The more time a government spends attacking itself, the less time and energy the parasite has to attack its host. Its host, of course, is the private economy. With the United Kingdom’s High Court (itself part of the government) rejecting the other part of the government’s argument that Brexit does not need a parliamentary vote to pass, one branch of the UK government is now pitted against another. This is almost always a good thing for business.
Don’t be fooled into thinking this is some principled stance by Wise Justices in their Impartial Sagacious Interpretation of the Sacred Letter of the Law. That’s all nonsense. These laws are all fake artificial constructions anyway and it’s all political. They are interpreted however one wants to interpret them. I would bet the farm on margin that the people on that high court who ruled against the unilateral triggering of Article 50 all voted against Brexit. I am as close to 100% certain on that as anyone can be in a universe governed by the Heisenberg Uncertainty Principle.
Here’s the meat of the text of the ruling:
‘it has been established for hundreds of years that the Crown – i.e. the Government of the day – cannot by exercise of prerogative powers override legislation enacted by Parliament,’ and that ‘the Court expressly accepts the principal arguments of the claimants…[that]…the Government does not have power under the Crown’s prerogative to [trigger Article 50]’.
Well isn’t that just sacred. A principled strict constructionist interpretation of some holy tradition or other involving something about a head ornament. I’m reminded of a line from The King’s Speech, in which Geoffrey Rush’s character Lionel Logue sacrilegiously sits in the king’s chair, trying to rattle Colin Firth’s King George. “I don’t care how many royal a-holes have sat in this chair!”
By the court’s logic it was also established for hundreds of years that the United States of America and most of the planet in fact also belongs to the Crown – i.e. the Government of the day – so everyone should just give up their sovereignty and submit to the House of Commons then.
Nevermind that the Brexit referendum itself was triggered by legislation enacted by Parliament, an equally artificial and arbitrary argument that could just as plausibly be accepted here, if the ruling judges ruling had voted for Brexit, which they almost certainly did not.
I said this would happen even before the vote:
The powers that be will do everything possible to keep [the EU] together until the money runs out, and they won’t let a silly thing like a referendum get in their way. No, there probably won’t be any systemic voter fraud, but even if Britons voted to leave, Parliament would still have to approve the Brexit…The point is, the referendum is a farce, just like last year’s Greek referendum to accept or reject the Eurozone bailout package was a farce. The Greeks rejected the bailout and it was forced down their throats anyway.
So what happens now? It looks like the Supreme Court will hear the case around the first week of December. The youngest member of the Supreme Court is 60 years old, which may bode well for the Brexit side. 65 and older voted for Brexit by a 60-40 margin, but then again that’s mostly private people. When you’re dealing with 65 and older government people, it’s a different story. The Supreme Court may side with Theresa May on this issue just for the sake of holding off a constitutional crisis though. In either case, it bodes well for UK stocks because this whole thing gives the government some nice nonsense to focus on instead of passing more taxes and regulations.
There are going to be big headlines and emotional speeches by big wannabe Prime Ministers looking to cement their legacies as “passionate leaders” going on and on about democracy and the sacredness of referenda or the people’s sovereignty and whatever other catchphrases. Some others will go on and on about the sovereignty of parliament as the true Royal representatives of etc. and to go against that would be destroying millions of years of holy etc. going all the way back to just after the Cambrian Extinction. It’ll be a great sideshow.
In the meantime, business will keep going on as usual with no focus on further taxing anyone or anything until the sacred issue of democracy and the referendum is resolved. This, together with the fact that the UK money supply is expanding rapidly again along with the dollar supply and we have a good recipe for a rising UK market, especially with the whole Brexit limbo being a firm wall of worry that will keep sentiment bearish and muted.
The worst that could happen is that the Supreme Court will rule that a Parliamentary vote must take place to trigger Article 50, and the vote not passing. That would really anger the Brexit side, and it would necessitate new elections which would essentially be Brexit Referendum #2. While all this is happening business will keep on as usual, so my advice is don’t get caught up in it and just keep living your lives.
After today’s US election, it should be safe to add to UK stock positions with a focus on companies that have been trending down lately. These include Rank Group, William Hill, Ladbrokes Coral Group and Sportech. 888 as usual has been a trooper and has not been affected by any of this, and remains a hold but no need to add. There could be a big down move in everything if Trump gets elected today which would be even more of a buying opportunity because the fall will be quickly reversed.
As an aside, as a registered Florida voter who does not vote, I can proudly say that my non vote will really count. Maybe it’ll be an exact tie in Florida, in which case the election should, by American tradition of hundreds of years or something, come down to a Game of Thrones style trial by combat mud wrestling match between Trump and Clinton. I give the edge to Clinton since Donna Brazile will probably give her Trump’s wrestling moves in advance, and then blame it on Russia.