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On the betting markets it’s now a 74% chance that TMay will go this year

March 20th, 2019

And the money moves to a 2019 Q2 Brexit

Mike Smithson





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Britain has deceived itself about the EU for decades and is doing so again

March 20th, 2019

“Oh what a tangled web we weave. When first we practice to deceive.”

Britain has deceived itself about the EU for decades. A list of all its self-deceptions would be interminable but here are some:-

  • The Common Market will never get off the ground / be important.
  • We can set up or belong to a rival organisation.
  • We don’t need to belong.
  • We do need to belong and they will be desperate to have us.
  • We are joining a market only and this has no political implications.
  • We will be able to play France off against Germany and vice versa.
  • We can reform it from within.
  • We will be at the heart of Europe.
  • Monetary union will fail.
  • Enlargement to the East will be a bulwark against centralisation.
  • We are the second biggest contributor. They must listen to us.
  • A single market has no political implications.
  • Outside the EU we will be free to do what we want.
  • They need us more than we need them.
  • We are their biggest market. Of course, we’ll get a good deal, the easiest trade deal in history.
  • They will blink at the last minute; it’s the EU way.
  • A no deal exit will harm them more than us.
  • The EU is a declining market for us. We are better off making trade deals with other countries.
  • By voting to leave we are taking back control

And so on. We are deceiving ourselves now in imagining that the EU will ignore its interests to accommodate the manoeuvrings of our Parliament. Indeed, rather than focus – as the government appears intent on doing – on the wickedness (or otherwise) of the Speaker or on persuading the DUP (the DUP in the Government’s imagination being always on the brink of agreeing) or on finding some arcane Parliamentary procedure to bore MPs into voting for the transitional agreement, it ought to look across the Channel and listen to what EU Heads of Government and Barnier are saying.

And the message is clear. If Britain wants an extension to Article 50 it needs to be clear about what that extension is for. It doesn’t want to hear a cry for help from May.  Or waffle. Or claims that if only there were more time the Withdrawal Agreement would pass. Or yet another demand for the backstop to be changed or removed. What, exactly, can Britain offer to make it in the EU’s interests to grant an extension?

Well, there is one obvious answer. The EU does not want the consequences of a messy departure by Britain. However many preparations it makes, this will be a shock, one borne by some countries more than others. The consequences of such an economic shock cannot easily be predicted and could be far-reaching.

At best, it is a nuisance which the EU does not need at a time when many of its other members have their own political turmoil, economic growth is anaemic, and the US and Russia are unpredictable allies / neighbours. But the EU will not pay any price to avoid this, no matter how often some in Britain say that it should.

Britain’s political class seems divided between those who think that saying that they don’t want a No Deal exit will be enough to make it disappear and those airily handwaving away any concerns with such an exit as if these are made up by those out to get us.

Neither group seems to have wondered what other countries will think of a Britain which causes an economic shock through a failure to make up its mind or to act on its apparent decisions.

However difficult a messy exit may be for the EU, it will likely be worse for the UK. Not just in the short-term but in the long-term, in how other countries, beyond the EU, will view Britain. It has not earned any credit in the manner of its leaving.

What might the EU want in return for an extension? There are three options:-

  1. A General Election. This might change the government or the Parliamentary arithmetic and allow the WA to be agreed. More likely, it will not. An increased majority for the Tories – far less likely than the Tories seem to think – might simply increase the number of MPs willing to ignore May and her deal. A new government might not have a working majority, might demand fresh negotiations, be equally incapable of agreement or of imposing its will on Parliament and might raise new concerns for the EU. There is no certainty for the EU in a General Election.
  2. Fresh negotiations with different or no red lines. Starting the whole process again. Most unlikely with the current government and Parliament. And equally uncertain and time-consuming for the EU. Why would they want to have this running sore within the EU?
  3. A new referendum: to determine whether the voters are willing to go ahead with Leave on the basis of the current WA – and its implications for any future trade deal. Or not. From the EU’s perspective, a referendum making it a choice between Leave on the agreed terms and Remain on current terms is clear. It allows for the possibility of a different answer now and one which is in the EU’s long-term interests. Whatever the frustrations caused by the last few months, for the EU to lose Britain is a serious failure and weakens both the EU and Britain.

Such a choice raises obvious political difficulties here. The EU may no longer care about those. It may not want to make it obvious that it has imposed such a choice but may also worry that, unless it makes this crystal clear, Mrs May won’t understand that Britain is asking the EU for a favour and will have to do what it is told. (Mrs May is not just nebulous in what she says to the EU but also in what she says to Parliament about what the EU has said to her. Trust in her is low.)

