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SpectrumFX

Hard Brexit, risks and opportunities

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Posted (edited)

I've come to the view that the deal with the EU is all flim flam, and we're most likely going to crash out of the EU with no deal - on WTO terms.

There'll probably be a big panic, then things will settle down and we'll have adapted to the new reality.

I'm pretty much a buy and hold investor, but what sort of strategies should we be thinking about to protect our investments, and are there going to be opportunities to make a quick buck? 

Parking a bunch of money in US stuff seems a fairly obvious risk avoidance play, and could make some money if carnage drops rates post Brexit.

Anybody been planning for this, or are you all going to just ride it out?

Edited by SpectrumFX

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A material sterling fall is likely so it's go into overseas now and switch back in when sterling is cheap.

However... cheap sterling usually means high equity markets so that goes the other way.

Hence primarily a currency trading opportunity which I don't usually go for as I don't like holding cash or bonds.

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I am focused more towards US stuff, but am minding durhamborn's thread on ToS.  My current rough figures are 40% cash (mostly GBP) at the moment, 30% crypto (which is denominated in USD), 15% long-dated US treasuries, and about 10% each of equities and PMs. I know that's 105%.

I'm less concerned about Brexit than I am about ZIRP and the huge levels of debt around.

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https://www.bbc.com/news/amp/uk-politics-44292870

He is reported to have given about £500,000 to Best for Britain, which was set up last year by anti-Brexit campaigner Gina Miller.

George Soros wants to keep us in the EU.

He wasn't worried back in the 90s of crashing us out of the ERM was he, and making a £1bn in the process?!

 

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So why the change of heart now? Will the British people more likely listen to someone who bet against the Bank Of England or more likely go against him?  What opportunities does he see?

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There are opportunities out there, and there doesn't appear to be a capital flight in process. The London housing market is weakening, more so because of people putting off buying until the future is clear. The UK stock market, so far, is telling us, it's business as usual.

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21 hours ago, Inoperational Bumblebee said:

I am focused more towards US stuff, but am minding durhamborn's thread on ToS.  My current rough figures are 40% cash (mostly GBP) at the moment, 30% crypto (which is denominated in USD), 15% long-dated US treasuries, and about 10% each of equities and PMs. I know that's 105%.

I'm less concerned about Brexit than I am about ZIRP and the huge levels of debt around.

It's an interesting thread that. I was aware of it - I think because you'd mentioned it on here previously - but hadn't got around to reading it. I've read the first 10 or so, and last 10 or so pages and got the gist.

I pretty much stick to 60% shares, 40% bonds, but was going to move everything into shares with world wide exposure to bypass the hard Brexit risk. I'm not an active investor, but the hard Brexit risk is pretty well signposted, and I can't bring myself to sit back and ignore it entirely.

Having read durhamborn's thread I'll probably change tack, and stick the bond allocation into T-bills instead, and just rebalance the international/UK exposure on my share allocation.

Thanks everybody for the input 

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On 30/05/2018 at 09:31, SpectrumFX said:

I've come to the view that the deal with the EU is all flim flam, and we're most likely going to crash out of the EU with no deal - on WTO terms.

 

I agree the deal is All BS. However i disagree with your likely outcome, we are far more likely to stay in with some half arse deal to stay in the single market, guaranteed to be screwed, as the politicians will never vote in parliament to break the status quo.

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8 hours ago, Green Devil said:

I agree the deal is All BS. However i disagree with your likely outcome, we are far more likely to stay in with some half arse deal to stay in the single market, guaranteed to be screwed, as the politicians will never vote in parliament to break the status quo.

Well that's the two options, hard Brexit, or remain on worse terms them before.

You may be right, but what leans me towards hard Brexit is the Tory leadership selection process. They've got to go out to their membership, who would only back a candidate offering hard Brexit.

 

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2 hours ago, SpectrumFX said:

Well that's the two options, hard Brexit, or remain on worse terms them before.

You may be right, but what leans me towards hard Brexit is the Tory leadership selection process. They've got to go out to their membership, who would only back a candidate offering hard Brexit.

 

I dont think it has a lot to do with leadership. You will never get a hard brexit through parliament. Since the ammendment to 'stay in' rather than crash out, if parliament wont approve the deal, if no deal is reached, hard brexit will averted. And parliament is mostly remain. I dont trust the tories to leave. This is all hot air.

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Posted (edited)
9 minutes ago, Green Devil said:

I dont think it has a lot to do with leadership. You will never get a hard brexit through parliament. Since the ammendment to 'stay in' rather than crash out, if parliament wont approve the deal, if no deal is reached, hard brexit will averted. And parliament is mostly remain. I dont trust the tories to leave. This is all hot air.

My understanding is that in the absence of a deal the default is hard Brexit.

Article 50 has been triggered, and come march 2019 we're out. There's therefore no need to get anything more through parliament for hard Brexit to occur.

You're right that parliament is a remain stronghold, so they'll try to push a deal through. But the only deal on the table will be remain on worse terms.

I don't think that the wider Tory party will wear it. They'll kick May out and put in Moggy. 

Edited by SpectrumFX

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9 hours ago, SpectrumFX said:

My understanding is that in the absence of a deal the default is hard Brexit.

Article 50 has been triggered, and come march 2019 we're out. There's therefore no need to get anything more through parliament for hard Brexit to occur.

You're right that parliament is a remain stronghold, so they'll try to push a deal through. But the only deal on the table will be remain on worse terms.

I don't think that the wider Tory party will wear it. They'll kick May out and put in Moggy. 

I think there was an ammendment added that said if the house doesn't like the deal then they can stay in.

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56 minutes ago, Green Devil said:

I think there was an ammendment added that said if the house doesn't like the deal then they can stay in.

I thought it was accept the deal or not, and that the consequence of not accepting the deal offered by the EU would be hard Brexit on WTO terms.

In any event, at this stage unilaterally revoking the triggering of the article 50 process, and simply cancelling Brexit would probably cause as much of a shock as Brexit on WTO terms. It would properly kick off.

In either scenario I'd like my stash out of sterling denominated assets.

xD

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22 hours ago, Green Devil said:

I think there was an ammendment added that said if the house doesn't like the deal then they can stay in.

We’ll fall out next year, even if the house doesn’t like the deal

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