Blame it all on Brexit?…….Not If You Understand Socionomics 101!

Its two weeks to the day that the Brits and the Wider-World were stunned by the UK referendum result to leave the EU. Why?

The Global “experts,” so relied on by the “stay camp” had been queuing-up to justify their gloomy forecasts, should the UK leave, by pointing selectively at economic data, particularly at economic growth and the £GBP. Why?

Furthermore, during this post-brexit two week period there has been a rafter of economic data released, as there is on most trading days, from both the UK and from the same wider-world, with most of the disappointing data being blamed on Brexit. Why?

I’ll be brief in my observations and answers, steering you to read or to perhaps re-read the blog-postings that I made on the Brexit debate over the four month period between the referendum announcement and the event itself.

Why Stunned?

Because the opinion polls predicted that the remain camp would win and a human trait is that “subconsciously” humans like to herd, as it feels more comfortable. At the start of the campaign the pollsters had the remainers’ at 55% and although this changed to be “neck and neck” and then to favour the leave camp with just one-week to go, it swung back to favour the remainers.’

The February “Brexit, Socionomically Thinking,” post made the observation that mood governs events and that the best barometer of a nation’s collective social mood is its domestic stock-index, going on to utilise the FTSE All-Share Index to expand on the 1970s timing of the EU entry for the UK and for the 1975 referendum, observing that a period of inclusionism is a trait of a rising stock index/ positive collective social mood, whereas a falling stock-index / falling social mood includes a tendency for polarisation/exclusionism.

The article observed that the All-share had been trending lower since April 2015.

Why the “Experts” consistently get it wrong?

Whilst the human race is perfectly logical when it comes to non-financial matters, think BOGOF or more lately the rise of the discounters, they are not when it comes to financial decision-making, as evident by a rafter of examples such as the higher a share price or house price goes, the more people buy and vice-versa. The “experts” in the main are exactly the same, including another human trait of “extrapolating” the immediate past into the future, another form of herding. There are reasons for this which a socionomist can explain and I touch on this frequently within my commentaries.

The early June posting, “Economic Benefits, Fact OR Fiction?,” demonstrated the fact that UK GDP and the British pound had been falling throughout the 40-odd years that the UK was a member of the EU, totally exposing the expert claims that both variables had benefitted due to EU membership as false.

8 June 2016

Most of the recent disappointing data is being blamed on Brexit. Why?

Because it’s a convenient opportunity for the “financial experts” to blame their past years of consistently erroneous forecasts on the past few months of uncertainty, none more so than UK Chancellor George Osborne who abandoned his target to restore government finances to a surplus by 2020, whilst failing to remind that the Government borrowed £74.9bn in the 2015/2016 fiscal year and are on course to exceed this for 2016/2017, despite six-years of forecasting substantial reductions OR of Bank of England Governor Carney’s consistently hopeless CPI and GDP guestimates, despite the 1000+ economists pouring over the detail!

The latest “blame it on brexit” news was the dire UK consumer confidence numbers released today and the business sentiment readings announced earlier this week. Both sets of reports suggest a heavy influence on the post-vote uncertainty, yet fail to mention that both variables have actually been falling since April 2015, a full 14-months, co-incidentally, since the All-Share index peaked as can be seen below:

8 July 2016

Remember the aforementioned observation that mood governs events and that the best barometer of a nation’s collective social mood is its domestic stock-index? Hence there should be no surprise in respect of these readings.

Socionomics can assist with many other areas  than politics and markets and if I can be of assistance then just ask. There is no need to be stunned or to mis-place blame.


 

 

 

 

 

 

 

 

 

 

 

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  1. […] « Blame it all on Brexit?…….Not If You Understand Socionomics 101! […]

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