So in the previous posts I looked at what happened, followed by possible winners.
If there are winners then there’s got to be losers. So lets take a look at some of them.
Boris Johnson
It’s all gone ‘a bit Pete Tong’ for old Boris hasn’t it? In what should be the crowning achievement of his political career, namely winning a referendum and being a shoo-in for Prime Minister to political has-been within the space of a week!
To be fair one of the things I did get right was predicting that Boris would not be PM despite other protestations. Remember that 42% of the Tory party voted to remain and within that group of Tory MP’s I always thought there was enough clout to ensure that Brutus Johnson would never be PM. There will be lots of people just within the Tory Party that would want to knife him for all the trouble he’s caused. (Interestingly enough he actually got knifed from someone close to him…oh the irony for Brutus .)
Whilst I was never fussed about him one way or another as PM I do feel that he would have probably led a good negotiation with our European partners. For all his commentary, he was always pro-European, just anti-EU. But it looks like he wasn’t man enough for the job.
To be fair Boris is very good at playing the hand he gets dealt and will undoubtedly come back in a few years to have another crack at PM, so watch this space.
George Osborne
George “Chumpy” Osborne has played this poorly from Day 1. Instead of using it as an opportunity to be statesman-like and project an image of heir-apparent to DC, he’s just ended up looking like a School Prefect at a minor school. You know, the kind of Prefect that got the job not because of any talent, but because no-one else wanted to do it and he thought it would make him popular.
He was a key architect of ‘Project Fear’ and it back-fired on him spectacularly. His call for a harsh emergency budget if the country voted Leave was an example of this, when he rolled back on that very quickly. Furthermore he went missing for 3 days when the country needed to see him front-and-centre as Chancellor. And you just know he was at home underneath his duvet crying like a spoilt brat.
I suspect he his wheedling his way around the back-rooms of power trying to build new relationships to provide him with some kind of graceful move. (I bet he’ll be part of the power behind Teresa May…god help us all!)
David Cameron (DC)
I had often briefed that I felt that DC would “Win the battle, but lose the war” if the Bremain vote was not a strong enough victory. In the end he lost the skirmish, the battle, the war, and probably his legacy which will be undoubtedly tarnished by this referendum. here’s not really much to say here is there? He screwed it: big-time.
Jean Claude Juncker
I have found it interesting that those unelected members of the EU (Like Juncker) have been the ones most belligerent in their rhetoric about making sure there are consequences for the Brexit Vote. Whereas those national members of parliament who have to manage domestic elections and economies have been much more conciliatory in their tone. That tells you all you need to know about this man and his like. It is his type that Vote Leave was all against.
He instigated a Presidential ban on any other European member speaking with Britain, such is his need to control. But all we’ve seen is that it’s clearly shown were the real power lies in Europe, and it’s not at his door, but that of Angela Merkel (as if we didn’t really know that anyway!)
European Indices and Banking Sector
I mentioned in one of my other posts (and on some Facebook pages) that whilst GBP and FTSE were hit hard, so were our European cousins. In fact some of them were hit even harder than the UK. In particular the Italian and Spanish Bourses were hit hard, as were European Banks.
There’s plenty I could use but here’s the Italian Mib and Spanish Ibex charts
The Italians had to bail-in Italian banks to he tune of E40bn earlier in the week. And this goes to the heart of it all. The EU consistently favours large corporations over SME’s and the people. In a choice between Greece and its people and the French & German (and some UK) bondholders the EU chose to save the German banks over the Greek people. They have consistently failed to hold the European banks to account and as such this has done much to cause division within Europe.
Interestingly the Spanish elections of last Sunday night allowed the right-wing party un Rajoy to increase his position to one strong enough to create a government. The consequence of this is that there’ll be no SPEXIT (not that it really was a player) but that also as part of Rajoys speech he made it very clear that there must be no separate EU deal for Scotland. Hard Cheese Nicola.
The Financial Times
How are they a loser? Well it’s purely in my eyes that’s all. (Which I understand counts for little.) I have always been a big fan of the FT and always tell my students to ensure they read the FT weekend to give themselves a good big picture view of what’s going on in the world of finance and markets. I’ve also enjoyed that they were impartial and agnostic-politically.
However their coverage of the Brexit vote was clearly biased towards the Bremain side. Instead of standing apart from the media, they just showed their true colours in the sense that they were clearly in the back pocket of the powers that be. Furthermore when they were wrong instead of admitting their error and providing reasoned insight into the way forward, they almost doubled-down on their bet by attacking the Leave / pro-Brexit side further. Very disappointing overall. I had hoped for better from them. But I suppose he people have lost trust in all the old pillars of society haven’t they?
George Soros (kind of)
Georgie boy is here because of his long GBP position pre-vote. Post the murder of Jo Cox MP there was a huge wall of money that flowed into GBP (as discussed in one of my other posts.) I had described it as the relief-rally that I had expected on Friday 24th, happening a week early. And it was some rally. Right up until it turned on its head at £1.50. Thing is when you’re trading in the size that George was (I presume) then you can’t just turn on a six-pence. So I am interested to see how he truly fared on Referendum night.
However any losses he took on Sterling were probably happily covered by him also being short European banks (a subject I ve covered elsewhere). I only found out about that earlier this week. Nice to see that the big man himself had the same ideas myself about where the weakness would be.
So what other losers have I missed out on? Surely there’s many more. Any thoughts gratefully accepted.
In the last piece I’ll talk about my own views that we could prosper from the Brexit vote.
Trade well,
Paul
September 28, 2016
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