic turmoil, they died because other regions learned from them and incrementally improved on their innovations. Compared to the level of turmoil seen in Europe throughout the 16th-19th century, Brexit looks like a walk in the park. I hold zero opinions on whether Brexit is good for Britain. But economically speaking, I don't see much to fear. I haven't seen much indication that they are trying to destroy their trade regime that was established by default through their membership in the EU, which means that it is still effectively a single market. They already have their own currency and it was already free floating. The banking industry may be prominent in the UK, but all the banks were already multinational and headquartered in various countries to begin with; HSBC isn't losing out on EU business any more than Citibank is. Why is everybody running around like the sky is falling?
- 2-chainz 8y ago
  Agreed, economics is very finicky and hard to predict with such a high degree of confidence at this scale of complexity. There is a lot of sensationalism and overreacting but until this actually happens and there is time for the market to stabilize it is impossible to know for sure whether this is a net good or net bad.
bayesian_horse 8y ago
It really looks like they are going through with it. Up to a couple months ago I almost expected the Brexit to be cancelled. I wonder when Britain will try to get back into the EU. It would take the swallowing of a lot of pride on the British side, but basically there is already a majority against the current Brexit conditions, pretty soon there will be a majority for remaining in the EU, period.

> Banks and other financial companies have shifted at least £800 million ($1 trillion) worth of assets Hang on, that's not right. Do they mean "£800 billion ($1 trillion)", or "£800 million ($1 billion)"?

arethuza 8y ago
Seems to have been fixed: "£800 billion ($1 trillion)"
- minikites 8y ago
  Perhaps related to https://en.wikipedia.org/wiki/Long_and_short_scales https://en.wikipedia.org/wiki/Long_and_short_scales?
  - Symbiote 8y ago
    Unlikely, the long scale form has been obsolete in Britain for decades. I've heard people say things like "thousand million", but I've never heard "milliard", and never heard "billion" to mean 10¹².
- LeonM 8y ago
  Yep, this was added at the end of the article: > Correction: An earlier version of this story incorrectly stated the value of assets moving in pounds.
pjc50 8y ago
When I looked at it they'd fixed it to £800 billion. I was wondering if someone had accidentally used the old UK billion meaning a "million million". (Whole article is very likely to get flagged off, btw)
- lorenzhs 8y ago
  I don't know why this was downvoted, but the UK officially used the "long scale" (million = 10^6, milliard = 10^9, billion = 10^12) until 1974, although the "short scale" (billion = 10^9, trillion = 10^12) had become increasingly popular before that: https://en.wikipedia.org/wiki/Long_and_short_scales#Use https://en.wikipedia.org/wiki/Long_and_short_scales#Use. In most of Europe, the long scale is still used today.
  - deleted 8y ago
    [deleted]

myrandomcomment 8y ago

No surprise. Passporting (allow banks to operate in all members of the EU if they are licensed in one member) is a key to all of the banks operations. Every bank based in London for that purpose now has to open a regulated branch in an EU member. The next thing to kill the market in London will be the movement of Euro clearing to an EU member. Brexit is a self inflicted shot to the head. The number of people that supported leave and lacked understanding of all the ties of the businesses that operate in the UK but sell in the EU was amazing. All the car manufacturing will be the next to move. There goes all the good jobs that the leave camp said were being stolen by immigration. Edit: typo and to clarify I am not an UK or EU citizen, only outside observer of the train wreck.

lazyjones 8y ago
> Every bank based in London for that purpose now has to open a regulated branch in an EU member. How many of them don't have one yet? Also, every bank based in the EU will have to open a regulated branch in UK in order to operate in this large market. > The number of people that supported leave and lacked understanding of all the ties of the businesses that operate in the UK but sell in the EU was amazing. Perhaps they're just not trying to see only the drawbacks and ignore successful non-members in Europe like Switzerland and Norway.
- arethuza 8y ago
  Norway and Switzerland have trade deals in place with the EU - which we don't yet, and by all accounts are unlikely to have in place before we exit.
- SmellyGeekBoy 8y ago
  The UK is the 5th biggest economy in the world. Switzerland is 20th and Norway 30th. The UK has traditionally punched well above its weight economically, it will be interesting to see if we become just another Switzerland or Norway after Brexit rather than the world economic power that we are today. Being the banking capital of the EU is a huge contributing factor to that position, btw.

