Yes the Brexit clock is ticking away...on 1 April 2019 UK will become the world's biggest fool unless an agreement to withdraw article 50 is handed in or some sort of Transitional deal is negotiated.  The reality is the UK government does not have a plan, does not understand the legal complexities and  has a weak and pathetic leader combined with a weak and pathetic team of Brexiteers Bojo, Liam Fox David Davies and Michael Gove. The red lines of control over borders, ending the jurisdiction of the European Court of Justice and not being part of either the Single Market or Customs Union have been drawn up by Theresa May and her team. As such they are risking pushing the UK economy over a cliff. There is also the fact that leaving the EU means we are leaving the open skies policy so in theory UK flights to Europe may not be possible after April 2019 for a period of time maybe weeks or months.

The British people and this government need to wake up to the reality that the UK is in a perilous position banks are already relocating a bit of their business, we are losing the European Medicine Agency and the European Banking Association, investment is plummeting and uncertainty is increasing.  Business need to plan ahead but have to assume the worst case scenario may come to pass. Please listen to the talk below by Michael O'Leary who is warning of the potential calamity ahead for UK aviation and tourism industry unless the UK government gets its act together. The foolish and costs of Brexit is becoming clearer and clearer by the day. A second referendum is needed to give the UK citizens a way out of this - the Brexiteers are afraid of this as they know their lies and deceit will not survive the second scrutiny of the UK electorate.

I think there are a few crypto currencies that will probably survive over the longer term because they have a good ecosystem and a critical mass of adopters. The three I think most likely to survive are bitcoin, ethereum and ripple. I am afraid for the rest it is way too late and some of the so called initial coin offerings (ico) are basically "me too" scams where I would expect "investors to lose virtually all their money. Initial coin offering have this year raised over $1.3 billion so far in 2017 but some of them seem like scams to me:

Look at eos.io which raised $200 million in an ico talk about its coins which  "do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS platform”

Then there is the Tezos.com coin which has raised over $208 million it states "Bitcoin, Ethereum and Tezos are all decentralized ledgers powered by a blockchain. Bitcoin was the first public blockchain and introduced the first truly decentralized form of electronic cash. Ethereum followed suit by including smart-contracts in its platform, allowing a greater range of application to be developed. Tezos takes this concept one step further by letting participants directly control the rules of the network. It is designed to evolve, so that the next generation of ideas doesn’t have to start over as a new blockchain." What the hell does that mean and is it enough to raise so much money ???

This kind of thing reminds me of the infamous netj.com initial public offering of 1999: “netJ.com conducts no substantial activity of any description” and the company “has no plans to conduct any substantial business activity of any description in the foreseeable future.”

There is a nice report on the ICO craze from autonomous LINK1
 that I recommend for a read. I see the main threat to the top 3 coins (bitcoin, ethereum and ripple) being a company like google or amazon or even microsoft getting into the game. They have a big user base that I think is critical to getting a currency adopted by a critical mass and people have confidence in such companies. The other threat is when central banks decide to launch crypto currencies either as parallel currencies to their own national currencies or as replacement - central banks and government have to power to make such currencies legal tender it could be a great way to relieve pressure on public finances as they (the government) could decide to keep say, 20% of the coins for themselves.

There are new coins arriving every day as anyone can launch their own coin - the best way to keep up with prices is to go to Coinmarketcap.com. There is also a nice Bloomberg story on the crypto coin market here Link2. Below is a list of 56 initial coin offering so far this year.

I will not try to be nice and understanding of the Brexiteers. It is no use trying to explain anything to the likes of Theresa May, Liam Fox, David Davies and Boris Johnson who still seem to live in cloud cuckoo land. They still do not seem to understand some basic facts about how the EU and it's single market works and the laws governing international trade. I don't mind the lot of them jumping over the cliff in March 2019 but I do object to them dragging me and my family and friends  over with them.

1) You cannot be selective when you have a free trade agreement - the Brixiteers think they can do sectoral deals for cars and perhaps pharmaceuticals and possibly agriculture. Sectoral deals are not allowed according to the WTO rules a free trade area must cover "substantially all trade" only then can it be admitted as an exemption to the WTO principle of non discrimination (that is we have tariffs against the US and Japan and not with the remaining EU27).

2) If you remain in the customs Union then you have to adopt the EU common external tariff, this means that you are not then free to do free trade deals with other countries. If you did so then that would undermine the common external tariff. So you are either in the customs union for good or you are not.

3) The EU 4 freedoms that is freedom of movement for goods, services, labour and capital are "indivisible" if you want free trade in goods and services then you have to allow free movement of labour and capital. If you restrict free movement of labour to control inward EU migration then you lose access to the single market.

4) You cannot say you wish to end the jurisdiction of the European Court of Justice and remain in the single market or customs union. The ECJ is the arbiter of the CU and the Single market so once you rule out its jurisdiction over trade and free movement of factors of production then you cannot be in either the CU or single market.

5) If you do not accept EU regulations then it becomes very hard to trade with them where you do not meet their regulatory standards. This means that if UK deregulates then it can only sell its goods and services into the EU if the standards are deemed to be "regulatory equivalent" and that is an ongoing process and means keeping abreast of changes in the EU regulatory environment.

