Will Brexit break Emerging Markets' back?
governmentsandmarkets.com
governmentsandmarkets.com
I've noticed a fairly consistent and unmistakable thread of ageism in the brexit articles and discussions I've seen. It would be helpful if the denigration of classes of people weren't a part of the debate.
This would make an interesting business case for a startup, and I can imagine that hedge funds and investors are already using such tools to their advantage, it would be hugely beneficial to have something like that for the general public to use though.
Actually it wouldn't. The world is more chaos theory than determinism in political scales.
A complex dynamic system will have evolutions that follow a probability distribution. The simulation should approximate the p.d., and that is useful information.
We do this with weather, market forecasting, and physical modelling.
Chaotic systems (as in chaos theory) don't make predictions either, whatever the probability distribution. Too many factors and butterflies in Beijing.
>We do this with weather, market forecasting, and physical modelling
Don't know about physical modelling, but in weather and market forecasting we do it with dire results.
The butterfly-in-Beijing metaphor is normally a good sign of someone who misunderstood the dynamics of complex systems. IIRC there's a lecture series from Santa Fe on intro to complex dynamics that might help.
And 'dire results': the tyranny of the perfect! We get very good results from both, compared to the intrinsic information of the system. Again you're thinking about single results rather than probability distributions. It's a hard habit to crack, again, an intro to the field would help.
I didn't speak of "complex systems" (heck, even a three-body gravity system is complex), I spoke of chaotic systems.
>And 'dire results': the tyranny of the perfect! We get very good results from both, compared to the intrinsic information of the system. Again you're thinking about single results rather than probability distributions.
No, I'm thinking about the inability to e.g. make any weather forecast for more than 7-10 days at most.
>It's a hard habit to crack, again, an intro to the field would help.
Again with the condescending study suggestions. It's a bit rich from someone who asks for a pie in the sky "social oracle".
I'm sorry it came over that way. But there should be nothing condescending about pointing out that you are misunderstanding the field. Knowledge and science are a real thing, they don't exist to inconvenience you.
Complex systems (including chaos theory) is a fascinating area of math, for which there are a lot of learning resources online. It is not an insult to encourage you to go down the rabbit hole and move beyond the superficial (and wrong) stereotypes.
> It's a bit rich from someone who asks for a pie in the sky "social oracle".
Different person. Check the GP. Also probably straw-man, but you'd have to ask the GP.
I know it sounds cynical but I don't think such a simulation tool would make any difference to convince the general public.
As a thought experiment, imagine if we had a computer simulation in the spirit of Conway's Game of Life[1] or Schelling's Segregation Model[2] to simulate the spread of viruses and breakdown of herd immunity when you have anti-vaccination parents. Showing that "evidence" to anti-vaxxers isn't going to change their minds because they distrust the "government" and "scientists". (E.g. "And who created that simulation?!? The government scientists who want to make our kids autistic!")
Same situation with Brexit. The big multinational companies favor the EU but the "little guy" sees his job getting threatened by immigrants. Asking everyday people to be scientific and weigh the "big picture" instead of being emotional about their immediate livelihoods isn't realistic.
https://en.wikipedia.org/wiki/Prediction_market
Unfortunately, they are generally illegal in the US.
Prediction markets aren't magic, they aggregate views. If they say there's a 15% chance of something happening, by golly, sometimes it will happen. The point is (1) they are self-correcting and (2) they have a much better track record that polls. Not even the "market can stay irrational longer than you can stay solvent" rule applies. With prediction markets, you know exactly when and how the outcome will be settled.
There's a simple fallacy here - you can't use a market mechanism to define the probability of the outcome of a one-off event like a major referendum.
All you have are hopes and fears about the probability, which are always - by definition - limited and subjective.
In fact you're simply quantifying opinions about opinions. That's one step removed from what polls do. Polls fail because of practical sampling errors (and sometimes because of political bias) - not because no one understands the theory of polling.
There's no way a prediction market mechanism can be self-correcting, because by the time you have real data the question is settled.
Some people may find this kind of thing useful. I'm not convinced it's any more than entertainment.
> That makes prediction markets non-falsifiable.
Why ? We can just make a sufficiently big list of prevision which are estimated around 15% now and check in one year that around 15% of them happened.
No, it means you can't assess prediction markets, or any mechanism for making probabilistic predictions, from a one-off event. I was responding to tobias3 regarding Brexit.
