Brexit: the beginning of the end?

[Trading]

The petition to remove effect to the referendum already has 3,743,751 signatures (https://petition.parliament.uk/petitions/131215).

A change on the pools about the outcome and another deal with the EU could create the conditions for another referendum.

But even taking in account how much is at stake, including UK's unity, (at least) the short-term conditions of its economy, its role on Europe and EU future (and also Cameron's future), it won't be easy to happen. A popular decision is a popular decision.

[Daniel91]

The petition to remove effect to the referendum already has 3,743,751 signatures (https://petition.parliament.uk/petitions/131215).

A change on the pools about the outcome and another deal with the EU could create the conditions for another referendum.

But even taking in account how much is at stake, including UK's unity, (at least) the short-term conditions of its economy, its role on Europe and EU future (and also Cameron's future), it won't be easy to happen. A popular decision is a popular decision.

I think that this referendum had many protest votes.
People voted for option: ''leave'' because of some other reasons, like dissatisfaction with politicians, or generally with the situation in  society, no jobs, crimes etc.
Most of them didn't really want that UK leave EU and now they are all in panic and want new referendum.
Unfortunately, as I heard, it's very complicate and difficult legal process to start new referendum and already Cameroon said that there will be no new referendum.
Also, it seems EU is not willing to wait to long for UK to leave.

[Jet Cash]

It's starting to look good for the UK. If there is a second referendum, then leave could end up with a bigger majority, and tht would screw the party that called it.

The big question now, is what hppens to UK interest rates, and the banking crisis. shares are down 25%

[Zebedee23]

Brexit is a win against the International Zionism.

As well as
A win against the Globalists , Banksters , Liberal Socialists , The New World Order

It can not be over stated enough the populist victory of Brexit ia a sign that finally the sheeple are waking up and rising against their masters. there may just be hope left for this world yet!!!???

[Zebedee23]

It's starting to look good for the UK. If there is a second referendum, then leave could end up with a bigger majority, and tht would screw the party that called it.

The big question now, is what hppens to UK interest rates, and the banking crisis. shares are down 25%

there isnt going to be another vote. Remain were caught faking the petition signatures!!!  Though i agree if they had another vote im pretty sure the results would be even more in leaves favour.

http://www.bbc.co.uk/news/uk-politics-eu-referendum-36634407

[Trading]

Even if some of the votes (let's admit 10%) were fake, that wouldn't affect the global numbers: 4,116,635 signatures (https://petition.parliament.uk/petitions/131215)

Kerry already said he doesn't believe the Brexit will happen (https://www.theguardian.com/us-news/2016/jun/29/john-kerry-brexit-could-be-walked-back-david-cameron). If the US don't believe on it...

Others are saying the same:

Of course, they will need a second referendum, they couldn't ignore the first without a second (http://fortune.com/2016/06/27/britain-stays-eu-brexit/).

But I'm not saying nothing. The British will decide.

As is clear from the OP, I believe the EU to be important for Europe. I even believe that it should develop into a federal union.

However, proposals like the ones of EU Parliament President (http://www.express.co.uk/news/world/686177/EU-superstate-Brussels-bureaucrat-European-federal-government-Brexit), currently, have no chance to be adopted.

I think the probabilities for the end of the euro and a major crisis on the European Union are higher.

If this crisis is going to happen, unfortunately, I have to write that the British are better off. They are paying a high price today, but averting paying a higher price tomorrow.

Of course, I still hope the Brexit and the crisis won't happen and that slowly the EU might develop into a federal union.

[BADecker]

Brexit and the Derivatives Time Bomb

This piece first appeared at Web of Debt.

Sovereign debt – the debt of national governments – has ballooned from $80 trillion to $100 trillion just since 2008. Squeezed governments have been driven to radical austerity measures, privatizing public assets, slashing public services, and downsizing work forces in a futile attempt to balance national budgets. But the debt overhang just continues to grow.

Austerity has been pushed to the limit and hasn't worked. But default or renegotiating the debt seems to be off the table. Why? According to a June 25th article by Graham Summers on ZeroHedge:

. . . EVERY move the Central Banks have made post-2009 has been aimed at avoiding debt restructuring or defaults in the bond markets. Why does Greece, a country that represents less than 2% of EU GDP, continue to receive bailouts instead of just defaulting?


Summers' answer – derivatives:

[G]lobal leverage has exploded to record highs, with the sovereign bond bubble now a staggering $100 trillion in size. To top it off, over $10 trillion of this is sporting negative yields in nominal terms. . . .

Globally, over $500 trillion in derivatives trade [is] based on bond yields.

But Brexit changes everything, says Summers. Until now, the EU has been able to reject debt forgiveness as an alternative, using the threat of financial Armageddon if the debtor country left the EU. But Britain has left, and Armageddon hasn't hit. Other Eurozone nations can now threaten to do the same if they don't get debt forgiveness or a restructuring.

