Conservative party

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albedo
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Re: Conservative party

Post by albedo »

Poiuytrewq wrote: The statement is expected to include a boost to the overall defence budget, exceeding the current commitment to increase spending by 0.5 per cent above inflation.
That's so tiny as to be meaningless. If the current spend is say 2% GDP (to keep the numbers simple) then 0.5% of that proportion is 0.01%. So in the next FY there might 2.01% real (or 2.11% if you believe the 2.1% figure). Big deal!

Caribbean
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Re: Conservative party

Post by Caribbean »

Well - it's a couple of hundred million extra per annum, over and above inflation, so worth having, particularly with compounding involved. An extra billion or so (in real terms) over 5 years could be put to good effect. Might also act as a "ratchet" commitment to stop the budget shrinking, should GDP fall post Brexit (temporary, I hope).
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.
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albedo
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Re: Conservative party

Post by albedo »

Well, always better to have some loose change than not to have it of course. But in the big picture 0.5% (of 2.1%) increase is a rounding error. Also, what I really don't care for is mixing the 2.1% and 0.5% in almost the same sentence, which makes 0.5% sound quite significant, whereas the reality is 2.1% and 0.01% for the two figures (ie annual defence budget and guaranteed increase). It's sucking the gullible into believing that anything at all worthwhile is being promised.

FWIW I think you're being hopefully optimistic in thinking that there will be minimal GDP change in the event of a hard Brexit. My picture is rather different: By 2030 say, Scotland will have long since departed with a lot of consequential damage and expenditure associated with loss of bases, dockyards etc, Ireland will be reunited and the rump of England (and probably still Wales) will be lucky to be in the G20, let alone the G7. Another consequence will be a much lower profile on the world stage, loss of permanent seat on the UNSC etc, which will lead to a major rethink of English defence strategy, almost certainly ditching CASD (the overall cost just won't be defensible for a much diminished rEW defence budget and world role).

abc123
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Re: Conservative party

Post by abc123 »

SW1 wrote:No matter what happens deal, no deal there isn’t going to be a real border on the island of Ireland. In 1923 a common travel area was agreed and from then on people can move freely without documents, no passports no nothing between any parts of the uk and Ireland, very different to what happens even today when you head to mainland Europe. Any new check even in a no deal are all around livestock and food transport some of which already happen at the ports and airports.

I would add this even as late as 2000’s at some major airports in the uk people on the flights to belfast had to have there photo taken as they checked in and then at the gate. Didn’t happen on any other uk domestic flights. If you lived in NI you were banned from joining the Labour Party until legal action in 2003 forced them to change there membership rules you could live in Baghdad and join but not belfast. Many shouting about treating everyone equally have very selective memories in relation to this.
Well, if no-deal Brexit happens, some sort of involountary backstop will have to happen, if you want no borders.
Fortune favors brave sir, said Carrot cheerfully.
What's her position about heavily armed, well prepared and overmanned armies?
Oh, noone's ever heard of Fortune favoring them, sir.
According to General Tacticus, it's because they favor themselves…

Caribbean
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Re: Conservative party

Post by Caribbean »

albedo wrote:FWIW I think you're being hopefully optimistic in thinking that there will be minimal GDP change in the event of a hard Brexit.
Actually, I'm not being optimistic, quite the opposite. Most serious estimates suggest that, following Brexit, there will be a short-term impact due to initial disruption, but that overall, GDP will not fall. In future, growth will be lower than it could have been, leading to the GDP being approx. 9-10% lower than it could have been in 15 years time "in a worst-case, no deal scenario", but it will not fall as a result of Brexit

Personally, I feel that there is a real chance of a fall in GDP, as Brexit will happen shortly before the worldwide recession that is now widely expected (the bond yield curve inversion has been correct for 7 out of the last 8 recessions, occurring between 1 and 2 years before a recession starts). The recession will be primarily caused by the trade war between the USA and China (not everything is down to Brexit). My hope is that this will not be a prolonged fall (and very little of the recovery will have anything to do with Brexit, either).
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.
Winston Churchill

albedo
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Re: Conservative party

Post by albedo »

Caribbean wrote:Actually, I'm not being optimistic, quite the opposite. Most serious estimates suggest that, following Brexit
Hmm, actually I think this is one of those uncommon situations where there are just too many imponderables to make any serious estimate possible, with the result being huge confidence intervals on any estimate that is made.

