sggatecl said:

I'm not familiar with Britain's demographics. Does anyone know why Scotland and London were overwhelmingly in favor of staying with EU while the rest of the country is in favor leaving?

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Scotland benefits a lot from the UK being in the EU as it is one of the smallest countries in the Union. London wanted to remain because it is the trading Hub of Europe right now and profits greatly from the trade agreements the EU allowed. Now they are posed to become second fiddle to Frankfurt in that regard. London will be hurt a lot by this...

I'm a bit surprised ...all week leading up to the referendum I thought UK would stay and that the rhetoric was outpacing the votes.

Guess not.

And while the EU hasn't been without its warts, I don't see how Italy, Greece, Portugal ..Spain ...Scotland ...survive and compete without some unification. Germany has been like the successful uncle that took in some unemployed cousins who stayed longer than expected and the UK is in a similar situation. The stronger economies have been floating the weaker ones for years, so not a shock that the vote went this way ...

but I am a bit surprised. That GLD trade I put on a few weeks ago is looking very good now.

tbone413 said:

Scotland benefits a lot from the UK being in the EU as it is one of the smallest countries in the Union. London wanted to remain because it is the trading Hub of Europe right now and profits greatly from the trade agreements the EU allowed. Now they are posed to become second fiddle to Frankfurt in that regard. London will be hurt a lot by this...

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That's the worry, but I'm not buying it. They will enter new agreements with the EU that cover everything from migration to trade and London will still be a financial powerhouse city. They will still have strong trading relationships without the burden of the PIIGS and other welfare states in the EU. This could weaken Frankfurt just as likely as it could strengthen it, maybe moreso because nobody wants to live in Frankfurt which is why the Germans chose it over Berlin (or Paris, London, Madrid, etc) for the headquarters of the ECB, so they could have a stronger presence.

Spartanmack said:

That's the worry, but I'm not buying it. They will enter new agreements with the EU that cover everything from migration to trade and London will still be a financial powerhouse city. They will still have strong trading relationships without the burden of the PIIGS and other welfare states in the EU. This could weaken Frankfurt just as likely as it could strengthen it, maybe moreso because nobody wants to live in Frankfurt which is why the Germans chose it over Berlin (or Paris, London, Madrid, etc) for the headquarters of the ECB, so they could have a stronger presence.

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Ya we will see - I don't think anyone assumes London will 'fall off the map' - they will always be a powerhouse financial center and trading hub, but I do think it will be hurt by the Brexit. Just how much remains to be seen.

The biggest impact is I find it hard to imagine that the EU will allow London to continue managing Financial trades in Euros, considering they are now outside of their borders. HSBC, JP Morgan, Barclays and Citigroup had cautioned about job losses and possible relocation if Britain opted to leave on June 23. I think this will probably happen - to what degree I have no idea.

I dont think any EU city/country wanted the UK to leave at all, but I think Frankfurt, Paris, a few other key hubs might experience a boost, especially if new trade agreements between the EU and UK are the slow, drawn out process I think they will be.

tbone413 said:

The biggest impact is I find it hard to imagine that the EU will allow London to continue managing Financial trades in Euros, considering they are now outside of their borders.

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What does this mean?

Gulo Blue said:

Now there's talk of Scotland leaving and Irish reunification.

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Also Frexit and Germexit.

tinselwolverine said:

What does this mean?

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I assume he means restricting London based traders/banks from having seats on European exchanges because I don't think they can stop people from settling trades in Euros anymore than we could stop them from settling trades in US$. Currency markets are easily the most liquid markets in the world and you can settle any trade in any currency with a few exceptions for non-deliverable currencies like the Rand.

Spartanmack said:

I assume he means restricting London based traders/banks from having seats on European exchanges because I don't think they can stop people from settling trades in Euros anymore than we could stop them from settling trades in US$. Currency markets are easily the most liquid markets in the world and you can settle any trade in any currency with a few exceptions for non-deliverable currencies like the Rand.

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To the best of my knowledge, the only physical locations where currency items are exchanged by seat holders make markets in currency as commodities futures, which as you know serves a different function to the financial markets than the spot market.

As far as I know, the world spot market for currency trading is entirely through the global intra-bank FOREX.

You are right, with few exceptions the issuer of a currency has no control as to who in the world is buying and selling its currency nor where in the world its currency is being bought or sold.

tinselwolverine said:

To the best of my knowledge, the only physical locations where currency items are exchanged by seat holders make markets in currency as commodities futures, which as you know serves a different function to the financial markets than the spot market.

As far as I know, the world spot market for currency trading is entirely through the global intra-bank FOREX.

You are right, with few exceptions the issuer of a currency has no control as to who in the world is buying and selling its currency nor where in the world its currency is being bought or sold.

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That's my point - currency markets are far more liquid but stock exchanges like the FTSE, Euronext and the DAX all have members and could conceivably deny membership to UK institutions making it harder to transact in stocks on those exchanges.

tinselwolverine said:

What does this mean?

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Sorry, I meant to respond to this quicker but got tied up with work lol.

let me preface this by saying I am not an investor or economist, but I do follow the world stock market / have a general understanding of things. Some of this could be slightly off though...

London dominates the global foreign exchange market by a large margin. They handle roughly 40% of the $5trillion/day exchange market. NYC is second at around 20%.

Ever since the 2008 financial crisis the ECB has been gun shy about allowing such a high percentage of their currency to be traded outside of its jurisdiction (which London has been since 2000). This is because if something goes wrong (IE a major bank/clearing house fails like the Lehman Brothers bank in the US) the ECB is responsible for dealing with the crisis.

