Last night my wife, Marina, and I watched live the debate at Wembly Arena in over Brexit, BBC, with three on each main side. The betting markets have never said Leave will win, with their lowest forecast being 58% Remain. Now, after the assassination of pro-Remain Labour MP by a neo-Nazi.the prediction markets have gone to 75% for Remain, and on Monday, the markets and the pound surged. But the 'shpolls remain near tied, with the main one on this morning's FT with Leave still ahead by one point. Looks pretty close, like a dead heat.
So what may be pushing in the Leave direction after the assassination of Jo Cox, is the debate last night, with 6000 in the live audience, and without doubt most of UK watching. Behavioral economics comes in here, particularly Danny Kahneman's peak and end point theory. What matters for memory is the peak point and the endpoint. In this, I am not sure about the peak point, but somehow the main pro leave leader, Boris Johnson, got to speak last, and he really jammed it up, declaring that tomorrow will be an "Independance Day!" for the UK. That drew the only standing ovation of the evening.
Dead heat.
Barkley Rosser
3 comments:
"Independance Day!" for the UK? Sorry but they do not get to celebrate that on the 4th of July.
The Bloomberg Brexit Tracker:
http://www.bloomberg.com/graphics/2016-brexit-watch/
With 76% of the vote in,Leave has a 3.6% lead. Looks like Brexit will win. Sandwichman may think this is great. I do not, and I do worry we may see a similar surprise this fall in the US. Boris Johnson is indeed the Donald Trump of England.
I am at a conference in Italy right now that Alan Kirman is attending. He is very pro-Remain and will be very upset about this (it is now early in the morning here). He told me yesterday that not only is Boris Johnson an American (as well as British) citizen, but that apparently he is in official trouble with the US government because he does not file a US income tax return. Apparently he views himself as being above US law, although he has not renounced his citizenship.
So my gut feeling that his cloaing "independence day" declaration would have a big impact is proving to be right. This does remind me of 1980 when Reagan pulled his "There you go again," thereby winning his debate against Jimmy Carter, who most thought "won on points." Something like this could happen this fall, although despite Hillary's distinct wonkiness, she seems better at making comebacks to wisecracks than some. I just hope she is not put in the situation the pro-Remain folks were in that Wembly Park debate, where Boris go the last word and managed to get his big punchline out without any comeback.
Oh, btw, I guess this means that we shall definitely not see an interest rate hikes by the Fed, especially now that James Bullard is pushing a multiple regimes with switches line, which says we are in a slow growth regime where the natural rate of interest is lower. I do worry that the US and world economy is in a very fragile state, and this bloody Brexit may just push it over. Hillary is not so far ahead of Trump that a real downturn of the US the economy, with a nice market crash in say October could not indeed put Trump over.
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