Current Affairs EU In or Out

[Pienaar's gloves]

I knew you'd say that.......

Is that because it's true?

 

[dandydan]

Is that because it's true?

Of course there isn't.

 

[peteblue]

A single market
A stable currency
Established global trading relationships and agreements
Freedom to move around Europe, live and work in Europe
Greater human rights
A greater global presence
Peace and shared security
Ability to shape and influence Europe in the 21st Century

Versus

A plummeting currency
Economic uncertainy
No agreed trade relationships
Lack of freedom of movement
Social division and increasing racial tensions
No future influence in Europe

There is no argument, and when asked questions like 'does Europe impact The UK's ability to trade globally?' we get flip flop answers.

This is not a locker room discussion on who is the bravest, it's about what's best for our country and our future. Don't ever think just because you want to leave Europe you have the monopoly on ambition and the desire for a greater, wealthier, more successful UK because you don't.

I know that we've all been taking positions, but we can all see the benefits of the EU, even if they get overstated like 'human rights' and that other favourite 'peace in Europe'. The benefits are what we currently have and we can all see them. But there are downsides and as the EU develops and expands those downsides will increase.

But the thing that really gets me is that I find it really difficult to understand how someone like yourself cannot see any benefit, or rather will not admit to any benefit in Leaving or even any benefit with a reduction in the value of the £ when most commentators from whatever side of the debate now accept that a revaluation was necessary anyway.

I suggested a few posts ago that perhaps we should all adopt the opposite viewpoint from the one we currently hold to see if there may be some coming together or mutual understanding. We are going to leave, we will have to develop additional trade relationships, we will have to address the best form of immigration and we will have to have a sensible relationship with Europe (in whatever shape it ends up)........

 

[orchard]

Then one may as well say that's the case everywhere...
@Pienaar's gloves

 

[peteblue]

Awfully risky leap of faith IMO.

I kind think you and your countrymen were already doing ok TBH.

We were doing Ok, just like the 13 colonies were doing OK, sometimes a dramatic change is needed.....

 

[hullefc]

Interesting article on Deutsche Bank. That may have far reaching concerns for UK banks.

How US regulators may be creating panic around Deutsche Bank

MARKET INSIDER WITH PATTI DOMM


How US regulators may be creating panic around Deutsche Bank
Evelyn Cheng | @chengevelyn
Friday, 30 Sep 2016 | 10:10 AM ETCNBC.com




Deutsche Bank finds itself in the center of a panic, and some analysts are pointing fingers at U.S. regulators.


Germany's biggest bank fell under fresh scrutiny beginning on Sept. 16 when it surfaced that the U.S. Department of Justice was demanding it pay a $14 billion fine for its mortgage lending activities during the housing bubble. Shares of Germany's biggest bank plunged on Thursday on reports that a handful of its big hedge fund clients were limiting their exposure to Deutsche Bank, though the bank has characterized those media reports as "unjustified concerns.
Certainly, the Justice Department is not the only organization scrutinizing Deutsche Bank: The IMF released a report this summer stating that that Deutsche Bank poses a greater risk to the global financial system than any other bank in the world.

But the size of that Justice Department fine has many analysts talking.

"We see little practical or political upside for the Justice Department to press Deutsche Bank for a penalty that is so large that it could destabilize the bank and provoke a new financial crisis," Jaret Seiberg, managing director at Cowen, said in a Thursday note. Like many analysts, he said he expects the final settlement to be negotiated to a lower price.

The Department of Justice declined to comment to CNBC, as did Deutsche Bank.

Some market participants worry that Deutsche Bank can't pay the billions in fines without some help from the German government or the European Central Bank. As of June 30, the bank had 5.5 billion euros ($6.17 billion) in litigation reserves.

"Certainly this appears to be severe. The size of the fine is severe. It may be intended to be severe. It may in fact prove to be devastating, and I wonder if the regulators thought that through," said Michael Farr, CEO and founder of financial consulting firm Farr, Miller & Washington.

He said he does not think a failure of Deutsche Bank would cause a banking crisis. "I think it really depends on how nervous investors get," he said, adding that a possible outcome for the bank could be a merger with another bank.

A plunge in Deutsche Bank's shares to record lows in New York trade Thursday temporarily left the financial institution with a market value of less than $17 billion, though the stock rebounded sharply on Friday.