There is a really nice video below where Michel Barnier makes these points in a crystal clear manner. The Brexiteers need to get up to speed very quickly or they will be dragging the UK economy and its citizens into a very hard Brexit. The clock is ticking and they need to get their act together ! Unfortunately, they are so out of touch and stupid that I can only foresee them being forced to understand the reality when it is too late. However, do watch the UK opinion polls as the costs of Brexitbecome clearer and clearer I expect the UK opinion polls to change in favour of remaining and it will be very hard to push some of the Brexit bills through parliament and the House of Lords. A second referendum may be the
only way out of this mess eventually.

I dashed to get my vote in with a couple of minutes to go last night - I can promise you I did not vote conservative ! Theresa May's vision of a hard Brexit was complete lunacy, she is unfit to be prime minister as she U-turns and does not have the intellectual capacity to properly lead the country. Her vision of the UK leaving the Single Market and Customs Union and exiting any rulings from the European Court of Justice was ridiculous as is made clear in this article by William Hutton LINK.

Her election campaign was unbelievably bad and the more it went on the more her majority dwindled as voters could see through her "stable and strong" nonsense. There will now be warfare in the Tory party as the hard line Brexiteers will be furious with her while the "soft Brexit" remainers who are still the majority of Tory MP's will now feel emboldened to stand up for what they believe in and hopefully will stop acting like sheep being herded by May and her fellow Brexiteers like Rees Mogg, Liam Fox, Bojo and David Davies. 

I also am grateful that youngsters decided to turn out in large numbers and influence their own futures. The net result is that a hard Brexit will now be off the cards and the chances of a second referendum have increased and a Norway type deal whereby the UK remains in the single market is much more likely. I believe the EU will spot the opportunity to offer a better deal fro the UK and to give comfort for those who wish to remain possibly hoping a second referendum may yet happen. Last night's election result was a great result for us remainers and we should seek to capitalize on it over the next year or so.
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I have been for some time extremely worried about the build up of debt in the Chinese financial system and it seems that Moodys is finally moving on the issue. It has downgraded China from AA3 to A1. This is still regarded as well above investment grade and well away from Junk bond status which starts at BB1. However, there a reasons to be concerned, the main one being that GDP growth is slowing to the 6-6.5% figure if you believe the official statistics well down from the traditional 10% rate. The other concern is that a lot of this debt is built up in the corporate and household sector and lot of the corporate debt may well ultimately  become government debt especially banking system debt.

                            2006 Q1         2016 Q3
Corporate             108.2%           166.2%
Government           26.3%              46.1%
Household              11.5%              43.2%
Total                       146%             255.5%

Prosperity on borrowed money can continue for a long time but can end abruptly when the music stops. This is happening as house prices have rocketed, banks have gone on an incredible lending binge (and much of those loans may turn sour) and money is leaving the country as insiders try to get money out in advance of any potential collapse or crisis. The nightmare scenario is property starts to fall in price, non performing loans in the banking sector rise (due to falling property prices and bad corporate loans) and the shadow banking system which has grown rapidly in China also comes under pressure at the same time as the commercial banking system. There is an old adage "the longer a boom the bigger the bust" I personally would avoid exposure to Chinese shares and property for the foreseeable future.

There were many reasons why I voted remain. The main one being that I saw the economic benefits of being an EU member far outweighing any costs, the UK has benefited from increased trade, immigration and inward Foreign Direct Investment and much domestic investment depends on access to the single market which covers sectors such as, consultancy, education and financial services at which the UK excels.

In my view, the referendum debate over the EU was farcical and there were too many outright lies by the Brexiteers that were not properly challenged. It is amazing that there was virtually no debate about the exit costs of Brexit in the debate. There is now talk that the Brexit bill could be as high as £100 billion. In the end the bill will be nothing like that probably in the region of £40 - £45 billion net. However, let's not lose sight of the fact that the real exit costs will be much bigger, there will be a large hit to domestic and foreign investment, a large loss of tax revenue as the economy takes a hit and some businesses decide to relocate in part or in whole to countries within the European Union. Then there will be an army of civil servants, lawyers and consultants required to do work like trade negotiations, agricultural support that were previously dealt with by EU officials.

The costs of a Hard Brexit in terms of rising inflation, loss of trade and falling real wages, rising unemployment will make the potential £100 billion Brexit exit bill look like small change. I wish that all the time, effort and money that is going to be expended on Brexit over the next 5 years could have been avoided as we already have huge problems with the NHS, Schools and Social care to deal with, which will now be put on the backburner.

Brexit is a self-inflicted wound that has divided the country and considerably diminished the status of the UK and it has opened up a can of worms with regard to Northern Ireland and Scotland. There is potential for a better outcome but this is unlikely to occur if Theresa May wins the election - as she has already ruled out the Single Market, Customs Union and jurisdiction of the European Court of Justice. Best be prepared for a disastrous hard Brexit, eventually the folly of all this will be exposed for all to see and attempts made to mitigate it but UK policy makers need to get real and leave their delusional "sunny uplands" view of Brexit.