mbrumlow 8y ago

Lots of things are going to change. Things worked before the EU. I am sure things will continue to work after the exit.

rsynnott 8y ago
Well, for some value of 'worked'. Few people would actually want to go back to early 70s Britain. And note that the UK was in EFTA back then; it was not as isolated as it will be in a no-deal scenario.
chillacy 8y ago
That was when the other EU countries weren’t a giant block though, it’ll be harder to do things like pit France against Germany to cut a better deal.
inflagranti 8y ago
So you're happy to have no PC to access Hacker News, for sure no Smartphone, not even a "dumb" mobile phone. No YouTube, Netflix, Amazon. Yes things worked back then but I doubt many people would want to roll back all technical progress since then. Brexit is the legal equivalent to that and any deal IMHO can merely be an attempt in damage limitation at least for the foreseeable future.
pjc50 8y ago
This is an area with little effect on the average citizen, but I have to say I'd never have expected it to be a Tory government to exile financial services from London. No, things that aren't yet determined how or if they are going to "work" are those relating to shipment of food and medicine. There is a very high risk of short-term chaos. Considering that in 2018 there were a few days without fresh food simply because of two feet of snow, people are really underestimating the potential risks here.
cm2187 8y ago
And London was a major financial centre well before the creation of the EU.
- 8y ago

fenk85 8y ago

They should put that on a side of a red bus and drive it around

GreaterFool 8y ago

> have shifted at least £800 billion ($1 trillion) worth of assets out of the country And what's the significance of that? Suppose I had $100 in a bank in UK and I moved it to a bank in Germany. Neither country is better or worse because of that. The article doesn't bother to explain the ramifications. Deals are made in UK because English law is really, really good. Having to maintain offices in EU will surely increase the capital requirements of the banks but it's not a straightforward "Britain is XYZ poorer because banks shuffled some stuff around" situation.

sabertoothed 8y ago
> Deals are made in UK because English law is really, really good. Can you elaborate?
- hkt 8y ago
  We have reliable courts which are known for their independence. We also have alternatives to courts - called Alternative Dispute Resolution mechanisms - which operate out of London mostly, and are known to be free of political interference etc. See http://www.lcia.org/ http://www.lcia.org/ for an example. You'd write an ADR into a contract and use these people if you didn't want to use our courts. And our courts respect this arrangement if it is agreed upon and treated properly. It's often used between parties even where nobody involved is a British company or person.
  - vmarsy 8y ago
    So this is like Arbitration in the US? In the UK, how are they "known to be free of political interference etc."? Is it easy for people to contest a decision that looks unfair and bring it to the regular courts ?
    - tlarkworthy 8y ago
      Yes since the Magna Carta of 1215

lazyjones 8y ago

Is that good or bad news for Britons? Most tangible assets won't be leaving any time soon and nobody but banks will miss this amount in the banks' accounts. It's very likely that real assets, like real estate will become a little more affordable. Car registrations fell here in Austria as well, despite good economic indicators, it's not a big deal.

