Brexit, Socionomically Thinking

Let the confusion begin, at least that appears to be the consensus following “Dave’s” EU/Brexit summit result of last week, opening the way for an in/out EU referendum for the Brits to be held on the 23rd June 2016. EU President Donald Tusk and the British Prime Minister, David Cameron, agreed that the terms of the summit achieved unanimous support” from the EU 28, whilst giving the UK “special status” within the EU, allegedly enjoying the benefits of membership whilst excluding it from ever closer union.

With four months to go, it’s already been an interesting few days, with the pro-EU camp, led by Cameron and the majority of his cabinet immediately using “scare tactics” with big business warning that London’s financial importance will be harmed, some military heads saying it will put the UK at a higher risk of terrorist activity, whilst the majority of economists, surveyed by Bloomberg, saying that an exit would triple the chance of a UK recession.

If that is not enough for a contrarian to vote “leave” the early “mutiny” by Justice Minister Gove and the London Mayor, Boris, allegedly adds some credibility to the activists, Nigel Farage and George Galloway, ironically two of very few politicians who actually speak the truth and wear their hearts on their sleeves, whether you agree with their policies or not.

Of course, it won’t matter a jot what these folk think, or me come to that, it will be decided by the UK electorate, who according to the latest poll are 55% in favour of continued EU membership but as we know from last year’s UK general election and the Scotland independence vote the opinion polls can be way out.

So where to look for guidance?

As with everything within these commentaries, we look to the charts, as charts never lie! They may not be specifically accurate when it comes to politics, but they do a pretty good job on analysing the collective social mood, and to a student of Socionomics, mood governs events, so charts are a very useful tool, as can be seen from a study of the UK All-Share Index:

25 February 16 blog

A rising stock-market indicates a positive collective social move, which includes a propensity for “inclusionism,” we and us, so the 1st January 1973 timing by the Conservative party PM, Ted Heath, of taking the UK into the EU was spot-on, at the peak of positive social mood, see the blue vertical line.

Fast-forward two years and there are similarities between the current divisions within the UK conservative party over Europe, which is central to Cameron’s push for an in/out referendum, to the last one held, when the then ruling UK party was also split over Europe in the run-up to the June 1975 referendum, albeit that it was the ruling Labour party, led by PM Harold Wilson who had “renegotiated” terms of Britain’s membership of the ‘Common Market.’ The collective social mood was turning positive, after the devastating 1972-74 bear market, which proved to be sufficient for a yes vote by the referendum date, see the red vertical line.

Once again, it is the collective social mood that will decide this referendum and the stock-index will be the best “barometer” of the collective social mood in June. A glance at the All-Share’s recent performance does not auger well for the “yes camp” but there are 4-months to go.

25 February 16 blog 2

There is, of course, one major difference between the 1970s and now, the former was a period of “stagflation,” anaemic economic growth and rapidly rising CPI, whereas today we reside in a period again with anaemic economic growth, but one leaning more to “de-flation.” It will be an interesting contest.

 

 

 

 

 

 

 

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7 responses to this post.

  1. […] week’s commentary, “Brexit, Socionomically Thinking,” observed that collective social mood will decide the referendum, with the UK’s FTA-All Share […]

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  2. […] surrounding the referendum. For ourselves, we remind of our February posting called, “Brexit, Socionomically Thinking,” which concluded that mood governs events and that the stock-index, in the UK’s case the FTSE […]

    Reply

  3. […] is hard to believe that it’s over three months since penning the article, “Brexit, Socionomically Thinking,” which observed the fact that as mood governs events a chart of the UK’s stock-market is a […]

    Reply

  4. […] February “Brexit, Socionomically Thinking,” post made the observation that mood governs events and that the best barometer of a nation’s […]

    Reply

  5. […] week’s commentary, “Brexit, Socionomically Thinking,” observed that collective social mood will decide the referendum, with the UK’s FTA-All Share […]

    Reply

  6. […] may wish to re-read the February/March 2016 overviews, “Brexit, Socionomically Thinking,” and “Trump Card” which were both pretty good guides to the outcome of those two events. A […]

    Reply

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