All one can do is essentially to guess and rely on gut instinct. Maybe a house of cards analogy is stretching things too far but personally I think the UK economy is pretty fragile with eg not much in the way of a manufacturing base any more and the international service sector where we have been quite strong taking a major hit from an inability to trade as before in the EU. I'm pretty concerned about a major fall in GDP which could continue long-term.

abc123
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Re: Conservative party

Post by abc123 »

Caribbean wrote: (the bond yield curve inversion has been correct for 7 out of the last 8 recessions, occurring between 1 and 2 years before a recession starts). .
Can you explain this please?
Fortune favors brave sir, said Carrot cheerfully.
What's her position about heavily armed, well prepared and overmanned armies?
Oh, noone's ever heard of Fortune favoring them, sir.
According to General Tacticus, it's because they favor themselves…

Caribbean
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Re: Conservative party

Post by Caribbean »

albedo wrote:I think the UK economy is pretty fragile with eg not much in the way of a manufacturing base any more
I think you are misinterpreting the figures. The reason that manufacturing is now a relatively small part of our economy is because of the vast growth in the services sector, not because manufacturing capacity has fallen. In fact our manufacturing base is twice the size it was at the end of WW2 and the UK is 5th or 6th largest manufacturing economy in the world (depending on who you listen to).
albedo wrote:and the international service sector where we have been quite strong taking a major hit from an inability to trade as before in the EU.
The financial sector will be largely unaffected. The vast majority of banks and the other major financial organisations already have the 3000 employees that they need to continue to operate inside the EU, but will continue to run all the backroom stuff in the UK (because it's more cost effective to do it that way and the existing infrastructure would cost vast amounts of money to move). We'll see how it goes with the rest of the service sector, but the fact that UK based services are now significantly cheaper due to the fall in the pound, there are no tariffs on services and the fact that UK-based service providers are already fully compliant with EU standards and processes should minimise the impact.
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.
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jedibeeftrix
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Re: Conservative party

Post by jedibeeftrix »

Caribbean wrote:
albedo wrote:
albedo wrote:and the international service sector where we have been quite strong taking a major hit from an inability to trade as before in the EU.
The financial sector will be largely unaffected. The vast majority of banks and the other major financial organisations already have the 3000 employees that they need to continue to operate inside the EU, but will continue to run all the backroom stuff in the UK (because it's more cost effective to do it that way and the existing infrastructure would cost vast amounts of money to move). We'll see how it goes with the rest of the service sector, but the fact that UK based services are now significantly cheaper due to the fall in the pound, there are no tariffs on services and the fact that UK-based service providers are already fully compliant with EU standards and processes should minimise the impact.
indeed:
https://t.co/o3nCPhk886?amp=1

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Re: Conservative party

Post by Caribbean »

abc123 wrote:Can you explain this please?
Sorry - normally bond yeilds (i.e interest rate that you receive as a lender) for long-term bonds are greater than for short-term bonds. In a normal (expanding) economy investors expect a greater reward or locking up their money for longer and demand is greater for short term bonds. If, however investors believe that the economy will contract, then they start to buy long-term bonds as a hedge, to lock in a future income stream through what they see as troubled times ahead. The increased demand drives up the price for the bonds, which drives down the yeild (interest rate) on the longer term bonds (bond prices move in the opposite direction to the interest rate).

The yeild curve "inverts" when short-term yeilds become greater than long term yeilds (the prime indicator is US Treasury Bills and "short-term" is the two-year rate plotted against the "long term" 10-year rate). It's a very good indicator of a loss of confidence in the economy within the near future (i.e. two to three years). Whether that reflects the fundamental strength of the economy is debateable, but these things do have a way of becoming self-fulfilling prophecies.

According to one article I was reading recently, this has happened before the last 9 US recessions (another said 7 of the last 8, but I think they were talking wordwide, rather than just US), with the maximum lag being 34 months.
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SW1
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Re: Conservative party

Post by SW1 »

Caribbean wrote:
abc123 wrote:Can you explain this please?
Sorry - normally bond yeilds (i.e interest rate that you receive as a lender) for long-term bonds are greater than for short-term bonds. In a normal (expanding) economy investors expect a greater reward or locking up their money for longer and demand is greater for short term bonds. If, however investors believe that the economy will contract, then they start to buy long-term bonds as a hedge, to lock in a future income stream through what they see as troubled times ahead. The increased demand drives up the price for the bonds, which drives down the yeild (interest rate) on the longer term bonds (bond prices move in the opposite direction to the interest rate).

The yeild curve "inverts" when short-term yeilds become greater than long term yeilds (the prime indicator is US Treasury Bills and "short-term" is the two-year rate plotted against the "long term" 10-year rate). It's a very good indicator of a loss of confidence in the economy within the near future (i.e. two to three years). Whether that reflects the fundamental strength of the economy is debateable, but these things do have a way of becoming self-fulfilling prophecies.

According to one article I was reading recently, this has happened before the last 9 US recessions (another said 7 of the last 8, but I think they were talking wordwide, rather than just US), with the maximum lag being 34 months.
The one difference that may however be a factor is we’ve never had so much manipulation in the bond market thru quantitative easing and no one really knows what this is doing we also haven’t had bonds so expensive in that there on negative yield.

