Brexit and Donald Trump
Just a month before the EU referendum, Chancellor
George Osborne commented Brexit would lead to a “Do-it-yourself recession. Remain campaigners “Stronger In” argument is
focus on economy. Vote Leave is zooming
into the immigration issues. According
to polls conducted by ICM, ComRes and Ipsos MORI, the top issues in people’s
mind are immigration and economy. So the
Remain camp and Vote Leave camp have to leverage on these big hitter
issues. The Remain camp got the US
President Obama to comment “Brexit would put UK at the back of the queue for
trade talks”. It is a fear factor play
and it probably works on some of the middle class voters. The fear of some global firms moving their
Europe headquarters away from Britain (to Dublin perhaps). Some business owners also do not like the uncertainty
in tariffs and the trouble of getting visas for overseas EU workers. Looking at hotels and restaurants in London,
one could sense the importance of EU workers.
The Vote Leave camp focuses on immigration issues and getting the
management control back from the EU to the UK government. United States, China, Japan or Australia is
not part of the EUs and they are not exactly missing out. UK is physically close to EU but that still
does not mean UK has to be part of it. The fact that no one can imagine UK to give up the
Sterling and adopt Euro means it is acceptable to keep a distance. Vote Leave does not mean UK does not trade or
work with EU. It just means putting a
bit more distance in between. DIY
Recession may be worrying but staying in EU does not mean UK never gets into a
recession. Japan has been in recession
for years and recession seems no more annoying than the bad weather in
winter. There are economic fixes for
economic problems. The unknown is true
and is part of the future. Would Brexit
be a transition similar to Sir Ferguson passing Manchester United to David
Moyes? Or more like a Leicester City 5,000
to 1 Premier League journey? It is up to
the people.
Looking at the GBP EUR exchange rate, there seems
to be no panic yet. The Sterling is at EUR
1.2961 to GBP 1 as of 23 May, 2016, stronger than this year low in April at
1.236. FTSE 100 is also doing ok at 6146
level as of 22 May, 2016, much higher than the 5537 low in February. Perhaps the market is pricing in Remain camp
to win as of now.
While the Remain camp has Obama, Donald Trump said
a Brexit would make sense for Britons especially in the light of the craziness
of the migration chaos. Trump’s election
journey has been as unbelievable as Leicester City’s road to champion. His strongest card is immigration and his
comments on building a great wall and a deportation force were jaw
dropping. Trump has now only got Hilary
Clinton between him and the White House.
He is probably better at hosting reality TV than Hilary but Hilary has
certainly spent more time as a politician than Trump. This is Harry Potter against Lord Voldemort
in terms of experience. The world is
changing and voters are different. It is
more important to understand what voters want than what you have on the shelf.
Amazon is conquering the retail market globally
through understanding its customers better than most of his competitors. Its share price is at USD 702.8 as of 22 May,
2016. 5 years ago, it was below USD
200. Amazon market capitalization is USD
331.6 billion (GBP 229 billion) versus Wal-Mart at USD 219.3 billion (GBP 151
billion). Tesco market capitalization is
GBP 13.3 billion. Amazon is branching
out to all lines of business from its e-Commerce nucleus. Good at dealing with big data gives them a
world leading position in cloud computing.
Knowing the customer tastes allow them to venture into private-label
goods in food and household products, offering videos and other digital
entertainment, clothing will come.
Shipping to so many customers globally means building up their own
delivery services and logistics operation.
As the buy orders keep coming into Amazon.com, it looks like the buy
orders for its shares also continue. If
EU can run like Amazon, voters would probably have an easier decision on to
stay or to go.