arethuza 8y ago
"real estate will become a little more affordable" For many people in the UK any decrease in house prices is regarded as a very bad thing indeed.
- pc86 8y ago
  Only for people using real estate as an investment or their primary store of wealth.
  - zepto 8y ago
    Almost everyone who owns their home has real estate as their ‘primary store of wealth’.
  - jen20 8y ago
    In 2015-16, 62.9% of UK households were owner-occupied. A drop in house prices (which would be incredibly welcome for me, as a prospective purchaser!) would lead to negative equity for a significant number of voters in the south east and especially the south west - no political party wants to own that, though both major parties in the UK bear responsibility for it.
    - lazyjones 8y ago
      > would lead to negative equity for a significant number of voters in the south east and especially the south west This argument requires some hard numbers to make. A significant number of owners bought their homes a long time ago and won't be affected. A significant number of owners live in areas where prices were not affected by EU investment. A significant number of NEW prospective owners will have access to lower prices in currently extremely crowded markets. So, less alarmism, more facts and numbers please.

Zigurd 8y ago

This is 21st c. social media-based warfare. Damaging the West with brexit and right wing nationalists is as strategically effective as a victory in a shooting war.

dep_b 8y ago
> Damaging the West with [...] right wing nationalists Ya if only we were as open minded as China and Russia we would win this war.
- Zigurd 8y ago
  Putin loves, and supports, the right wing nationalists, and they love him back. https://www.theatlantic.com/international/archive/2017/01/putin-trump-le-pen-hungary-france-populist-bannon/512303/ https://www.theatlantic.com/international/archive/2017/01/pu...
- 8note 8y ago
  are Muslim bans open minded?
  - dep_b 8y ago
    I don't think the Muslim bans in China are open minded. Of course not.

hkt 8y ago

It really is regrettable that my country has decided to blow its own head off. Finance was pretty much all we had after Thatcher "strategically" destroyed manufacturing and placed the entire country outside of London into a state of "managed decline". C'est la vie. Maybe I'll move to Ireland.

cm2187 8y ago

The article doesn't mention how much of these assets will be backed to back to an entity in the UK, effectively making the shift of the assets a mere operational step. And working in the industry, I expect the number to be substantial.

onetimemanytime 8y ago

IMO it's pretty dumb of the British. You can't join and leave just like that, everything is integrated with EU. Now, go ahead and undo it because a few % more voted to leave at a certain point. These decisions to join/leave should be like adding a new Constitutional Amendment in USA, very hard to do, either way and require super-majorities.

dillius 8y ago

What does this have to do with computer science and entrepreneurship? I don't come here for a bunch of political whining.

GreeniFi 8y ago

I was reminded of this quote from The Big Short at the weekend: ”I have a feeling, in a few years people are going to be doing what they always do when the economy tanks. They will be blaming immigrants and poor people”. (Mark Baum). Many people feel that austerity policies post the 2008 crash distilled feelings which led to Brexit. If Brexit leads to another crunch, one scenario is a lot more right-wing politics, not less. This is obviously not necessarily true, but the possibility made me very sad - and makes one wonder whether Brexit will trigger a spiraling political and economic crisis in the UK, not resolve one.

kingkawn 8y ago

It is a meaningful coda to the history of the British empire that they now choose willingly to descend into underdevelopment and poverty.

Arwill 8y ago
The fact that the British empire existed is certainly a reason why they were willing to vote for Brexit. With a bit lesser ego they might have stayed in the EU.

olivermarks 8y ago

There is a massive 'fear campaign' drip dripping dire news in the UK every day if the people don't reconsider leaving a federated europe. The EU is well past its sell-buy date, won't reform and globalization has taken full advantage of its undemocratic structure for offshore commercial gain. The divide and rule aspects of the UK EU referendum results are being exploited to the full. Like the last US election there is no good result for the English people - remaining or leaving are both going to have an ugly side. The City of London rules the financial world and enables incredible sums to float offshore via trusts and opaque corporate setups. What we are seeing is a further divide between the haves and have nots. https://youtu.be/np_ylvc8Zj8 https://youtu.be/np_ylvc8Zj8 < spiders web documentary 'At the demise of empire, City of London financial interests created a web of secrecy jurisdictions that captured wealth from across the globe and hid it in a web of offshore islands. Today, up to half of global offshore wealth is hidden in British jurisdictions and Britain and its dependencies are the largest global players in the world of international finance.' This makes the consumer banks and FS firms shuffling fiat currencies around europe a tiny drop in the ocean