Size of US bank settlements compared with issuance of mortgage-backed securities

Indications of diminishing confidence in the firm picked up this week. Selling began Monday following a weekend report that German Chancellor Angela Merkel ruled out state aid for her country's largest lender and any interference in the Justice Department investigation, according to a Reuters translation.

One of the messages the German chancellor may have wanted to send was to tell the United States, "if you take down Deutsche Bank, it's going to affect you as much as it did us," said George Friedman, chairman of Geopolitical Futures, an online publication that forecasts global events.

The last few days have seen various statements in which German authorities and Deutsche Bank representatives, including CEO John Cryan, have repeatedly said there is no need for government support.

The Department of Justice has been relatively quiet in contrast. Principal Deputy Associate Attorney General Bill Baer said at a conference Tuesday how banks generally could receive credit for their cooperation with investigations into residential mortgage-backed securities. And rather than make an official government announcement,The Wall Street Journal was the first to report two weeks ago that the Justice Department had proposed the $14 billion settlement. Deutsche Bank then confirmed the news in a press release.

"My guess is the U.S. regulators would (have) called it off if you thought it would really damage Deutsche Bank," said Maris Ogg, president at Tower Bridge Advisors. "You've got to worry about, certainly the U.S. regulators are not going to bring a bank down that's going to jeopardize the system."

Foreign bank, bigger fine?
Even if the fine is eventually negotiated lower, some speculate one of the reasons for the huge starting figure from the Department of Justice is the fact that Deutsche Bank is a European bank rather than an American one.

The DOJ "ran into a political green light because there was action to punish," David Bahnsen, chief investment officer of HighTower's The Bahnsen Group, said in an email. And since Deutsche Bank is a "non-U.S. bank they could take a shot at it."

Deutsche Bank would be the first European bank to settle on residential mortgage-backed securities with the DOJ. Others on the radar include Barclays, Credit Suisse, Royal Bank of Scotland and UBS.

On Friday, the Financial Times reported, citing sources, that the U.S. Department of Justice hopes to combine cases against Barclays, Credit Suisse and Deutsche Bank into a multibillion dollar settlement. All four parties declined to comment to the newspaper.

Looking at the relative volume of mortgage-backed securities issued by U.S. banks during 2005 and the actual fines they paid, Goldman Sachs analysts in a Wednesday note estimated Deutsche Bank will likely face a settlement in the range of $2.8 billion to $8.1 billion.

'Individuals commit crimes'
Certainly, prominent critics both within and outside government, as well as the U.S. public at large, have repeatedly said that big banks in general have not paid a dear enough price for the role they played in triggering the Great Recession.

Bartlett Naylor, a shareholder activist and a member of financial watchdog group Public Citizen, said the U.S. regulators should go after the individuals who misrepresented mortgage-backed securities rather than the entire bank.

"We're looking for individuals, because individuals commit crimes, not shareholders," he said. He's owned shares of Deutsche Bank for at least five years.

Reporting on those individuals is one of a bank's steps towards receiving cooperation credit, the Justice Department's Baer said in his speech".

 

[Bilko]

You know the thread 3 for dinner , can I get two tables please !

 

[ilikecheese]

We were doing Ok, just like the 13 colonies were doing OK, sometimes a dramatic change is needed.....

Christ...don't even know why I bother.

 

[Bruce Wayne]

http://www.telegraph.co.uk/football...in-football-manager-2017-and-its-going-to-ma/

In-game, players of Football Manager 2017 will be alerted at some point between two and 10 years in that trade negotiations have begun, and a year later a news bulletin will detail the extent of Brexit. There are three main scenarios:

1. Soft Brexit - free movement of workers remains.
2. Footballers are granted the same special exemptions that are currently given to ‘entertainers’. This means it is easier for them to obtain work permits than other people, and it will not have a huge impact on player movement from the EU.
3. Hard Brexit: similar rules to those which currently apply to non-EU players are adopted for all non-UK players.

It is this third option that would see the biggest effect on gameplay.

 

[peteblue]

From the guy that invented the thing...

The European Central Bank is becoming dangerously over-extended and the whole euro project is unworkable in its current form, the founding architect of the monetary union has warned.

