Jim - don’t forget that Johnson’s role has changed, as he wants to be PM. So he has to appease everybody and sound like a politician (vague and incoherent).
Steve
This was largely an anti immigration vote. It’s only a vote against ‘crony capitalism’ in that people were mad that capitalists were hiring a lot of immigrants. I would be curious what point in time in history capitalism couldn’t be termed ‘crony capitalism’ when closely examined. It’s the nature of the beast to maximize leverage, relationships and arbitrage when it presents itself.
Thanks Cary. I think this is very perceptive: extremely so.
The bottom line, IMHO, is we have opinions as to when we should “cooperate.” Cooperate in the sense of the “Prisoner’s Dilemma.”
We all have a sense that is is good to “cooperate” together to reduce our impact on the environment as long as no one “cheats”–or defects to use the terminology of the prisoner’s dilemma.
On the other hand two corporations “cooperating” to keep prices high (this is a clear prisoner’s dilemma taught in many economics text books) is bad.
And in order to get cooperation without too many defectors we often require a organization (e.g., government) to punish those who do not cooperate. For a fun read, look at some of the academic discussions about how the mafia can really do some good because they are so effective at enforcing cooperation–often without even having to actually kill anyone (there are whole chapters on “threats” in business text books). Maybe they have a point: I’m pretty sure that the mafia could get me to do better with regard to recycling.
So I would argue “crony capitalism” is just a set of opinions about what is appropriate cooperation between government and corporations and also about the systematic lack of enforcement of regulations by the government toward some groups but not others. But we all may disagree on what is appropriate cooperation and whether our own special group should be exempt from the regulations.
Not to get into the weeds too much, Johnson may be about something other that immigration if I read the article correctly.
Edit: Steve, just saw your post. Good point! So what are we actually going to get?
Capitalism:
In my opinion there is not a single country in the world that is run 100% by capitalism, even not the US.
Its a mixture, we call it “Soziale Marktwirtschaft” (social market economy) in Germany.
In the US and Singapur there is more “market” and less “social” and regulartory interventions by the state, and France
has more “social” interventions as Germany or as the US, at the end of the day there is no 100%
capitalism anywhere in the world.
The question the western world has to answer, how to put less pressure on the middle class, otherwise
we are in good shape in terms of what we have done with capitalism.
Brexit:
Brexit has happened because the old guys wanted to have back “Great Britain”, they think they
can get it back by exiting the EU (which is idiotic). Populism simply made its way. 75% of young people wanted to stay.
UK is going to be decimated, politically and economically. Only chance left for the UK is the US and they
seem to be less interested in international afairs and concentrate more to asia then europe.
I am not saying EU is perfect, its state is terrible and we have to change it, yes.
So for the EU this is a great wakeup call.
But the idea, that UK is better of without the EU is plain wrong, they will loose 1% growth
every year within the next 10 Years.
What will happen, that real estate in the big cities will surge in Germany.
Money is looking for growth and the overheated real estate market
in the UK will not provide it, so a good play will be real estate stocks
in Germany, the lower the market cap the better, because there
will be a lot of buy outs.
Otherwise Germany will be hurt, china is much bigger for Germany,
but net exports of Germany to the UK are 50 billion, they are now
getting more expensive and at risk…
For portfolio protections, look at the http://www.finanzen.net/konjunktur/ism-einkaufsmanagerindex
ISM, if it turns below 50, markets are going down, summer is coming, everybody will remember
last august, its “risk of”.
As I said, I protect my micro cap portfolio with TLT (save haven play) and GBTC (anti china devaluation play, anti inflation play), so far that has worked well…
Regards
Andreas
Are they really going to leave? There could be some surprises there. The devil is in the details.
Lifted this from a friend’s Facebook page. It’s an interesting take on what can happens next in the UK. It’s not over until the fat lady sings.
EDIT: The original post was on Reddit.
Marc says the US might get worse on free trade. I think he might be right without even guessing who will be elected.
This article says we may not be doing too good now. Have we violated our trade agreements with Canada to the tune of $15 billion? TransCanada formally seeks NAFTA damages in Keystone XL rejection
Andreas,
Could you please explain how Bitcoin Investment Trust GBTC is valued, and why one should invest in it.