olivermarks 8y ago
The Cayman Islands are the 5th largest financial centre worldwide, via City of London http://blogs.lse.ac.uk/usappblog/2017/11/11/the-cayman-conundrum-why-is-one-tiny-archipelago-the-largest-financial-centre-in-latin-america-and-the-caribbean/ http://blogs.lse.ac.uk/usappblog/2017/11/11/the-cayman-conun...

GoodJokes 8y ago

Brexit is a poorly executed idea in my opinion. The idea to leave the EU, at its core isn't the worst. The EU is highly undemocratic, more so by the day, and takes a lot of sovereignty away from its member countries. More and more economic policy is being dictated by a non-representative body based in Brussels. There is increasingly no way to challenge the neoliberal status quo set by Brussels. This is disconcerting in the face of late capitalism and its constant boom and bust cycles. What the EU did to Greece is gross. There will be a unpredictable vaccuum to fill in the UK. That is the scary part to me. Either the far right is going to fill it, or hopefully the labour party, which just might be able to usher in a less unequal society than before Brexit. Don't be sad for banks. Banks are horrible and oppressive. There will be economic pain, but lets not hold up super problematic institutions because of it.

nwah1 8y ago

Even if the end result of Brexit would be neutral in any circumstance, it is entirely possible that prolonged uncertainty would be bad, considering the aphorism that "markets hate uncertainty." Although, uncertainty doesn't seem to be a big deal in bull markets, so it could be contextual.

saosebastiao 8y ago

The article implies through its journalistic voice that this is objectively bad for GB. The fact that capital has left the country does not have any implication towards the rationality of that move. Various questions to ponder: 1) If this is just capital moving around within their own respective due to legal jurisdictional changes, this may be rational and may not even matter at all. Sometimes you change your behavior due to a change in rules but it affects you neither positively nor negatively. 2) If capital is leaving due to economic fears of leaving the EU, it may be entirely irrational. It has yet to be seen the long term impacts of leaving the EU. It isn't even a settled matter as to whether being a part of the EU is a good thing. Switzerland has done just fine without the EU, Greece has made off like bandits by being a member of the EU, and Germany has likely slowed their potential economic growth by being tied to countries like Greece via the EU. 3) Capital system geographies are surprisingly robust to change. It took centuries for capital systems to move away from Venice and later the low countries. Those capital systems survived massive recessions, multiple unprecedented geopolitical shifts, and numerous invasions and wars. They didn't die because of political turmoil or economic turmoil, they died because other regions learned from them and incrementally improved on their innovations. Compared to the level of turmoil seen in Europe throughout the 16th-19th century, Brexit looks like a walk in the park. I hold zero opinions on whether Brexit is good for Britain. But economically speaking, I don't see much to fear. I haven't seen much indication that they are trying to destroy their trade regime that was established by default through their membership in the EU, which means that it is still effectively a single market. They already have their own currency and it was already free floating. The banking industry may be prominent in the UK, but all the banks were already multinational and headquartered in various countries to begin with; HSBC isn't losing out on EU business any more than Citibank is. Why is everybody running around like the sky is falling?

2-chainz 8y ago
Agreed, economics is very finicky and hard to predict with such a high degree of confidence at this scale of complexity. There is a lot of sensationalism and overreacting but until this actually happens and there is time for the market to stabilize it is impossible to know for sure whether this is a net good or net bad.

bayesian_horse 8y ago

It really looks like they are going through with it. Up to a couple months ago I almost expected the Brexit to be cancelled. I wonder when Britain will try to get back into the EU. It would take the swallowing of a lot of pride on the British side, but basically there is already a majority against the current Brexit conditions, pretty soon there will be a majority for remaining in the EU, period.