Even at the risk of facing yet more criticism from those who hate the EU, it may now prefer to force Britain to make a clear choice between the only two realistic choices it has, if it wants an extension from the EU. It may want to make it brutally clear to Britain how much it is deceiving itself in thinking that a slogan (“Take Back Control”) is a substitute for a properly thought out strategy and policy.

But the real risk may well be that the EU no longer wants Britain back, that what it has seen of Britain – in close up – over the last two years and particularly over the last few months has saddened, angered and infuriated it so much, its patience has been so exhausted, that it would prefer to take the hit of a messy exit rather than accommodate Britain any more, other than on the EU’s own terms. 

It may decide that it may as well live up to the caricature that Eurosceptics have always had of it and impose its will on Britain. It may feel that Britain’s self-delusions about what it can demand or expect as a departing member – and thereafter as a third country – need to be shattered rather than indulged. If Britain does not wish to use the only option it now has available to it – revocation – then it should not be surprised if others will determine what it can do. Britain may be about to learn what being a vassal state really means.

Cyclefree

 



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Not before 2022 now joint favourite with Q2 2019 for when Brexit happens

March 19th, 2019


Betdata.io chart of movement on the Betfair exchange

So much potentially could happen in the ten  days that remain between now and March 29th it is inevitable that there has been an enormous amount of movement on this Betfair  market on when Brexit will actually happen.

As can be seen Q2 2019 has dropped very sharply in the last few days partly in response to the difficulty Mrs May has had in getting support for her deal and partly due to the assertions yesterday by the Speaker.

Tonight the speculation is that the postponement that the government is planning seek could end up as 2 years which is far in excess anything that the hardline leavers wanted.

I find it very difficult to read the current politics and I’m sure that I am not alone. The likely failure to meet the March 29th deadline is almost certainly going to lead to Brexit being less likely to happen.

In all political betting it is wise to check the actual terms of the market and this is Betfair’s  definition on this one below.

“For the purposes of this market leaving the EU is defined as the date when the treaties of the EU cease to apply to the UK. Examples of when this might occur include, but are not limited, to: the date specified in a withdrawal agreement between the UK and the EU; the end of the two year negotiating period (29/03/2019) as set out by Article 50 of the Lisbon Treaty (or any extension to this time period); or the date of the repeal of the 1972 European Communities Act. If more than one of these events were to occur, this market will be settled on the first of these events to occur. In the case of the two year time period in Article 50 being extended, via a unanimous vote by all EU Member States, we will settle this market on the extended date. This market will settle when the UK leaves the EU even if parts of the UK (e.g. Scotland, Northern Ireland) leave the UK or receive special status within the EU.”

Mike Smithson




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Matthew Shaddick of Ladbrokes on the WH2020 betting phenomenon of Andrew Yang

March 19th, 2019

Why the US betting support?

The 2020 US Presidential Market is gathering steam right now with most of the top-tier Democratic possibles having announced their candidature. Just waiting on Joe Biden who has recently become favourite for the nomination at Ladbrokes. No doubt his price will drop a little further if and when he announces, but the bigger impact on the overall market would be if he says no.

Oddly though, the biggest loser with Ladbrokes would be someone who the vast majority of US voters have never heard of, and typically polls at 1% (if pollsters even bother to include him):Andrew Yang.

He’s been backed down from 200/1 into 33/1 to be elected President and now shows at just 16/1 fifth favourite to be the Democrats’ nominee. Amazingly he’s now ahead of people like Elizabeth Warren and Cory Booker in the betting.

He seems like a smart guy and is pushing a few unique policy positions, notably Universal Basic Income. His odds are no doubt massively influenced by his appeal to a young, internet savvy fan base and this feels a lot like the huge 2008 gamble on Ron Paul to become President. Despite hovering at around 5% in polls of Republican voters for most of the run up to the primaries, Paul got down to around 12/1 in the outright Presidential odds as an army of fans backed him to win.

Also, take a look at how highly American punters like Yang’s chances. Here are the latest odds from PredictIt.

That makes him about 9/1 on the only platform that US citizens can legally bet on politics. Although people from outside of the US can’t trade on PredictIt, it will have a knock on effect on the rest of the worldwide betting market, as a lot of people will no doubt assume that the US facing odds are more accurate. I think there’s a big problem with this though which arises from the very restrictive terms on which PredictIt allows people to bet. For regulatory reasons, they don’t allow people to have more than $850 at stake on any one contract, which hugely limits the ability of layers to resist market moves on outsiders like Yang (who probably has a lot of small-staking fans).

PredictIt also has some quite high commission charges, which makes it quite hard for anyone to correct any arbitrage opportunities, even if they could get access to US and non-US odds. So, we might continue to see some pretty big differences in the two markets right up until election day.