Thanks
Jim - NAFTA is a lawyer’s paradise. Foreign companies can sue a government with no fear of retribution on things that you would think the government would have a right to exercise its control over… things like environmental, native aboriginal issues, etc. An example is Frack’ing in Quebec.
And governments will put up a wall for any reason they can find. An example was Mad Cow disease. Canada lost a huge amount of export business due to one positive test. Fact is that the Canadian (cow) system is exactly the same as in the US, and feed comes from the same places. The only difference may have been in reporting (or lack of reporting) cases 
Steve
sure George:
- ETF Structure
GBTC is like a gold etf that buys gold.
They buy bitcoins and stack it to big volts (on different locations all over the world) that have data centers that are not connected to
the internet, so security levels seem to be high.
the etf represents the bitcoin price, but in reality traders pay more then the underlying bitcoins, the premium is pretty high (10-40%).
Its traded on the OTC, so everybody needs to know if this etf structure can be trusted. Since I only bet 5% (now 10%) of my
port I said, I take the risk.
- Bitcoin
Acutally I tired to understand the bitcoin stuff, i studied for 6 Weeks and I still do not have the feeling that I got it.
For me it is a conviction trade of somebodys else conviction. I saw all bitcoin related videos on real vision and
I said to my self, o.k. lets try 5% as a hedge to inflation and instead of gold.
Bitcoin could go bust alltogehter, yes.
But I looked at the interests at stake. Huge bets of bitcoin producers (china!!!) that are so much invested,
that they will find a way to figure it out (a bit like the internet in 1996, that time nobody understood amazon
as well…). And Hedgefonds that invested all their money in bitcoin and founders of that hedgefunds that invest
all their private money into bitcoins. They made a very intelligent impression to me, so this was a plus too 
I like it much better then gold, because you can pay with it and the supply will limit more and more by
the nature of the algorythm on how it is produced.
But the risk is also higher then gold because nobody knows how it develops.
At the end of the day I like the convexity of the trade. It could go to 0, yes.
But it could also be the trade of your lifetime going up ballistic (like
internet stocks from 1996 - 2000).
So I decided to buy 5% of my port and hold for the next 25 years.
So far it worked, but I might have been sheer luck.
What can be seen is, that in china (where a lot of gold bugs live)
the puplic fears the devaluation of the Juan and they seem
to invest in bitcoins.
Also the brexit showed that bitcoins seem to develop more and more
into a safety area.
Centrals banks need inflation and they will get it at some time.
I just do not like gold, so bitcoins is my alternative…
As I said, do not invest more then 1-5% of you port and
look at it like an option trade with a huge convexity and
a very long time frame (at least 10 Years).
I made a pitch on a private investment group.
They crucified me like somebody telling
amazon is going to be huge in 1996.
I am not sure, they or I am going to be right.
But risk reward seems to be good to me…
Regards
Andreas
Andreas,
Thank you for this explanation.
Very few seem to understand the blockchain powering bitcoin. But the gains of bitcoin are undeniable. The fact that the Chinese like bitcoin does not surprise me. Apparently they use it to move money out of China in contravention of foreign currency exchange regulations.
Bitcoin Investment Trust, which is quoted on the over-the-counter market, is the first and only means to buy and sell bitcoin with a standard brokerage account in the U.S. This is structured as an open-ended trust, and the price of the trust is meant to represent 1/10 of bitcoin’s price, but there is a high premium over the bitcoin price.
I just don’t think there is currently more “crony capitalism” between government and capitalists today than there was in the past. Certainly not when JP Morgan was personally bailing out the United States government. Or when Alfred Sloan was determining America’s foreign policy.
Cary,
So, pretty bad before at least from your examples? What do you think about JP Morgan Chase and the recent great recession?
Whether better worse or the same regarding the severity of the problem, was it a different type of crony capitalism? I would be interested in your thoughts.
Here is something we can probable agree upon. No matter what scandal or problem might bother you the most, no one is going to go to jail or even lose their job over it. I will agree that may not be a change. But no matter what you have in mind as your worst scandal only about 50% of the people will think it is even worth discussing. Nothing to see here as long as they are from my party and advocating for my special interests. Is that a change?
Do we agree less about what the law says? Do me care less as individuals and a nation about what the law says? But it isn’t just fraud in government.