> There's no way a prediction market mechanism can be self-correcting, because by the time you have real data the question is settled.
You misunderstand. I'm not claiming that the market for a single event is self-correcting. I'm claiming that if someone discovers a bias in prediction markets as a whole (e.g., the pop-science biases discussed in the Economist article), then traders can profit off this bias and it will be removed from the market's prediction.
There's a lot wrong with your other points, but it would take too much discussion to draw it out.
It was 10% in the hours after the polls closed.
The odds for a Leave victory in England were out of step with the odds for a UK wide leave vote for many hours (even though overall Leave was never going to be happen without England going Leave).
Consider a perfect prediction market. This means that if it says "the probability of X is 0.6" 100 times, then approximately 60/100 times X will occur. If you wrongly interpret that to mean "X will occur", a perfect prediction market will be "wrong" 40/100 times.
That's your failure to interpret the market, nothing else.
Of course this is difficult to measure, because there are not enough natural experiments (i.e. 100x Brexit) and there are many variables at play here.
We'll have to wait for papers with regards to Brexit + predicition markets for a more detailed analiysis, but still, for the time my trust in prediction markets is down a bit.
(the reason I did this is because I'm pro Remain)
https://www.amazon.com/gp/aw/d/B00KTPM1H6
For a survey of (human) tools for this kind of analysis.
But in all honesty, it sounds like you are talking about a black swan[2] detector: The current immigration crisis plays a big role in the Brexit. Who could have predicted how western policy about everything in the middle east led to the growth of (the fear of) ISIS? If anyone wear to reliably predict these really big abstract _changes_, they would probably keep it to themselves and use it to make money on the markets.
[1]: https://en.wikipedia.org/wiki/Scenario_planning [2]: https://en.wikipedia.org/wiki/Black_swan_theory
There is an asset bubble, for instance, at the moment (houses and a lot of other things are more expensive than justified). Gold price seems suppressed. And a government debt bubble. And a China bubble (China is exporting more than is justified by the economics, probably due to state subsidies). There was an oil price bubble, that could reflate (it would take a 5% difference in oil supply, maybe less, for the price to go back to $100 at least temporarily). Renewables could destroy the energy economy (this is happening, could accelerate. E.g. we could find a fantastic new battery principle, easy cheap large scale energy storage. The world would change to accommodate that faster than anyone can imagine). EU disintegration, and related shocks : e.g. a Deutsche Bank bankruptcy. Central banks switching tactics (either to helikopter money or the other way, interest rates back to 4%). More US states/territories cities going bankrupt. Large scale terror attacks.
All of these would be large to massive financial shocks. They're also very likely all going to happen. Most of them are going to be caused by another one in that very list, like domino blocks all lined up, but currently standing up. Only one will really be set off in truly unpredictable fashion, and cause the other dominoes to topple. The question is, how to find (and time) the drop that overflows the bucket. That is not a trivial question and the answer could be that said drop won't fall for another decade (or two, why not). That's unlikely, but certainly not impossible.
Whilst not many people were expecting the Brexit scenario to pass, ever since the Greek crisis (5-7 years ago now, depending on what event you think set it off) people have been worried about EU disintegration. That the EU, for various reasons, from languages, over border protections to finance habits does not have what it takes to stay together. Apparently they were right. The real fear is that it will cause bank bankruptcies. That may be underway. That may already have happened (a lot of EU banks aren't far from bankruptcy)
First, there is a real possibility that Britiain will not exit the EU at all.
The referendum is actually non-binding in a legal sense. Parliament could vote to suspend it tomorrow. Another referendum could be held. The Privy Council could even intervene on its own authority.
Second, Britain has yet to invoke Article 50 of the EU charter, which would formally begin the separation process. Despite the insistent (and foolish) efforts of the French and German governments for Britain to invoke Article 50 immediately, they have not done so, and thus remain an EU member in good standing.
Third, there is a substantial body of evidence that a large portion of the "Leave" voters had no idea the consequences of their actions.
The areas that have gathered, or will have gathered by week's end, as many signatures as the original Leave petition include; Scotland, Northern Ireland, Wales, and London. In short, almost all of the U.K., save rural and smaller cities in England proper.