The First Domino – Italy

That has evidently started happening, with Italy as the first challenger of EU rules. On June 27th, Ambrose Evans-Pritchard reported in the UK Telegraph that the first serious casualty of the Brexit contagion had struck. The Italian government is preparing a €40 billion rescue of its financial system, as Italian bank shares collapse. The government is now studying a direct state recapitalization of Italian banks, to be funded by a special bond issue. They also want a moratorium of the bail-in rules and bondholder write-downs, although those steps are prohibited under EU laws.

According to a June 28th editorial on ZeroHedge titled "The First Casualty of Brexit":

The likely outcome is that Italy's [prime minister] Renzi will be "forced" to take matters into his own hands and enact a unilateral sovereign rescue of the Italian banking system in defiance of the EU, unless he wins concessions soon from Brussels. Those who know him say he will not go down in flames for the sake of European ideological purity.

As a result, Brexit will be just the scapegoat used by Renzi and Italy to circumvent any specific eurozone prohibitions. And if it fails, all Renzi has to do is hint at a referendum of his own. Then watch as Merkel scrambles to allow Italy to do whatever it wants, just to avoid the humiliation of a potential "Italeave."

Read more at http://www.truthdig.com/report/item/brexit_and_the_derivatives_time_bomb_20160706.

[Trading]

Yes, I suspect it will be Italy who will collapse the euro system.

The Italians are sitting on an Everest of debt.

There is no money on the European rescue system to finance Italy if they lose the access to the bond market. Its creditors will burn like a supernova.

We'll see how many years more they can keep kicking the can down the road, thanks to the ECB.

If I recall well, on 2009, on the middle of the crisis, they paid once 8% for a 10 years bond. Things were real near collapse.

Many people has been waiting for the Japanese debt to blow out (with a demographic catastrophe on their hands, even worst than the European), I wonder for how long they will keep it going.

Of course, the Japanese central bank has been buying it at even bigger rates than the ECB. Until inflation starts, no problem...

It's like someone falling from a building. At the middle of the fall, someone asks him from a window: how are you? He shouts: so far, no problem.

The Zimbabwean central bank did the same. We all know the results.

But only inflation (or a huge haircut) can solve this mess, by destroying the value of the debt. I only hope it won't be a Zimbabwean type of inflation.

[Trading]

http://www.zerohedge.com/news/2016-07-11/imf-warns-global-contagion-italian-bank-crisis-forecasts-two-decade-long-recession

[Dahhi]

The one that real keeps world peace (let's forget about the regional wars that they also create) is the United States and their pax americana.

From my point of view, that description is not entirely accurate.

[countryfree]

They have so many bases or similar military installations on Germany (56!) that this country can be considered as still under American "occupation" (https://en.wikipedia.org/wiki/List_of_United_States_Army_installations_in_Germany).

But if someone like Trump won the American presidency, the pax americana could be in risk (http://www.newsweek.com/trump-isolationism-alarm-nationalism-liberalism-allies-realism-445630; http://www.newsweek.com/trump-will-withdraw-nato-world-455272).

There are few US soldiers left in Germany. I'd say there's only one tenth of what there were a generation ago. Regarding Trump, he surprised everybody by saying that because that would just destroy NATO. NATO is meaningless if it's only between countries on the same side of the Atlantic. I doubt he would do that, because that would Russia too happy.

It's seems now that the European Union won't have political will or conditions to develop into a Federal Union.

The European Union might not be as important to peace as some people thinks, at least with the current structure. But if it could be converted into a federal state, the issues of State debt would be overcome and it would be a serious guarantee of peace.

But it seems the opportunity was lost on 2005 and there won't be another one.[/b]

Nobody, or very few people support the idea of a federal Europe. Some people here see Europe as socialist, but most Europeans see it as capitalist, putting in place free market policies which destroy jobs by closing factories with inefficient workers or management.

[Trading]

As the European Union is now it is irrelevant as a real instrument of peace.

The more recent declarations of Trump about NATO (www.nytimes.com/2016/07/21/us/politics/donald-trump-issue) do create concerns about its future as an instrument of peace in Europe if he gets elected.

[criptix]

As the European Union is now it is irrelevant as a real instrument of peace.

The more recent declarations of Trump about NATO (www.nytimes.com/2016/07/21/us/politics/donald-trump-issue) do create concerns about its future as an instrument of peace in Europe if he gets elected.

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but we don’t want to lose you.

Your link doesnt work, but i know that issue from other newspapers.

Tbh imho this doesnt actually have to be bad for Europe or rather the EU, because in my eyes it is time for the EU to stand up as a counter force to the USA, Russia and China.

As long as the EU moves under the wing of the USA i dont see much chances for that.

[BADecker]

As the European Union is now it is irrelevant as a real instrument of peace.

The more recent declarations of Trump about NATO (www.nytimes.com/2016/07/21/us/politics/donald-trump-issue) do create concerns about its future as an instrument of peace in Europe if he gets elected.

Page Not Found
We’re sorry, we seem to have lost this page,
but we don’t want to lose you.

Your link doesnt work, but i know that issue from other newspapers.

Tbh imho this doesnt actually have to be bad for Europe or rather the EU, because in my eyes it is time for the EU to stand up as a counter force to the USA, Russia and China.

As long as the EU moves under the wing of the USA i dont see much chances for that.

It's time for the people of the EU to stand up as a counter force against the EU... just as it is time for the people of every major government to stand up as a counter force against their government.

[Trading]

Europeans fear Russia and themselves (mainly Germany) too much to live without the US to defend them.

Actually, the story of the XX century is the story of the Europeans whining for help from the US on all major situations.

Now that the Europeans got that, they won't let go.

[Daniel91]

Thank you for a very interesting and comprehensive political analysis of Eu.
It's true that EU passing through the a major crisis, the biggest since the establishment of EU.
It's possible that EU will collapse but it's not sure thing.
Still main eU countries like Germany, Italy, France etc. didn't give up from EU.
EU candidates like Serbia, Montenegro, bosnia still didn't hive up from eU.
So, ideals of EU are still alive but EU need to redefine their economic and political goals in the future.
We still need Europe without borders, trade agreements, economic Co-operation and financial supports for weaker countries etc.
Euro is also very important project and symbol of EU.
I think and hope that EU will learn from this current crisis, overcome all problems and continue as long term project, for political and economic stability of the Europe.

[virtualx]

Europeans fear Russia and themselves (mainly Germany) too much to live without the US to defend them.

I don't think the Europeans fear Russia, they invaded a few times.

[DooMAD]

Not specifically related to Brexit, but current Leader of the Opposition just got a massive boost to his re-election campaign:

http://www.bbc.co.uk/news/uk-politics-37009871

Suck it, Blairite scum!  For those who aren't familiar with the story, Labour's governing body ruled that there should be a cut-off point for newly registered members to be able to vote in the leadership contest and this has just been blown out of the water in court.

He was probably going to win even without this, but now it's Corbyn's victory on a platter.  Not a silver one, though, bit too posh.   

[Herp]

Thank you for a very interesting and comprehensive political analysis of Eu.
It's true that EU passing through the a major crisis, the biggest since the establishment of EU.
It's possible that EU will collapse but it's not sure thing.
Still main eU countries like Germany, Italy, France etc. didn't give up from EU.
EU candidates like Serbia, Montenegro, bosnia still didn't hive up from eU.
So, ideals of EU are still alive but EU need to redefine their economic and political goals in the future.
We still need Europe without borders, trade agreements, economic Co-operation and financial supports for weaker countries etc.
Euro is also very important project and symbol of EU.
I think and hope that EU will learn from this current crisis, overcome all problems and continue as long term project, for political and economic stability of the Europe.

Apocalypse fetishists like to spell the end of everything but it's wishful thinking. The UE will transform into a viable entity. There are plans in place to make it happen. Adjustments will be made but it's a process that involves both regression and progress.

[Trading]

I think my believes and hopes are stated clearly on the text.

I have hopes on the success of the European Union project.

I just can't see the political and economic conditions for that.

Italy owes 2,228,741 million USD, 132% of its GDP (http://countryeconomy.com/national-debt/italy) and, as was recalled on this thread, most of this debt in insured by credit default swaps and other derivatives.

And, like all European countries, its already losing active population, because of disastrous birth rates.

When debt doesn't stop growing, the GDP is more or less on a stagnated level for 15 years, active population is decreasing, there is a growing number of old people (with higher health and social security expenses)  and there is no inflation, of course this is going to explode. Soon or later.

Its banking crisis is only aggravating this.

When Italy had to pay on an auction 8% for borrow money for 10  years on 2009 or 2010, the Euro was on the brick of disaster.

It was a miracle that the euro system survived.

There won't be enough money to save Italy, if it loses access to the lending market.

The only think supporting this is the ECB and its quantitative easing policy and zero interest rates.

If inflation goes up to 2% because of oil prices or a dump of the euro (imported inflation, caused by the increase of imported foreign goods), the ECB will have to stop this quantitative easing policy.

So, Italy will need to give an hard haircut on their lenders, like Greece.

That will spread to other high indebted countries, like Spain.

Banks, which are the main lenders, will go bankrupt or will need more help...

The only way to help them would be to "print" money. But that can't be done on the euro system. Several countries might need to leave the euro.

Yes, Draghi will again try to save everything and, probably, he will be successful for some more time, but...

I have big hopes he could solve the problem, but I have my doubts.

Anyway, it wouldn't be the end of civilization as we know it. Far from that.

We still have a lot of scientific progress going on, we will handle this.

But it might end up the European project as a political union.