I have seen fraud in medicine. There has to be a huge amount of money involved before the AG cares: you will have to just trust me on this. I won’t say whether I have seen enough to get the AG interested. But if you, at some point, become aware of a few old people being defrauded–you should just forget about it. You may have a civil malpractice claim but it should not be a small claim if you want to interest an attorney. Wish I could tell you more.
If you as a non-physician were aware of Medicare fraud who would you report it to? Would you call your local police department? I think–more than likely–you would submit your complaint online and never hear back. Never talk to a real person.
My corporate credit card had a charge from UBER in China in the last few months. My personal credit card had to be cancelled twice in 2 months-- just got the second new one. My daughters debit card got stolen this weekend–someone tried to use it at a restaurant after she cancelled it.
I would like to think something has changed. But if you say I just used to be naive, I wouldn’t fight you on that.
New or not, I’m getting tired of it and it will be a consideration when I vote.
Thanks.
-Jim
I don’t think you’re naive, and certainly we face many challenges currently. It’s important that we all have our eyes wide open. However, I think it’s also important that we don’t whitewash the past with nostalgia, and realize the progress we’ve made. It’s quite stunning to me that so many older Brits want to revisit their 1970s economy. I seem to remember riots, outrageous unemployment rates and half the country the dole.
EU has many problems, but not nearly as much as the tribalism and nationalism of sovereign nations that brought Europe Verdun, Borodino and Stalingrad. Perhaps the EU is a victim of it’s own success, in that people don’t even take this into consideration anymore as a plausible scenario when they were happening quite frequently and we’re not many generations removed. Aside from the unspeakable human tragedy, there were catastrophic economic consequences as well. WWI was basically a gigantic vacuum hose stretching across the Atlantic sucking wealth out of Europe and into America, who was banking and financing the war debt on both sides for most if it. Nor the fact that American worker enjoyed a gigantic advantage being one of the few industrialized, resource rich countries in the world that wasn’t rebuilding themselves out of ruble or shackled behind totalitarian or communist regimes for most of the 20th Century. American workers reaped many inherent advantages of “globalism”, but many of those were never going to be permament.
Cary,
Thank you for reminding me! I have made the same or similar arguement myself. It is hard to make the arguement that western society is in a general state of decline when you look at WWII. And you mention WWI. Hard to make any comparison to today if you think of trench warfare, often dying of the flu or infection from your wounds (no penicillin). On a scale that I do not think I can imagine.
Edit: Cary, I read your post again. You make a very strong arguement for corruption in the United States. I almost want to disagree. But within this thread, I could not possibly make a stronger arguement for the idea that corruption exists (without changing my name). I do not think I will get caught up in the details. End of edit.
You make a great point. So I’m left thinking what, if anything, is different. We all probably have our own ideas on this. But something has changed hasn’t it? At least a little.
People did vote for BREXIT.
Regards,
Jim
When I started this thread, it was around the question of what new opportunities exist now because of Brexit.
Some have commented on that. I was really trying to figure out if the US market, which is mostly what I am invested in, will be a net winner/loser in the coming couple of years. I just read this from a WSJ article. I think that the US market will be a net winner (albeit, not by much):
"But the news isn’t all bad. The U.S. economy, which has weathered repeated storms from Europe’s debt crises over the past four years, remains relatively healthy. Investors clamoring for the safety of U.S. government debt have pushed down yields, which move in the opposite direction as prices. That holds down interest rates and makes the Fed less likely to raise short-term interest rates in coming months. And that makes mortgages cheaper for American home buyers and homeowners looking to refinance. Likewise, dwindling prospects for global growth and the stronger dollar push energy prices down, helping consumers save more at the pump. Oil prices fell 5% Friday. The powerful U.S. dollar also means American consumers can buy more British and European goods with their dollars and travel overseas at a lower cost. “I think it is unlikely the U.S. consumer—which is driving this recovery—will be thrown off by Brexit in the short term,” said Megan Greene, chief economist for financial services firm Manulife. “If there is contagion to the rest of Europe, however, then a U.S. recession becomes more likely,” she said.
The real question is if other EU countries join the UK. I could see that starting to affect everyone. But if it is just the UK, I think this will fade just like the Greek crisis has faded. So the coming months will be critical to see if others join in. Time will tell.