Northern Ireland is even holding talks with the Republic of Ireland to unite the island. Protest Northern Ireland frantically scrambling to join the Catholic Republic of Ireland, and receiving a tepid response, is something I never thought I would see in my lifetime.
The nation of Britain is disintegrating into its constituent parts.
Great Britain may never leave because there simply may not be a Great Britain any more.
Finally, Britain's elite are already seeking to mitigate the effects of the referendum. Even if they hold their country together successfully, Britain will almost certainly seek a treaty to retain their economic rights while gaining some control over their immigration process.
Let's not start burning the furniture yet. Britain was independent for most of the post-War period.
The current panic may be merely the flip side of irrational exuberance.
On decentralization: http://magarshak.com/blog
Now the second-biggest economy is leaving the EU, with unknown implications for lots of financial instruments ...
There is at least a serious case to be made that this could be bad.
Not true, see http://www.bbc.com/news/uk-politics-eu-referendum-36621822
Ireland is quite literally the first colony of the British. It only recently emerged from centuries of civil war, and the Protestant-Catholic conflict has abated within the past five years.
For the topic of unification to even be seriously discussed is extraordinary, and without precedent.
Forgive me if I don't believe a government funded news outlet, with a vested interest in the outcome, a deep cultural belief in Anglic superiority, that was so sure the U.K. independence vote would fail, when they discuss issues of Irish affairs.
One could be forgiven for believing the government line at the moment. But if viewed through the eyes of Irish history, current events are clearly unprecedented.
In Ireland, there are many people alive who remember the Troubles in vivid detail. For the Deputy Prime Minister, and more importantly several prominent Anglo-Protestant politicians, to even broach the subject is to risk reopening Pandora's box.
Even now there are armed groups operating in the RoI with the explicit goal of finally driving the British from their lands.
Even a cursory understanding of Irish history is sufficient to appreciate that the current discrete (and even public) communiques would be in the realm of fantasy even a few short years ago.
The vast majority of the Northern Irish voted to remain in the E.U. With the loss of their British patrons, as the inevitable loss of Scotland unfolds, Protestants in Northern Ireland already know that the E.U. is their only assurance of security and insulation from the chaotic collapse of Britain.
As such, with all these forces, this vote genuinely reshuffles the deck, in Europe itself, even if Britain now backtracks.
Edit (I forgot my point and finished too soon :)
If the EU relaxed a little the departing member state may democratically u-turn.
A Trump win in November, or even the prospect of it, helps the UK now. The problem with this idea of an Anglo trade and defense block with US, UK, Canada and Australia though, is the US is not Anglo enough any more and Canada's PM is French and liberal. So they have to talk about freedom from regulations and such, and hope enough non-anglos buy in. It seems like the narrowest of paths to me.
The US and their currency will remain strong only through immigration and decent birth rates. Closing the borders just won't work.
That's wrong on several levels:
(1) Wales, like England, voted Leave, (2) The referendum only covered leaving the EU, not relative preference for leaving the UK vs. leaving the EU, (3) While NI voted by majority to stay in the EU, the issue of leaving the UK vs. staying in the UK is one of recurring interest in NI, and every indication I've seen is that the majority that favors staying in the UK is larger and more solid than that that prefers staying in the EU. Sure, NI republicans are making a big deal of the Remain vote in NI, but NI republicans are not in the same position as Scottish nationalists.
Of the four countries of the UK, the only one that seems to be more inclined to leave the UK than the EU is Scotland, which seems to have stayed last time it had an independence largely because of uncertainty over whether, if it left England, it would be able to smoothly join the EU. Brexit renders that consideration moot.
> The referendum is actually non-binding in a legal sense.
That's technically true (well, not entirely: it was legally binding as to the improved deal Britain had secured from the EU, which was expressly contingent on a Remain victory in the referendum. So, staying in the EU is already less attractive than it was before the vote -- when it was already not attractive enough for a majority of UK voters to want to stay.)
> Parliament could vote to suspend it tomorrow.
I'm not sure what that even means; the non-binding referendum already happened, and the action that would be needed to implement it (invoking article 50) is one of, as the sources I've seen have indicated, royal prerogative not dependent on Parliamentary action, so Parliament "suspending" the referendum or its would seem to be a meaningless symbolic act.
> Northern Ireland is even holding talks with the Republic of Ireland to unite the island.