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Pseudo
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Re: Conservative party

Post by Pseudo »

SW1 wrote:No matter what happens deal, no deal there isn’t going to be a real border on the island of Ireland. In 1923 a common travel area was agreed and from then on people can move freely without documents, no passports no nothing between any parts of the uk and Ireland, very different to what happens even today when you head to mainland Europe. Any new check even in a no deal are all around livestock and food transport some of which already happen at the ports and airports.
The Common Travel Area doesn't abolish border controls, it just permits unrestricted cross-border access to citizens of participating nations. It's the CTA in combination with the UK and NI being members of the EU Single Market and Customs Union that remove the need for either party to abide by the usual WTO requirements on checking goods crossing the border that makes a physical border unnecessary.

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Re: Conservative party

Post by SW1 »

Pseudo wrote:
SW1 wrote:No matter what happens deal, no deal there isn’t going to be a real border on the island of Ireland. In 1923 a common travel area was agreed and from then on people can move freely without documents, no passports no nothing between any parts of the uk and Ireland, very different to what happens even today when you head to mainland Europe. Any new check even in a no deal are all around livestock and food transport some of which already happen at the ports and airports.
The Common Travel Area doesn't abolish border controls, it just permits unrestricted cross-border access to citizens of participating nations. It's the CTA in combination with the UK and NI being members of the EU Single Market and Customs Union that remove the need for either party to abide by the usual WTO requirements on checking goods crossing the border that makes a physical border unnecessary.
That’s what I said people move freely between NI and Ireland and the uk and will continue to do so. There is already checks at all the major ports in NI of livestock and other food stuff coming in from uk and from the south. But there won’t be a physical border in NI regardless of outcome.

https://www.daera-ni.gov.uk/articles/bo ... posts-bips

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Pseudo
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Re: Conservative party

Post by Pseudo »

SW1 wrote:
Pseudo wrote:
SW1 wrote:No matter what happens deal, no deal there isn’t going to be a real border on the island of Ireland. In 1923 a common travel area was agreed and from then on people can move freely without documents, no passports no nothing between any parts of the uk and Ireland, very different to what happens even today when you head to mainland Europe. Any new check even in a no deal are all around livestock and food transport some of which already happen at the ports and airports.
The Common Travel Area doesn't abolish border controls, it just permits unrestricted cross-border access to citizens of participating nations. It's the CTA in combination with the UK and NI being members of the EU Single Market and Customs Union that remove the need for either party to abide by the usual WTO requirements on checking goods crossing the border that makes a physical border unnecessary.
That’s what I said people move freely between NI and Ireland and the uk and will continue to do so.
No, you said...
SW1 wrote:No matter what happens deal, no deal there isn’t going to be a real border on the island of Ireland.
That's incorrect because the CTA does not guarantee that since it does not cover the movement of goods. The only way that a customs border on the Irish border can realistically be avoided is by an arrangement that would avoid the need to erect a customs border in order not to fall foul of WTO most favoured nation rules.
There is already checks at all the major ports in NI of livestock and other food stuff coming in from uk and from the south.
No, there's not. One of the main points and benefits of the EU single market is that the common regulatory standards of member states removes the need for phytosanitary and other regulatory checks.
But there won’t be a physical border in NI regardless of outcome.
That's only going to be the case if there is a customs arrangement that avoids the need to erect a customs border in order not to fall foul of WTO most favoured nation rules.

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Re: Conservative party

Post by SW1 »

Pseudo wrote:
SW1 wrote:
Pseudo wrote:
SW1 wrote:No matter what happens deal, no deal there isn’t going to be a real border on the island of Ireland. In 1923 a common travel area was agreed and from then on people can move freely without documents, no passports no nothing between any parts of the uk and Ireland, very different to what happens even today when you head to mainland Europe. Any new check even in a no deal are all around livestock and food transport some of which already happen at the ports and airports.
The Common Travel Area doesn't abolish border controls, it just permits unrestricted cross-border access to citizens of participating nations. It's the CTA in combination with the UK and NI being members of the EU Single Market and Customs Union that remove the need for either party to abide by the usual WTO requirements on checking goods crossing the border that makes a physical border unnecessary.
That’s what I said people move freely between NI and Ireland and the uk and will continue to do so.
No, you said...
SW1 wrote:No matter what happens deal, no deal there isn’t going to be a real border on the island of Ireland.
That's incorrect because the CTA does not guarantee that since it does not cover the movement of goods. The only way that a customs border on the Irish border can realistically be avoided is by an arrangement that would avoid the need to erect a customs border in order not to fall foul of WTO most favoured nation rules.
There is already checks at all the major ports in NI of livestock and other food stuff coming in from uk and from the south.
No, there's not. One of the main points and benefits of the EU single market is that the common regulatory standards of member states removes the need for phytosanitary and other regulatory checks.
But there won’t be a physical border in NI regardless of outcome.
That's only going to be the case if there is a customs arrangement that avoids the need to erect a customs border in order not to fall foul of WTO most favoured nation rules.
It you who is incorrect there isn’t a real border and there will continue not to be a real border. As for the check there most definitely is, a family member is one of the inspectors at one of the border posts.

