
Will Brexit break Emerging Markets' back? - memossy
https://governmentsandmarkets.com/will-brexit-break-ems-back-82b466e093be#.56c7og87g
======
crusso
_Grumpy old people_

I've noticed a fairly consistent and unmistakable thread of ageism in the
brexit articles and discussions I've seen. It would be helpful if the
denigration of classes of people weren't a part of the debate.

------
ThePhysicist
When thinking about these kind of problems I really wished we had some good
-and publicly available- tools for simulating the world. While the predictions
made by such a model would be most certainly wrong in most cases (the system
is just too complex to be simulated reliably), it would allow us to narrow
down the number of possible outcomes of a given political situation.

This would make an interesting business case for a startup, and I can imagine
that hedge funds and investors are already using such tools to their
advantage, it would be hugely beneficial to have something like that for the
general public to use though.

~~~
jessriedel
We have one something even better and, in particular, more universal,
trustworthy, and verifiable: prediction markets.

[https://en.wikipedia.org/wiki/Prediction_market](https://en.wikipedia.org/wiki/Prediction_market)

Unfortunately, they are generally illegal in the US.

~~~
tobias3
In case of Brexit they didn't work at all. See e.g.
[http://www.economist.com/blogs/graphicdetail/2016/06/polls-v...](http://www.economist.com/blogs/graphicdetail/2016/06/polls-
versus-prediction-markets)

~~~
jessriedel
That's silly. Prediction markets still gave a ~15% change to "Leave" at their
most pessimistic, and no one says the roulette wheel "didn't work" when black
comes up three times in a row. The vote outcome was clearly a surprise to the
prediction markets, to newspaper, to the pundits, and to the _real_ markets
where people lost billions of dollars.

Prediction markets aren't magic, they aggregate views. If they say there's a
15% chance of something happening, by golly, sometimes it will happen. The
point is (1) they are self-correcting and (2) they have a much better track
record that polls. Not even the "market can stay irrational longer than you
can stay solvent" rule applies. With prediction markets, you know _exactly_
when and how the outcome will be settled.

~~~
TheOtherHobbes
That makes prediction markets non-falsifiable.

There's a simple fallacy here - _you can 't use a market mechanism to define
the probability of the outcome of a one-off event like a major referendum._

All you have are hopes and fears about the probability, which are always - by
definition - limited and subjective.

In fact you're simply quantifying opinions about opinions. That's one step
removed from what polls do. Polls fail because of practical sampling errors
(and sometimes because of political bias) - not because no one understands the
theory of polling.

There's no way a prediction market mechanism can be self-correcting, because
by the time you have real data the question is settled.

Some people may find this kind of thing useful. I'm not convinced it's any
more than entertainment.

~~~
Rexxar
I'm not particularly interested in prediction markets but ...

> That makes prediction markets non-falsifiable.

Why ? We can just make a sufficiently big list of prevision which are
estimated around 15% now and check in one year that around 15% of them
happened.

------
s_q_b
With every area save England flatly stating that they would rather leave
Britain than leave the EU, I think the consequences of this move are highly
exaggerated.

First, there is a real possibility that Britiain will not exit the EU at all.

The referendum is actually non-binding in a legal sense. Parliament could vote
to suspend it tomorrow. Another referendum could be held. The Privy Council
could even intervene on its own authority.

Second, Britain has yet to invoke Article 50 of the EU charter, which would
formally begin the separation process. Despite the insistent (and foolish)
efforts of the French and German governments for Britain to invoke Article 50
immediately, they have not done so, and thus remain an EU member in good
standing.

Third, there is a substantial body of evidence that a large portion of the
"Leave" voters had no idea the consequences of their actions.

The areas that have gathered, or will have gathered by week's end, as many
signatures as the original Leave petition include; Scotland, Northern Ireland,
Wales, and London. In short, almost all of the U.K., save rural and smaller
cities in England proper.

Northern Ireland is even holding talks with the Republic of Ireland to unite
the island. Protest Northern Ireland frantically scrambling to join the
Catholic Republic of Ireland, and receiving a tepid response, is something I
never thought I would see in my lifetime.

The nation of Britain is disintegrating into its constituent parts.

Great Britain may never leave because there simply may not be a Great Britain
any more.

Finally, Britain's elite are already seeking to mitigate the effects of the
referendum. Even if they hold their country together successfully, Britain
will almost certainly seek a treaty to retain their economic rights while
gaining some control over their immigration process.

Let's not start burning the furniture yet. Britain was independent for most of
the post-War period.

The current panic may be merely the flip side of irrational exuberance.