This has been a major point of dispute between the UK and EU for several years now, with the UK taking the issue to the 2nd highest court in the EU. Just last year the court ruled in favor of the UK and allowed London to continue handling large euro transactions; however now that the UK is no longer part of the EU, the ECB will no doubt push again to have the clearing houses regulated.

Now that its no longer part of the EU, Britain would have no say over EU rules that would apply to institutions seeking to operate in the bloc, and any new trade deal involving financial services will be extremely difficult to pass.

Currency is a pretty fungible commodity; I'm not really sure what the EU could actually do to curtail the "foreign" trading of its currency on the international foreign currency markets regardless of how much they didn't like it.

According to this it looks like HSBC it's going to be willing to transfer a large part of its operation out of London into the Euro Zone in order to, it looks to me, "make nice."

Assuming that happens likely other large currency trading operations in London will follow suit.

So if that happens it looks to me like what is pretty much nothing more than a dick measuring contest anyway, initiated by the former governor of the Bank of France, will be avoided.

tinselwolverine said:

Currency is a pretty fungible commodity; I'm not really sure what the EU could actually do to curtail the "foreign" trading of its currency on the international foreign currency markets regardless of how much they didn't like it.

According to this it looks like HSBC it's going to be willing to transfer a large part of its operation out of London into the Euro Zone in order to, it looks to me, "make nice."

Assuming that happens likely other large currency trading operations in London will follow suit.

So if that happens it looks to me like what is pretty much nothing more than a dick measuring contest anyway, initiated by the former governor of the Bank of France, will be avoided.

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You can sit anywhere in the world and trade these contracts, it's where they clear that is the issue. The ECB could force the clearing houses that guarantee the delivery on derivatives transactions (which are backed by the ECB) to relocate within the Eurozone. Traders wouldn't have to physically relocate to the the Eurozone necessarily, but the clearinghouses would.

Maybe that's what Noyer and the HSBC guy are talking about in the linked to article then, but Reuters is using the terms "trade" and "trading."

Spartanmack said:

You can sit anywhere in the world and trade these contracts, it's where they clear that is the issue. The ECB could force the clearing houses that guarantee the delivery on derivatives transactions (which are backed by the ECB) to relocate within the Eurozone. Traders wouldn't have to physically relocate to the the Eurozone necessarily, but the clearinghouses would.

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Youre right - but the worry isnt people/employees leaving London, its the clearing houses relocating, which are what bring income into the city via the millions of daily transactions/trades they oversee.

Anyways, we shall see what happens. While I would have voted to stay in the EU if I was a Brit, I dont think this means the world is on the brink of WW3 or economic collapse like some media stations and politicians would have you believe. I think the UK will be hurt by this, but for how long and how badly all depends on the type of trade agreements they can arrange with the EU and the rest of the world. Its quite possible they come out stronger than ever down the line, but I would be surprised if its a substantial gain. I am more concerned about the rest of the EU dissolving within the next 10 years, which would be very bad news.

tinselwolverine said:

Maybe that's what Noyer and the HSBC guy are talking about in the linked to article then, but Reuters is using the terms "trade" and "trading."

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ya thats basically what they are referring to. and youre earlier comment was pretty much correct. Its essentially a dick measuring contest between the ECB and the UK Based banks. Atleast on this issue, there are other repercussions of the UK leaving the EU, but I am less familiar with most of those

It's the dawn of a populist uprising

tbone413 said:

Youre right - but the worry isnt people/employees leaving London, its the clearing houses relocating, which are what bring income into the city via the millions of daily transactions/trades they oversee.

Anyways, we shall see what happens. While I would have voted to stay in the EU if I was a Brit, I dont think this means the world is on the brink of WW3 or economic collapse like some media stations and politicians would have you believe. I think the UK will be hurt by this, but for how long and how badly all depends on the type of trade agreements they can arrange with the EU and the rest of the world. Its quite possible they come out stronger than ever down the line, but I would be surprised if its a substantial gain. I am more concerned about the rest of the EU dissolving within the next 10 years, which would be very bad news.

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That's my point - the traders moving is ancillary to the loss of control with the clearing houses moving.

But even that is a second order concern. The problem with the EU is that it was slowly creeping toward becoming a political union rather than just an economic uniton, based on the absurd view of a borderless "United States of Europe". One of my professors in B-school predicted that the UK would leave because if they stayed they would eventually have to give up not only their own central bank and control over their economy, but British Common Law and subject themselves to a corrupt pan-European government (I added the corrupt bit). That was back in '01, I agreed at the time and think this is the best move for the UK. All the panty waste liberals with their bull shit chicken little predictions and equally bull shitty accusations of nationalism, xenophobia and racism are either the EU fat cat slime ball bureaucrats trying to protect their gravy train, or the organizations they pay spew their B.S. to protect their gravy train.

Personally, I believe the Brexit will be a net positive for the UK - it may not be "stronger than ever" but more improtantly, they won't be brought down and hurt as significantly by the weaker EU members and the horrible EU policies that will hurt them.

Here's a pretty good summary of the real case for the Brexit...

https://www.youtube.com/watch?time_continue=177&v=rNJ05NfM-4Y

UK keeping its own currency back then was huge for this development.

TheVictors said:

UK keeping its own currency back then was huge for this development.

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It's was also a pretty clear signal back then that they weren't big buyers - if they weren't willing to give up control of their own central bank, no way they would buy into a political union.

TheVictors said:

UK keeping its own currency back then was huge for this development.

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Right.

That and also refusing to change to driving on the continental side of the road.

I've been wondering what the side of the road ramifications will be if Scotland and Northern Ireland leave the UK.

Also the impact on The Open Championship.

Combined, the two could be considered "The Side of the Road Hole Bunker Canundrem."