David -
“This is my story and I’m sticking to it” says Janet Yellen, despite the Federal Reserves own labor market index tells a different story.
All -
The UK decision may very well be based on the UK riots in 2011. U.K.'s broken social contract blamed for riots | CBC News
What I don’t understand is why no one seems to be putting two and two together. The Muslim immigration problem is directly related to Western countries meddling in the Middle East. In particular, taking out Saddam Hussein and handcuffing Bashar al-Assad, two “bad guys”, has made the ISIS initiative viable. Syria wasn’t so much about war crimes as isolating Russia, isolating Russia is something that the EU has been a participant in for quite some time.
Steve
I agree. I think that was a meaningful part of the Brexit vote and is boosting Trump. The realist is that there are different sets of living standards across the globe and in the long-term globalization is a push toward equalization. If the push operates to move lesser standards upward, globalization is a winner. But that’s not the way it has been going. It’s been a race to the bottom – and the folks being shoved down are pushing back, understandably so. Economic writers suggesting globalization foes are hurting themselves are missing the boat. They’ve been put into the nothing left to lose position – at least that’s how they see it and if they are objectively wrong, globalization supporters need to show them through action, not lectures.
We also know the immigration angle. Dollars and cents is part of it. So is fear. That’s a hard one to deal with.
Another angle, one angle that fascinates me, is rhetoric about hyper-regulation within the EU. Can anybody – especially our European members – speak to that?
I definitely have strong views on regulation in the U.S. There are many areas in which having it is a good thing. But having formerly worked in the public sector and interacting with it even now, I’d say Donald Trump, who uses the phrase “waste, fraud and abuse” is way to soft on them. I recently read “The Art of the Deal.” In one chapter, he discusses his experience with NYC rent regulation. I was a staff attorney in one of those agencies a few years before the events Trump described. His critiques were 100% accurate. And just a few months ago, I had to put my legal hat back on: My wife got into a snit with the NYC Landmarks Preservation Commission. Turns out they’re even worse than the old rent regulators. I filed a case in NY Supreme Court not only doing the usual arbitrary-and-capricioua challenge but also asking that the NYC Landmark Law be declared “unconstitutional as administered.” My papers detail a regulatory clusterfu** way beyond anything I’d seen in my rent-regulation days. (Most of these “Article 78” cases get quickly smacked down in the courts – but here, the City Attorney’s office is sweating to come up with an answer. I already gave them two adjournments, and that’s almost unheard of at this stage – just to get an initial answer.)
If the E.U. is worse than the U.S., which some say it is, then maybe the E.U. needs to do some soul searching.
All:
There are WAY too many issues in this thread. Picking a couple:
BrExit is right now creating uncertainty, which in itself, is bad economically. Longer term it will be corrosive for all involved. Something to consider: In rough numbers from 950-1950 (actually much longer) Europe was dogged by war, either preparing, fighting, or recovering from. The EU is not just an economic compact but a political and existential one as well. It, together with the UN and NATO have been Europe's and mankind's best hope for peace and stability in that volatile region. It's worked tolerably well for the last half-century or so. The vast bulk of the folks that voted for BrExit did not fight WWII. The horror is not part of their collective memories.
With respect to the price of prescription drugs in the US: Healthcare is by far the most regulated industry in the US. The idea that free markets exist for products and services in the industry is ludicrous, as is the idea that the pricing of those products and services represents a fair equilibrium.
Bill
So much fuss over Brexit—yet hardly anything has happened. Who knows if Article 50 will even be triggered? If problems follow Brexit will be cited as the cause but it will only be a proximate excuse.
Capitalism is on positive good to be sure but one would have to be willfully daft to not recognize an oil cartel thwarting the development of other energy sources. From there it does not take much of a leap in logic to also recognize that the same is likely going on in medicine and computers. The definition of diabetes is too much sugar in the blood yet it has taken the medical establishment forever to suggest lowering sugar intake as a treatment instead defaulting to prescribing pills for life as the usual course. Windows and MS Office are coerced on people even though there are free alternatives. Intel’s success is based partly on its past hamstringing of AMD. Let’s not even get into the abuse of patents. Abuse of rules and network effects have as much to do with corporate success as innovation.