"One day, the house of cards will collapse,” said Professor Otmar Issing, the ECB's first chief economist and a towering figure in the construction of the single currency.......quite a good article.....

http://www.telegraph.co.uk/business/2016/10/16/euro-house-of-cards-to-collapse-warns-ecb-prophet/

 

[Joey66]

"Membership of the European Union (EU) has direct effects on the UK labour market via the free movement of labour and the contribution of immigration to GDP, the fiscal budget and productivity. It also has indirect effects via the impact of trade flows and foreign direct investment on aggregate economic activity.
But the first-order labour market effects of the vote to leave the EU relate to increased uncertainty about future economic and political scenarios. There were clear signals of a hiring freeze shortly after the referendum. In the week afterwards, online job ads fell by nearly a half – from nearly 1.5 million to about 800,000 (according to www.cebglobal.com). This drop is far outside normal fluctuations in online job ads, which are typically in the range of 5-10%.

According to the Confederation of British Industry (CBI), business confidence has fallen to a record low since the peak of the financial crisis in 2009. And the first survey of the UK private sector carried out after the referendum (the Markit/CIPS purchasing managers’ index) showed signs of the sharpest downturn in business activity since 2009, especially in the service sector.

In the medium term, further effects of Brexit on jobs and wages will be determined by the deals negotiated between the UK and other countries on international trade and the movement of labour. The key trade-off being debated is between free trade and control of the free movement of labour, albeit with some nuances in between.

If the UK intends to remain a member of the European Economic Area (EEA) and retain access to the single market, it seems it has to accept free movement of labour to and from the EU, as do other countries in the European Free Trade Association. Only weaker trade relationships, with higher transaction costs, would potentially enable the UK to retain border controls on EU immigration in a way similar to how non-EU immigration is restricted.

Most economists would argue that there is not much of a trade-off involved in this choice. The EU is the UK’s largest trade partner (accounting for about half of UK trade flows) and losing access to the Single Market would inevitably damage the UK economy. Dhingra et al (2016a) calculate that in an optimistic scenario in which the UK remains a member of the EEA, it would suffer a 1.3% decline in GDP per head, mostly resulting from the impact of non-tariff trade barriers on trade flows.

But in a pessimistic scenario in which the UK leaves the EEA and trade between the UK and the EU is governed by World Trade Organization rules, the higher increase in trade costs would induce a fall in GDP per head of about 2.6%. To be added to this is the resulting fall in foreign direct investment, which is estimated to produce an even stronger decline in UK GDP than the increase in trade costs (Dhingra et al, 2016b).

Is it economically worthwhile to bear these costs in order to retain controls on immigration flows from the EU? EU immigration has represented the bulk of the recent growth in the share of foreign-born population in the UK, especially after the EU enlargement of 2004, and EU nationals have entered – to varying degrees – all sectors of the UK economy.

In the past 20 years, the share of EU nationals in the working age population has grown from 1.8% to 6.3%. EU immigrants are on average younger, more educated and more likely to be in work than the UK-born population. To give an example, in 2015, the employment-to-population ratio was 72.5% among the UK-born, 78.2% among all EU immigrants and up to 81.9% among immigrants from the countries that joined the EU in 2004 (Wadsworth et al, 2016).

Research on the impact of immigration to the UK has detected no negative effects on the average wages of UK-born workers (Dustmann et al, 2005; Manacorda et al, 2012). There may even be slight positive effects, albeit with losses at the bottom of the wage distribution and gains at the top (Dustmann et al, 2013).

Research also shows that EU immigrants have contributed positively to the UK fiscal budget. This is perhaps not surprising given that on average they are younger and more likely to be in work than the UK-born and therefore tend to pay more in taxes than they receive in benefits. Dustmann and Frattini (2014) estimate that between 2001 and 2011, immigrants from the 2004 accession countries made a net fiscal contribution of nearly £5 billion, and other EU immigrants contributed another £15 billion.

Wadsworth et al (2016) take a closer look at EU immigration during and after the Great Recession. They find that much of the rise in EU immigration took place at a time when the unemployment rate for UK-born workers was rising and their real wages were falling – that is, during the recession years. But EU immigration kept rising after the end of the recession, while the unemployment rate of UK-born workers was falling back to pre-crisis levels and their real wages were starting to grow. This implies little or no correlation between immigration and the labour market prospects of the UK-born across the economy as a whole.