~~~
vegabook
Small problem: the Europeans have had enough of Britains's perfidious ways and
are not inclined to being patient. This pandoras box is therefore open for
business and cannot easily be be rammed shut again.

~~~
logingone
Would the EU not love to have the UK do a u-turn, showing the other potential
EU leavers that leaving looks better than the reality?

~~~
vegabook
Yes but there are powerful forces within Europe that always felt Britain was a
ball and chain, especially in the latin bloc led by France. This is not going
to be simple as they will insist that a rubicon has been crossed. Recall that
Charles de Gaulle himself was against British involvement in continental
Europe, considering it a trojan horse. Just recently and for a whole decade,
for example, Britain was vocally pro Turkish accession to the EU, against
Italy and France. Ironically the same issue was used by the Brexit campaign,
feeding Britain's image as an opportunistic Judas. Distrust of Britain runs
deep in the southern bloc.

As such, with all these forces, this vote genuinely reshuffles the deck, _in
Europe itself_ , even if Britain now backtracks.

~~~
s_q_b
None of which matters a whit if Britain does not invoke Article 50.

------
tim333
The article seems a bit of a muddle. He's talking about Emerging Markets. I'm
not sure what breaking their backs is supposed to mean. He mentions the
Nigerian Naria which fell last week when the government stopped pegging it and
has nothing to do with Brexit. He figures commodities will go lower which I
guess is likely. He kind of ignores Brexit leading to problems with European
banks and a possible Grexit which seems much more of a problem.

------
fixxer
"Grumpy old people."

Naive young people.

------
hbogert
Again that furiating table with the 18-24 aged persons voting for remain.
Maybe also include the percentage to actually vote for those age group. 37%
came to vote for 18-24y, vs 70% and up for 35y and up.

~~~
rwmj
Apparently your stats for turnout are wrong, ref:
[http://www.newstatesman.com/politics/staggers/2016/06/how-
di...](http://www.newstatesman.com/politics/staggers/2016/06/how-did-
different-demographic-groups-vote-eu-referendum)

------
a_imho
How can you know the age group of a secret vote? Statistics only get you so
far that they showed Remain leading.

"I only believe in statistics that I doctored myself"

~~~
rwmj
It's done using phone polls and interviews after the vote. You don't know if
people are being truthful, but there's not a lot of reason to think that
people would lie about how they voted shortly afterwards, at least not a
statistically significant number of them.

~~~
a_imho
The fingerpointing going on is a good enough reason to obfuscate the data imo.
Also, if it is used as a basis of assumptions it should have at least mention
how the data was collected on what sample size. It is very easy to make a bias
error.

People might not be interested in the details, or it can be interpreted as
sloppy journalism. Either way I'm not convinced (hence the reference to
Remain).

------
known
[https://www.cia.gov/library/publications/the-world-
factbook/...](https://www.cia.gov/library/publications/the-world-
factbook/rankorder/2187rank.html) will give an idea

Germany = $285,200,000,000 and United Kingdom = -$123,500,000,000

~~~
woodpanel
Would you elaborate on how you'll think these numbers play out after Brexit?

Isn't it a chicken-and-egg-problem and we can't just say: because Germany is
producing and Britain is consuming, the latter will be worse off by Brexit?

For many developed economies General Trade Agreements are the last straw of
growth. And with Brexit both sides of the Channel loose.

And another spin: A consumerist economy (US, UK) seems to have its own
benefits, in that it can much easier survive on its own.

------
danlindley
I'm really, really sorry to be that guy, and sorry to be somewhat off-topic
but; "We are unlikely to see a full scale collapse, but uncertainty has
definately increased and it is difficult to see how the genie will be put back
in the bottle."

Definitely. It's definitely.

~~~
Spearchucker
It's not the only one. We eke out, and don't eek out.

~~~
coldtea
Well, unless we see a mouse.

------
SunMon
EM = Emerging Markets

Best bet according to the article is on Middle Eastern markets

~~~
Joeboy
Thank you, I was thinking
[https://en.wikipedia.org/wiki/The_Age_of_Em](https://en.wikipedia.org/wiki/The_Age_of_Em)

~~~
oneeyedpigeon
I was wondering why fonts were going to be affected:

[https://en.wikipedia.org/wiki/Em_(typography)](https://en.wikipedia.org/wiki/Em_\(typography\))

------
gkya
Leave is mostly the elder, remain is mostly the younger. And the younger will,
albeit they voted remain, confront the effects for longer than the elder. Thus
they have the right to react. Don't boil everything to denigration and human
rights, if everybody hides behind the shield of some identity no discussion
will happen. Keep your american _-isms_ to yourselves, people need to debate,
discuss and even fight and define the future of their people.

I don't like watching the american politically-correctism and identity crises
being exported overseas. This sort of protectism creates a deaf and blind
democracy that is also very prone to logical errors in its thinking and
decision making, and renders actual social problems irresolvable.

