Posts
UK
In "Full Panic Mode", Rains Brimstone, Bribes On Scotland
As "Yes" To Independence Poll Crosses 50%
7
September, 2014
All
pundits who over the past few months have been saying the possibility
of Scottish independence as a result of the September 18 ballot, is
at best a pipe dream got a rude wake up call overnight, when Scottish
YouGov poll for the Sunday Times put the "Yes" (for
independence campaign) on top for the first time since polling began,
with No below the majority cutoff line for the first time, at 49,
when undecided voters are excluded, and even when including
undecideds "Yes" is still ahead by two points at 47-45. As
the
Spectator reports,
"in the space of four weeks, "No" has blown a 22-point
lead."
According
to
Bloomberg,
"the shift to an outright lead for supporters of independence
may further roil financial markets after the pound weakened last week
when the pro-U.K side’s support narrowed to six percentage points."
Granted, today's news may be GBP-negative, but Bloomberg seems to
still operate under Old Normal assumptions whereby any news, bad or
gad, is anything but great for stocks. Expect the S&P to hit new
all time highs on this latest development which will be promptly
"priced in" and spun as pent-up reunification.
The
usual commentariat, which until recently was swearing the Yes vote
has zero chance, is stunned :
“For
a positive message to catch up so much in a month is totally
unprecedented,” said Matt Qvortrup, a senior researcher at
Cranfield University in England and author of “Referendums and
Ethnic Conflict.” “This is pretty revolutionary stuff in
referendum terms. We’re ringside to history.” The Sept. 18
ballot on Scottish independence is dominating the U.K. after
door-to-door campaigning on both sides intensified last week and as
traders and investors no longer rule out a dramatic victory for
nationalist leader Alex Salmond."
Scottish poll reflects world-wide disillusion with political leaders and old establishments leaving openings for libertarians and far left.
Make
no mistake, the UK government
will now be on full panic mode. This
eclipses everything: the country is 12 days away from dissolution.
We’re seeing an almost perfect rerun of what happened in Quebec in
October 1995 when the ‘yes’ pulled into a lead at the last
minute. Then, Canadians (who had ignored the debate until then)
suddenly took notice, realising that their country was falling apart.
Seven days before the poll, a massive unity rally in Montreal was
organised (details here) by a fisheries minister acting on his own
initiative. God knows such initiatives are needed now.
UK
politicians, naturally, were not happy, starting with the head of the
UK Treasury, Chancellor of the Exchequer George Osborne, for whom any
change from the status quo is very much unwelcome:
Chancellor
of the Exchequer George Osborne said a program for increased
devolution to Scotland if it votes No, offering Edinburgh more
control over taxes, public spending and social policy, will be
announced in the “next few days” as the London government
responds to the shift in the polls.
“It’s
clear that Scotland wants more control over the decisions that affect
Scotland,” Osborne said in a televised BBC interview. “The
timetable for delivering that will be put into effect the moment
there is a ‘no’ vote in the referendum. Then Scotland will have
the best of both worlds.
They will both avoid the risks of separation but have more control
over their own destiny, which is where I think many Scots want to
be.”
Osborne
also reiterated his opposition, which is shared by all major parties
in Westminster, to currency union with an independent Scotland. “No
ifs, no buts, we will not share the pound if Scotland splits from the
rest of the U.K.,”
he said.
His
predecessor quickly chimed in: enter Alistair Darling.
‘The
polls may conflict, but the message I take from them is clear: If you
want Scotland to remain part of the UK family you have to vote for it
on 18 September. Separation is forever. These polls can and must now
serve as a wake-up call to anyone who thought the referendum result
was a foregone conclusion. It never was. It will go down to the
wire. Now is the time to speak up and speak out.
‘We
are hitting the streets, knocking on the doors, making the calls in
unprecedented numbers and we are hearing the people of Scotland
respond positively to our vision of Scotland securing the best of
both worlds. That means more powers for Scotland without taking on
all the risks of separation.
‘We
relish this battle. It is not the Battle of Britain – it is the
battle for Scotland, for Scotland’s children and grandchildren and
the generations to come. This is a battle we will win.’
It
only got more panicky from there:
With
campaigning in its final days, the opposition Labour Party is trying
to keep its supporters onside in a traditional heartland and vote
against independence. Former Prime Minister Gordon Brown, now a
Labour legislator, will tour the country making the case for the
union.
“I
want to share our resources with the rest of the United Kingdom, and
that will mean better pensions, better health care, more jobs and
better security,” Brown, a Scot, said in an interview with Sky
News. “Whatever government is in power temporarily, you’ve got to
look at the long term picture. You’ve got to look 50 years ahead,
100 years ahead. This is an irreversible decision.”
But
perhaps realizing that dazzling them with glass beads and cheap
promises won't work, UK's Prime Minister went "all the way"
and pulled a nuclear Hank Paulson, threatening Scotland with outright
death and destruction if it votes to secede. From
Bloomberg:
Scotland
will be more vulnerable to terrorist attacks in a “very dangerous
and insecure world” if it votes for independence on Sept. 18, U.K.
Prime Minister David Cameron said.
Being
part of a union gives Scots the protective benefits of being part of
a larger country, Cameron told reporters at the end of the North
Atlantic Treaty Organization’s summit in Newport, Wales, yesterday.
“With
terrorist threats and other threats, isn’t it better to be part of
a United Kingdom that has a top-five defense budget, some of the best
intelligence and security services anywhere in the world, that is
part of every single alliance that really matters in the world in
terms of NATO, the G-8, the G-20, the European Union, a member of the
security council of the UN?”
Cameron said. “All those
networks and abilities to work with allies to keep us safe. