STERLING & THE BREXIT FACTOR: a public meeting of twisted minds

Why the attack on Sterling is a public assassination not a secret conspiracy

Some of the lurid descriptions available on business sites and biznews television about Sterling at the moment are quite something – ‘unprecedented’, ‘catastrophic’, ‘unique’ and so forth.

But my main observation is that it’s unwarranted. Some circumstantial evidence first:

  1. Bloomberg, CNN, and Reuters yesterday didn’t feature Brexit at all. In the global context, Brexit is not that big a deal.
  2. There are 121 reasons why Brexit would be good for the UK economy, zero for staying in the EU on the same basis…on the contrary…
  3. The economic situation in the eurozone has declined further cf the UK, but the euro is strengthening against Sterling.
  4. Morgan Stanley, Citigroup and Goldman Sachs have variously forecast forecast 5-15%  falls in the Pound after a vote for Brexit. None of them suggested that this would happen beforehand based on the actions of one man.
  5. The overwhelming majority of US and major world bourse banking firms are opposed to Brexit, and this kind of geopolitical attack has become increasingly commonplace since Soros used it to short Sterling thirty years ago.
  6. Today, Mortgage approvals were up 33% compared to a year ago – a firm sign to buy not sell Sterling. It hasn’t rallied: the decline is now back on again.
  7. Significantly, all the eurozone stock market indices are are doing far worse than the FTSE is today – the CAC, Da and Eurostoxx declines are twice those of the City. Again, that is completely counterintuitive.
  8. This is one dirty trick that would impact on voter actions within the time-period of the referendum campaign: the BoE reserves available to mount a defence are so small now as to be a pee in the Pacific against a concerted attack.

It is this last circumstance that provides the foundation for a more serious allegation: that the actions involved suggest directed and planned propaganda with a clearly geopolitical rather than speculative profiteering/economic analysis motive.

Let’s take a closer look at how many of the ‘client notes’ and PR releases coming from the Forex space are valid, and how many propaganda. And what better place to start than with HSBC, whose dodgey relationship with David Cameron – alongside Cameron’s habit of parachuting HSBC big cheeses into the BBC and other institutions – continues to disturb genuine lovers of a level playing field. Today they piled on the agony with this client note:

‘If Brexit is the winner on June 23rd, it will be a momentous decision….A vote for Brexit would have potentially huge consequences for all asset classes…Uncertainty could grip the UK economy, triggering a potential slowdown in growth and a collapse in sterling… if voters opted to leave, the move could trigger a further 15 to 20 percent drop against the U.S. dollar…inflation could damage household budgets and shave 1.5% off the UK economy…’

CNBC described the note as ‘a doom-laden report’. More accurately, it is unsupported tosh masquerading as serious advice to investors.

Joshua Mahony, market analyst at IG, is a prominent motormouth on the sterling decline: this is what he told the pro-EU Guardian two days ago:

“There is no doubt that the Brexit referendum is rapidly becoming one of the biggest risk events of 2016 for financial markets. Boris Johnson’s decision to bolster the ‘out’ campaign with his support not only serves to undermine the fruits of David Cameron’s labour in Brussels, but clearly damages UK economic confidence”.

I doubt if more than 10% of objective Brits see the PM’s Brussels humiliation as ‘fruits’ – with the possible exception of a lemon. But I could go on all night: Goldman Sachs, JP Morgan and all the other pro-TTIP/EU/Bourse amalgamation nutters are at it. Not one of them has issued a pro-Brexit client note. Not one.

I posted yesterday as follows to the Leavers: ‘We would all to well to expect dirty tricks rather than be appalled by them’.

As I so frequently conclude, this is not a conspiracy: a conspiracy is by definition covert. This is a concerted, public defence being mounted by the 3% to ensure than nothing gets in the way of their competition-flattening steamroller. It is flagrant fear-mongering to scare those still unclear about the real danger here: marching happily into a corporacratic nightmare.

Earlier at The Slog: Murdoch’s rapprochement with Clinton explains his Brexit silence

and see also Why This is So Much More than Brexit

15 thoughts on “STERLING & THE BREXIT FACTOR: a public meeting of twisted minds

  1. HSBC’s client note could be bullsh1t, it could be an outright lie but it is merely conjecture from what is, to all intents and purposes, an organisation with an extremely questionable pedigree.

    I wonder how many actually buy into this ‘conjecture’ ?

    If one had acted upon Goldman Sach’s recent client recommendation to sell gold, well …..!

    Those who believe in BREXIT really have to ‘get down and get dirty’ to counteract this.

    Liked by 1 person

  2. ‘Today, mortgage approvals were up 33 percent compared to a year ago. A firm sign to buy, not sell, sterling’. Au contraire. The rush into resi property, at any price, is a sure sign of a bubble. We all know what comes next (1974, 1990,2000). Those Chinese speculators that made minimal deposits on flats,south of the river, at idiotic prices, having sold $ for £, are now part of the great unwind. In short, the softening London property prices, in $ terms, is a bear market, which impacts the currency markets with a vengeance. These guys deserve everything that is coming at them!