~~~
dang
> _Keep your american -isms to yourselves_

There seems to me something profoundly contradictory about this slur, but in
any case it's a nasty breach of civility and you can't post like that here.

We detached this subthread from
[https://news.ycombinator.com/item?id=11981009](https://news.ycombinator.com/item?id=11981009)
and marked it off-topic.

~~~
gkya
What I refer to is a certain, observable feature of the american culture. The
only breach of civility here is you calling me uncivil. But this sort of
moderation is something I've seen often on the HN, so there's nothing to say.

~~~
dang
You didn't just 'refer' to an 'observable'. You combined three pejoratives in
as many words ('your american isms') with a boorish gesture ('keep your X to
yourselves').

It's common for people to behave rudely like this and, when asked not to,
pretend they were merely stating neutral facts. Perhaps you genuinely think
so; in that case the answer is to develop a more accurate sense of what the HN
guidelines mean when they talk about being civil. If you continue to break
them as you repeatedly have in the past, we're going to conclude that you
don't want to use HN as intended and ban your account.

It's not hard to learn what the standard here is and keep to it. Many users
have had to do so (myself included). The only question is whether one wants
to.

~~~
gkya
I am sorry, I disagree. I don't see any pejoratives there, and in fact you're
the one using them: nasty and boorish are the words you used and you implied
that I'm uneducated, uncivil, and a liar. Do whatever you want with my
account.

~~~
dang
I did use the words 'nasty' and 'boorish' and probably could have avoided
them. I certainly did not mean to imply anything about you personally, nor do
I think those things.

Why did I call those three words pejoratives? Because that's how they work in
the context where you used them: "isms" is obviously a pejorative, "American"
bound to it becomes a national slight, and "your" a personal one. Perhaps you
didn't intend them that way, but I assure you that for many readers they would
acquire that connotation en route.

I don't have any desire to ban you, but I do wish you'd take on good faith
what I'm trying to explain about how HN conversations are supposed to operate.
It all comes from long hard experience trying to prevent an internet forum
from degenerating. You clearly have some interesting things to say, so if
you'd join us in the work of erring on the side of civility, HN would be
better.

------
paulpauper
Just more evidence America is still the best place to invest

------
tosseraccount
Independece for Britain is a good thing. People didn't like the rigged trade
agreement. It wasn't benefiting them. It was benefiting the elite in London.
Cheap jobs may be good for the rich, but not for the working folk.

Labor and Conservatives just didn't take the concerns of the majority
seriously.

~~~
airesQ
The UK currently has a great spot in the EU. It keeps it's own currency (a
wise choice), it is not part of Schengen, it's fees are small for it's economy
(e.g. Italy pays more), and all sorts of other exceptions.

The next deal will not be as good. In fact it will be considerable worse. As
the UK does not have any leverage.

The EU can sort of manage without the UK.

But the UK outside the EEA would be much, much poorer.

The UK was on route to become Europe's biggest economy. But decided to follow
a bunch of charismatic populists instead.

~~~
gallonofmilk
"a bunch of charismatic populists"... you mean 52% of the voting electorate?
populist - a thinly veiled swipe at a group of people perceived to be less
intelligent and too stupid to know what's good for them.

------
vegabook
Trade wars/tariffs go unmentioned, yet they are probably the most important
single issue for emerging markets. To the extent that brexit nurtures a
reversal of global integration (and Donald Trump's "America first" platform
portends the same risk), emerging markets will suffer tremendously. Wage
competition first, and immigration second, are the most issues for those
seeking reactionary Trump and Brexit solutions, and the target is squarely
emerging markets. One needs only look at how the past 25 years of global
integration has helped EM, to see the converse potential outcomes.

A related issue is capital flow restrictions, and these are arguably even
easier to put into force. Brexit is a major defeat for liberal "anglo saxon"
free market policies, and there are many in the world who do not buy into
them, including in the EU itself. Current account deficit countries such as
Turkey and South Africa are heavily exposed, as is the dollar. This last point
makes it unclear that the dollar is the obvious long term safe haven. Indeed
Friday's Yen price action shows that currency as being potentially the most
obvious candidate for a big rally, along with gold. The latter is particularly
well placed if the G7 central banks, in full panic mode, begin to implement
large further slugs of QE or negative interest rate policies.