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Re: Conservative party

Post by Caribbean »

Pseudo wrote:That's only going to be the case if there is a customs arrangement that avoids the need to erect a customs border in order not to fall foul of WTO most favoured nation rules.
WTO rules don't demand a hard border. Nothing to do with the "most favoured nation" stuff.
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Re: Conservative party

Post by SKB »

EU is already a member of the WTO. UK gained its membership of WTO from its membership of the EU.

Caribbean
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Re: Conservative party

Post by Caribbean »

The UK is a founder (and current) member of the WTO and also of it's predecessor, GATT. It's all on the WTO website. The UK has it's own individual membership (as do all the EU nations), but assigned authority to the EU (which has it's own membership) while the UK was part of the EU. When we leave, the UK's membership will still be valid and the EU will lose it's authority to speak for the UK.

Sorry - the hard border and most favoured nation argument is a complete non-runner. There is currently no hard border and we are entitled to keep it that way, as is the Republic. The WTO regulations do not specify what nature a border must take and would certainly not demand the imposition of a border where none currently exists. The best thing for all (including the Republic) is to negotiate a sensible agreement based on a technological solution (which is only impossible according to the European Commission, but not according to all the people who actually do that sort of thing for a living).

As for the possibility of disruption at the Channel crossing ports - I wonder what the legal ramifications are of French customs delaying Irish exports at Calais (since about 80% of the Republics exports to the EU travel by road via England and Wales)?
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.
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Pseudo
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Re: Conservative party

Post by Pseudo »

Caribbean wrote:
Pseudo wrote:That's only going to be the case if there is a customs arrangement that avoids the need to erect a customs border in order not to fall foul of WTO most favoured nation rules.
WTO rules don't demand a hard border.
Not specifically, but unless there's one of those much vaunted "technological" solutions that Brexiteers used to talk about a customs border is the implication of meeting other WTO obligations, such as abiding by the MFN principle.
Nothing to do with the "most favoured nation" stuff.
Of course it is. Allowing favourable trading conditions for one country and not others outside of a formal trade agreement is exactly what MFN is there to prevent.

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Pseudo
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Re: Conservative party

Post by Pseudo »

SW1 wrote:It you who is incorrect there isn’t a real border and there will continue not to be a real border. As for the check there most definitely is, a family member is one of the inspectors at one of the border posts.
Border checks at ports exist because there are goods imported from non-EU countries. There is no requirement for goods imported from EU countries to undergo customs checks as long as they comply with the relevant regulations.

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ArmChairCivvy
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Re: Conservative party

Post by ArmChairCivvy »

Caribbean wrote: The UK has it's own individual membership (as do all the EU nations), but assigned authority to the EU (which has it's own membership) while the UK was part of the EU. When we leave, the UK's membership will still be valid and the EU will lose it's authority to speak for the UK
And how does the "same" run for the membership in the EEA?
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Re: Conservative party

Post by bobp »

Ha ha the BBC reports the pound sinks with news of a possible general election. They then show a graph with a large negative dip. But when you read the figures it slid less than 1 percent.

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Pseudo
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Re: Conservative party

Post by Pseudo »

bobp wrote:Ha ha the BBC reports the pound sinks with news of a possible general election. They then show a graph with a large negative dip. But when you read the figures it slid less than 1 percent.
Compared to usual trading a 1% slide is pretty significant and if any currency traders were "in the know" they could make millions on that. Though I'm sure that none of the disaster capitalists that backed Brexit and sold it to the British electorate would be in a position to do that. :roll:

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ArmChairCivvy
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Re: Conservative party

Post by ArmChairCivvy »

Pseudo wrote:I'm sure that none of the disaster capitalists that backed Brexit and sold it to the British electorate would be in a position to do that.
There is no other market where shorting is easier. And regardless of what "they" say, make no mistake about "them" going short (when the time is ripe). What did Cummings say: Now I'm off, to see some billionaires for funding. - Will the Electoral Commission be awake, this time around?
- the see-saw can be extraordinary, going forward
- like between parity and 1.40
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
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Re: Conservative party

Post by Caribbean »

[quote="ArmChairCivvy"] the see-saw can be extraordinary/quote]

Indeed - volatility is when you really make the money - provided you read it right, of course, which isn't easy for the ordinary investor. It's the guys with the high-frequency trading bots (the sort that cost tens of millions to develop - you won't find them on the open market) who benefit most.

However it's also when a lot of people lose money - don't forget, for every winner, there's a loser.
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.
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