No, its not. Sinn Fein has indicated that unification should be reopened as a topic based on the Remain vote in NI, but Ireland isn't interested, and neither (unsurprisingly) is the unionist-majority NI government.
> Finally, Britain's elite are already seeking to mitigate the effects of the referendum. Even if they hold their country together successfully, Britain will almost certainly seek a treaty to retain their economic rights while gaining some control over their immigration process.
Of course they'll seek to get all the benefits of EU membership without the bits they don't like. But its not really likely that they'll get that.
Naive young people.
"I only believe in statistics that I doctored myself"
People might not be interested in the details, or it can be interpreted as sloppy journalism. Either way I'm not convinced (hence the reference to Remain).
Germany = $285,200,000,000 and United Kingdom = -$123,500,000,000
Isn't it a chicken-and-egg-problem and we can't just say: because Germany is producing and Britain is consuming, the latter will be worse off by Brexit?
For many developed economies General Trade Agreements are the last straw of growth. And with Brexit both sides of the Channel loose.
And another spin: A consumerist economy (US, UK) seems to have its own benefits, in that it can much easier survive on its own.
Definitely. It's definitely.
I know people who can't spell better than an average sixth-grade student, but they are brilliant at what they do.
You have to admit, spelling is at least somewhat arbitrary, especially in the English language. How do you spell 'centre,' for example?
Best bet according to the article is on Middle Eastern markets
Paging dang...
It would really be good not to use abbreviations in the title if it is not immediately clear what it is referring to in context. I understand it is just a copy of the original title.
I don't like watching the american politically-correctism and identity crises being exported overseas. This sort of protectism creates a deaf and blind democracy that is also very prone to logical errors in its thinking and decision making, and renders actual social problems irresolvable.
I've seen lots of other comments and articles that not only resorted to name-calling, but also tried to use the fact that people were older as prima facie evidence that their reasoning was bad.
> but also tried to use the fact that people were older as prima facie evidence that their reasoning was bad.
Like it or not (I don't like it either), but that may be an argument. Calling that denigration is the easy path out, but it leads nowhere. What has to be done is to refute it, however vulgar that might be. We're dealing with the results of a vulgar, uneducated, haphazard decision anyways.
You could use that as an excuse for any sort of attack. In general, and especially here on HN, ad hominem is frowned upon.
There seems to me something profoundly contradictory about this slur, but in any case it's a nasty breach of civility and you can't post like that here.
We detached this subthread from https://news.ycombinator.com/item?id=11981009 and marked it off-topic.
It's common for people to behave rudely like this and, when asked not to, pretend they were merely stating neutral facts. Perhaps you genuinely think so; in that case the answer is to develop a more accurate sense of what the HN guidelines mean when they talk about being civil. If you continue to break them as you repeatedly have in the past, we're going to conclude that you don't want to use HN as intended and ban your account.
It's not hard to learn what the standard here is and keep to it. Many users have had to do so (myself included). The only question is whether one wants to.
Why did I call those three words pejoratives? Because that's how they work in the context where you used them: "isms" is obviously a pejorative, "American" bound to it becomes a national slight, and "your" a personal one. Perhaps you didn't intend them that way, but I assure you that for many readers they would acquire that connotation en route.
I don't have any desire to ban you, but I do wish you'd take on good faith what I'm trying to explain about how HN conversations are supposed to operate. It all comes from long hard experience trying to prevent an internet forum from degenerating. You clearly have some interesting things to say, so if you'd join us in the work of erring on the side of civility, HN would be better.
Labor and Conservatives just didn't take the concerns of the majority seriously.
The next deal will not be as good. In fact it will be considerable worse. As the UK does not have any leverage.
The EU can sort of manage without the UK.
But the UK outside the EEA would be much, much poorer.
The UK was on route to become Europe's biggest economy. But decided to follow a bunch of charismatic populists instead.
A related issue is capital flow restrictions, and these are arguably even easier to put into force. Brexit is a major defeat for liberal "anglo saxon" free market policies, and there are many in the world who do not buy into them, including in the EU itself. Current account deficit countries such as Turkey and South Africa are heavily exposed, as is the dollar. This last point makes it unclear that the dollar is the obvious long term safe haven. Indeed Friday's Yen price action shows that currency as being potentially the most obvious candidate for a big rally, along with gold. The latter is particularly well placed if the G7 central banks, in full panic mode, begin to implement large further slugs of QE or negative interest rate policies.