It could be argued that even if the aggregate picture is reassuring, there may be situations in which certain groups of the UK-born do indeed lose out, especially in local areas that have attracted higher numbers of immigrants. But a more disaggregated analysis shows that UK local authorities with a higher increase in EU immigrants between 2008 and 2015 have not experienced any larger increase in UK- born unemployment or a deeper fall in their wages, even for the less skilled.

But one group that does seem to suffer from the arrival of new immigrants is the stock of pre-existing immigrants (Manacorda et al, 2012; Ottaviano and Peri, 2012). The substitutability between new immigrants, pre-existing immigrants and UK-born workers in the host labour market can shed light on why new immigration could harm the labour market prospects of existing immigrants but not much those of the UK-born.

UK-born workers and new immigrants are far from perfect substitutes in most labour markets even if they have similar levels of education or experience. This is because they tend to work in different jobs and perform different tasks. Immigrants may have culture-specific skills and barriers, and both comparative (dis)advantages and immigrants’ networks lead them to cluster in occupations and industries in which foreign-born workers are already over-represented. These mechanisms limit the extent of job competition between the UK-born and immigrants, but reinforce competition across different cohorts of immigrants.

According to the UK Labour Force Survey, low-skill EU immigrants tend to cluster in low-tech manufacturing, construction, private households and cleaning jobs in general, but are disproportionately less likely than unskilled UK-born workers to hold managerial roles. Skilled EU immigrants tend to be more occupationally polarised than UK-born workers: they are much more likely to work in unskilled occupations for which they are over-educated, but they are also over-represented in finance and higher education.

If the implementation of Brexit introduces restrictions on EU immigration in a way similar to the visa scheme currently in place for immigrants from outside the EU, the effects of cuts in EU immigration are mostly going to be noticed in sectors and professions in which immigrants are concentrated – towards the top and the bottom of the job ladder.

If labour market gaps left by cuts in EU immigration were filled by a higher supply of UK-born workers and non-EU immigrants, wages and employment in these sectors would remain unchanged. But this is clearly unlikely, as UK-born workers are imperfect substitutes for immigrants.

What’s more, for given skills and industries, UK-born workers have higher reservation wages than immigrants: Clarke (2016) calculates that the average hourly wage in the 15 UK industries with the highest concentration of immigrants from the 2004 accession countries is £9.32, significantly below average UK-born wages of £11.07. As for non-EU immigrants, existing visa quotas give little prospect of non-EU immigration being expanded in a way that would offset cuts to EU immigration.

It is thus reasonable to expect labour shortages in sectors of the economy with a large presence of EU immigrants, especially food manufacturing, domestic personnel and the parts of the public sector most exposed to skill shortages – and an increase in prices and wages in these sectors.

Clarke (2016) predicts that even if the government were able to halt net EU immigration immediately, real wages in the occupational groups most affected by immigration would rise only very mildly: from 0.16% in administrative and secretarial jobs to 0.62% in skilled trades. These gains would be much smaller than the Bank of England’s revisions to its forecasts of earnings and inflation for 2018, implying a reduction of two percentage points in real earnings growth compared with what was expected prior to the referendum.

A further outcome might be greater mechanisation and automation in some sectors, most notably low-tech manufacturing. Reduced immigration may encourage – via slower growth in low- skilled labour supply – the adoption of labour-saving technologies and productivity growth (Card, 2005). But other sectors, such as domestic personnel or high-skill services, are unlikely to benefit from the same mechanisms."

Source: http://blogs.lse.ac.uk/businessrevi...-affect-the-job-prospects-of-uk-born-workers/

after all that Bruce we still voted pout! your Googling is making my eyes waterlol

 

[Joey66]

Is that because it's true?

IN your opinion which blows with the wind!

 

[catcherintherye]

When I went, granted that was an awful long time ago, I would think that the percentage would have been closer to 40 or 50%.......it's a crying shame what political dogma has done.....

I think Grammar schools lost their way really mate. I went to one and my mum went to one and the experiences we both had varied massively. We both went into the teaching profession afterwards.

I do think there was a commitment up until the 70's or whatever was to give people from poorer backgrounds an opportunity. This was still damaging as the question of what you did for the rest is always there.

However by the time I went most Grammar schools modelled themselves on Public schools, had a strong sense of elitism and were there to serve middle class parents. You still see that argument now "if we don't have grammars they will just go to private school" as if the main function of grammar schools ought to be offering a cheap alternative to private education for middle class parents!