On the plus side for Yang, the rules for who gets in the Democratic debates later in the year mean he’ll probably make it (because of the number of individual doners to his campaign) whatever his opinion poll rating shows. Perhaps that will give him a big boost, although he probably wouldn’t get more than a few minutes to say anything very much.

I won’t be backing him, but I have had a bit of money on another little known outsider, Pete Buttigieg, who I think might have a better chance of making a run for it. Ladbrokes have him at 50/1 to be elected POTUS. Don’t know if anyone has any past examples of 50/1 Presidential election winning bets?

Matthew Shaddick



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You can’t blame Bercow for enforcing what is a sensible precedent

March 19th, 2019

The real problem is the totally divided Tory Party

The speaker, John Bercow, as you’d expect, gets a lot of stick from the right wing press this morning following his ruling yesterday stopping the tabling of the government motion for a third time.

Sure a consequence of it is that it might make Brexit happening a tad less likely and that might be what Mr Bercow himself  wants. If he did go wrong, I’d suggest, it was not blocking last week’s vote which also fell foul of the precedent.

Most bodies that I’ve sat on or have been associated with over the years have had rules similar to that which Bercow is trying to enforce. Once something has been decided then you can’t go on repeatedly putting it forward within a specific timescale.

The real problem is that the Conservative Party remains totally divided on the issue of Europe a fault line that has existed for several decades. Whoever had been the Tory leader and prime minister at this point was going to find it very difficult securing the agreement of the Commons particularly given the fact that the party is in a minority.

I don’t think that Mrs May is helped by her rigidity and her apparent lack of ability to sell things. But you have to admire her resilience.

In many ways the developments over the past few months on Brexit have totally justified her decision two years ago to seek to increase the party’s majority by calling an early election. She foresaw then that there weren’t the numbers, given the party splits, to get things through the Commons. The only problem was that when it came to voting in June 2017 she lost seats rather than gained them.

Where do we go from here? My guess is that they’ll be trying to find a way of getting it before the House again in a manner that Bercow will accept. It might just be the fact that because Brexit has appeared in jeopardy over the past 24 hours could make a third vote, if it happens, more likely to produce the outcome that Mrs May seeks.

Mike Smithson




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While all the focus is Speaker Bercow

March 19th, 2019

And if you haven’t seen this

The main overnight Brexit news



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Bercow’s ruling adds to the Brexit uncertainty

March 18th, 2019

It’s looking more like TMay will have to ask for more time

So another day and more uncertainty over what is going to happen over brexit just 11 days away from the March 29th article 50 deadline. The Commons speaker, John Bercow, ruled in the house this afternoon that the government could not bring the deal plan back to the house for a further vote. He was applying the the rule that in any one session The Commons can only make a decision once.

This was very much a surprise and makes it more difficult for Theresa May who had been hoping that she might just get enough MPs to support her deal in vote intended to take place tomorrow. My guess is that some smart wordsmith with be trying to rephrase the motion that’s been rejected twice in a form that has the same effect but is different. It would be then be back in Bercow’s court.

A problem for ministers is that there has been bad blood between the Tories and the Speaker going back to the coalition years.

Unless a procedure fix can be found then the next stage is surely going to be the government having to ask Brussels for an extension to the article 50 period. The problem here is that it is thought that ministers would have to state a reason. The other 27 Nations within the EU are hardly going to grant the request unless they can see what it is for.

Those hoping for another referendum have been heartened by the news and on Betfair it is now a 28% chance that such an event will take place this year.

Mike Smithson




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The betting money’s going on the Commons approving the deal

March 18th, 2019


Betdata.io chart of movement on the Betfair exchange

Up from a 16% chance to a 32% one in five days

At the start of another dramatic week on Brexit in the Commons there has been more news of CON MPs saying they are ready to back the deal just 10 days away from the Article 50 deadline.

What we don’t know is whether there will be enough of them in order to push the total beyond that which is required for Mrs May to get a majority. She’s failed before but this time with the deadline hovering before everybody it might just be that this goes through. At least that is what the betting markets are starting think as seen in the chart of the Betfair Exchange above.

It has been fundamental to Theresa May’s strategy throughout that when faced with the prospective of No Deal and possibly the loss of Brexit altogether her party would get together behind backing what she has been trying to get agreement for for months.

Will it work? Will some LAB or other party MPs either abstain or shift over to her side? The Indy’s John Rentoul, who has been keeping a close eye on the actual numbers, was suggesting yesterday that the only way this could go through if was if a number of Labour MPs moved to back it.

The view is that this will only happen if the chances of it succeeding look pretty good. There’s no point in being a LAB rebel and “voting with the Tories” quotes if it ends in failure.

Meanwhile there is this:

Mike Smithson