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  3. who is to say a weakening £ is not a good outcome…. everyones currencies are trying to devalue against each other.. in that climate a stronger pound is a handicap… i would say its the first success for the ‘out’ campaign…

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  4. The complexities are extreme. Lets look at the simplicities. UK (Germany, Sweden, Norway, Finland….) does not feed itself and that isn’t likely to change. France does, and exports. When reality resets the terms for a future, Club Med will be in charge for they will have the only commodity in demand. All of the Eu could plan for the changes, but it exposes the fallibilty concept to the masses. Unacceptable.
    How long will it take the population to grok? When will self/community preservation begin to overwhelm the cloud in earnest?

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  5. Aren’t the markets getting into a bit of a tizzy about nothing? After all, if Britain leaves the European Union, they will still have to be a member of the EFTA and therefore will still have to abide by European Union laws and pay EU levies.

    http://www.efta.int/eea/eu-programmes/application-finances/eea-efta-budget

    Why would leaving the EU make any difference to the UK economy, exept for the appearance that Britain is no longer under Brussel’s thumb? Because Brexit will only mean that Britain loses its right to vote on laws that it will have to abide by.

    Brian, “Lets look at the simplicities. UK (Germany, Sweden, Norway, Finland….) does not feed itself and that isn’t likely to change.” – If you consider the part of Germany that was stolen by the Soviets to make Lebensraum for the Poles they booted out of Soviet held territories. Around 40% of pre-war Germany was taken by the Soviets; with these territories, Germany could feed itself; but then, isn’t it cheaper to pay in Zlotys for cheap Polish labour instead? After all, like Russia, New Poland needs the money…

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  6. O/T but ex Bishop of Gloucester sent down ,rumours of cover up by church and police. Is that really possible,,aahem.
    Present Bishop said it was a shock( the abuse that is).Really?

    Spotlight coming to a cinema near you.

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  7. I agree with desmond. When the world is heading into a depression, devaluation is the way to try and increase exports. As soon as other countries see UK exports increasing they will try and devalue as well. If Greece had been able to devalue years ago they would be recovering by now instead of their problems getting worse.

    Liked by 1 person

  8. Agree JW – you don’t even need bifocals to see it!!
    I say this respectfully, wearing only an old pair of navy joggers and an original Bruce Springsteen T-shirt – FK Cameron, Fk the Banks, Fk the mainstream (by name and nature) media. THIS IS WAR – BRING IT ON

    Liked by 1 person

  9. Anonymous, are the US and China members of the EFTA? After all, EFTA stands for the European Free Trade Association; when I last looked, the US and China weren’t in Europe.

    Mind you, the Fed did pump money into European banks to keep them afloat a while ago.

    Liked by 1 person

  10. London market is due for a correction. All those Chinese et al bought off plan with minimal deposits. Now their economies are not doing so well many will walk ,leaving builders with a glut of unsold properties. This is called a buying opportunity as the prices drop

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  11. @JW – After twisting all the issues around, euro, shengan agreements, legislation, control of borders, citizens right abover criminals in jail these are all effects of the EU. Let alone it is a body that can not pass a proper set of financial books for the institution.

    Now if we had had politicians that had carried a backbone they would have told the EU where to get off and should have done so a long time ago if it was not in the interest of the UK population. Sadly we did not have any of this calibre of politician representing us for 40 years so we ended up with all this, but again it sorely misses the point of the EU referendum in entirety as the above issues list.

    Our politicians if they had a backbone (Cameron does not) can actually change all that at this time because the UK population have never chosen it by a (big word now) BINDING of a population vote. Currently it can be renaged on so we do not have to have the list if the likes of Cameron chose it, but a bought PM is swayed by self interest. Cameron could immediately pit our Democracy against the EU and we WIN, WIN, WIN the morale argument. If not we can ship all out criminals abusing the human rights legislation to German prisons … oh yeah!

    IF IN THE REFERENDUM HOWEVER THE POPULATION VOTES YES IT ALL CHANGES – REALITY CHECK PLEASE!
    CLUNK – CLICK EVERY TRIP SAVES LIVES CONCEPT AND THE GREEN CROSS MAN.

    Does nobody else understand what this means? We lose the right to reject what the EU decides for the UK in full. So if I wake up tomorrow and they pass legilsation making my life a hell I have no democratic way to resolve it on a national scale. Any attempt to do so I would be told BUT YOU VOTED YES TO ACCEPT THAT DECISION.

    Hence voting NO in the referendum and is everybody else in fact so dumb not to realise the issues mentioned is the lack of representation the UK population has had in the EU and nothing more. To vote yes does not change the above that remains but NOW YOU HAVE TO ACCEPT IT BECAUSE YOU VOTED YES! YES! YES!

    Two words on that concept F-O EU I am a european by where I live not by who I live under.

    WHAT IS BEING SOLD OUT IN THIS REFERENDUM IS MY RIGHT AS A UK CITIZEN TO OBJECT TO HOW I AM BEING TREATED. If we vote yes I expect parliament and the house of lords to be immediately dissovled as a worthless expense …

    The list I started with at the top and all other issues are now the NEW NORMAL because you agreed to them.

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