I have significant doubts, with the culture we now have that we'd ever seen a return to the halcyon days that you and probably my parents generation enjoyed. I am not a Tory (or a fan of grammars!) but I don't doubt there is a section of the Conservative party that want to introduce them for the right reasons. Unfortunately I think that argument is now lost both within their own ideology and also further afield. Politicians play to audience and the social base of the Conservative vote will never want Grammar schools that deny their children a place in favour of poorer children.

 

[catcherintherye]

you totally contradicted yourself, because your position is untenable, either the EU hinders global trade or it doesn't. If it doesn't why leave? It it does why does it not hinder Germany?

Re the education differences, the German system offers a much broader syllabus, much less testing and reliance upon exam results and league tables, plus there's no postcode lottery in the German system.

The German system is far from perfect (I prefer the Scandanavian) but they start a bit later and there is less formality at a younger age. One thing that has always impressed me about the German system was the hours they have children in for. They start at something mad like 7:30 and finish at around 1400. It is widely recognised children are at their most attentive in the mornings and so they tried to maximise the time they had contact hours. It was a time scale that was based on children's needs, not on teacher preferences or more likely societal requirements.

This does go hand in hand with a raft of wider measures though. If you teach in Germany you will see children walking to and from school together, without adults, or catching reliable and good public transport. good quality housing, with space that is regulated on rents mean they have space to play after school. Acknowledgment and encouragement of children being outside is not just tolerated in Germany but encouraged. They have also tried hard to avoid a ghettoization and isolation that we have in areas of this country.

In this country such a time scale would never work. Business would never accept it and we run our schools at times little more than a child minding service, with the pressure to keep children in later and later with more homework.

With all this the question is what is the chicken and what is the egg. Do societal attitudes towards children and parents need to change to develop the education system, or does developing the education system allow for people to take a more clear and progressive view? I am not sure of this.

Overall though, anyone who has taught and witnessed in both systems would see, while not faultless the German system is far in advance of this country. In all honesty very few places are worse than we currently are.

 

[catcherintherye]

the stress on housing, the schools - the gp appointments - more so they felt sorry for the immigrants who gang masters in the farmers fields who claimed to pay a minimum wage but then offered barn like accommodation with high rent taken out fetching their pay down theoretically under the minimum wage !
also claiming that these jobs were sometimes advertised solely in the EU and not in the UK - as a UK citizen would you let your child work under those conditions Bruce?
The labour party have pointed this out as now do the Tories
This nonsense that UK teenagers would not do that sort of work annoys me 100% as in my day I chose a career in Horticulture on £9.35p when factory jobs were paying double or even treble, and yes I did field work manually in fields not machine planting etc even harder manual labour in the early 1970's
So when I hear a uk citizen would not do that work I take it with a pinch of salt everyone has to start at the bottom , or have we created a mindset of a generation of teenagers who get a degree and think they are to above themselves to do that work is so its needs changing quickly!
as some of them are either unemployed or working in bars, cafes etc etc etc!
I agree we have a major skill shortage in this country, but only an independant UK can change that around!
The other answer is NO it is not in my area as I live in a retirement area, and by the way I miss Liverpool people I have lived in three areas to better myself to gain promotions - I sympathise with the youth of today in the Job markets and the housing markets!

It's a good post Joe. There's little doubt that with 2.5 million unemployed there are feasibly people to take jobs, but that doesn't mean either they will or they will want too.

I spoke to a guy in construction down my way recently and he said it's madness the Brexit stuff, as there simply aren't enough builders already and Brexit will make it worse. You are right when you say we should aim to be self sufficient and train people up, but that takes time doesn't it? Are immigrants buying us time to produce a new generation? As it's not just builders, it's teachers, nurses, doctors were we are short as well.

I think the big issue we have had from both parties has been that they have taken it for granted that a pool of talented individuals will be willing to come and in all honesty have made it increasingly difficult for people already here to get the skills and support they need. I think politicians of all parties have done this. I'm not sure the answer is the anti-immigrant rhetoric we see though, but is by providing better skills and opportunities to people living in this country through training.

I think there's a balance. Migrants are buying us time in a whole load of areas currently. My issue is governments don't want to take the fundamental reform that doesn't make us dependant on this.