I was recently on a panel disucssing the topic Does the Eurozone have a future?
My answer is that it does, it was not just a political project but also an economic project designed to complement the Single Market. To me it is a relatively sound currency and much better for countries like Italy which previously had the Lira, the Greeks that had a crappy drachma and the Spanish which previously had the peseta. To me the Euro has been blamed for things where it is not the cause of the problem but rather the scapegoat. Why did Greece get into so much difficulty? - well basically because it had a poor government that ran huge deficits and borrowed lots of money to fund lots of useless jobs in the public sector. The Euro has brought many benefits for business and would still have large majorities voting to keep it in the 19 member ountries that have adopted it - so it is not the failure some claim that it is. Anyhow below is a video of the discussion:

The unelected Theresa May has today decided to trigger article 50 which starts a 2 year process for the UK to leave the European Union. In my opinion it will be viewed as one of the most reckless self inflicted wounds on the UK economy ever. The referendum campaign was packed with outright lies by the Brexiteers who will now inevitably fail to deliver on their promises of more money for the health service, fantastic trade deals with the rest of the world and a new period of prosperity for the UK.

The reality is that the UK is facing a €50-€60 billion exit bill, a weak negotiating  hand as it will require unanimity from the EU 27 to get a future trade deal. Theresa May and her team of Brexiteers Bojo, Liam Fox and David Davies simply do not have the vision, understanding or ability to deal with the task of dealing with the complexity of the Brexit problem that lies ahead. The reality is that investment will be cancelled, the neogotiations will go very poorly and a hard Brexit which will be devastating for the UK economy is probably what lies ahead. The good news is that as the investment gets cancelled and firms start to put in place Brexit plans, jobs will be lost and inflation rise - the reality will dawn on many of the UK people that voted for Brexit that this was a stupid idea and the opinion polls will change markedly and it will be very difficult for the Brexiteers to get this through parliament.
The Brexiteers will learn that "Taking back control" is an illusion - the truth is the UK is part of a complicated global economy and there are rules and regulations you need to abide by in international trade. The UK economy is heavily reliant on imported foreign labour and much of our investment both domestic and foreign direct investment is dependent upon having access to the EU single market and EU labour.

I also have a message for Theresa May I will not be uniting behind this folly, I shall be resisting it wherever and whenever possible. I shall continually remind my students about how their futures have been jeopardized by the recklessness of this government and reminding them that they have an important role to play in the future of this country. That is what democracy is all about.

By the way, here is an excellent link to twelve promises made by the Brexiteers which will be a useful guidline for future reference by Luke Lythgoe LINK

In the time of Trump and Brexit one might easily conclude that globalization may have peaked and a return to  a world of lower trade interdependence and protectionism is upon us. However, although I still believe Brexit will be a disaster for the UK it is not all doom and gloom. The good news is that recently the Trade Facilitation Agreement (TFA) has now reached the 2/3 of signatories required for its implementation. The aims of the TFA is simple it is to reduce the bureaucracy, time delays and corruption associated with exporting and importing goods.

Although we should treat WTO estimates of its impact with some degree of caution the TFA could increase global trade by 2.7% per year till 2030, increase global GDP by 0.5% and reduce trade costs by an average of 14.3%.  It will be especially helpful to developing countries and to small and medium size companies that struggle with getting involved in international trade due to the bureaucracy and costs involved LINK1. I would say that it is easily the most significant boost to global trade of the last 20 years - since the Doha round which started in 2001 has yet to get anywhere near an agreement. I was recently involved with a programme about the WTO and TFA on PressTV - this is the LINK2. It may boost global trade by up to $1 trillion and help create up to 20 million jobs. In my view this kind of agreement more than justifies the annual cost of the WTO which is around 200 million Swiss Francs for 2016. We need international trade rules and means of settling trade disputes given the importance of global trade to the health of the global economy and this agreement will be a big step in boosting the global economy.

There are several companies listed on the US stock exchange that make me marvel at their sky high valuations. They make no sense to me as an economist but that does not mean that investors are completely crazy valuing them the way that they do. For example, I have for a couple of years been following Mobileye - to me this company is an interesting sector namely driverless car technology but it seems to me to have been massively overvalued and I am not too convinced of the value of their product as I think I can see fine with my eyeballs what is on the road. The other day it was trading at around $46 per share based on profits of $0.46 per share making it 100 times earnings with a market capitalization of around $13 billion dollars. Then on Monday everyone was stunned by a bid from Intel for the company at $63.56 per share LINK so the share has since shot up to $61 and its market capitalization is now $17.3 billion a gain of $4 billion is just a day so it now trades as 133 times earnings. The trouble is Intel is paying 42 times next years sales (i.e. revenue) LINK2. I doubt that it is worth that amount and Intel has a bad track record on its acquisitions. There is, however, a lesson about the risk of shorting what seems to be a highly overvalued stoc - the risk that some bidder will come in with a massive bid - the shorts on mobileye have been taken to the cleaners on this one. I don't blame the owners of mobileye for cashing out on this one I would do the same in their boots.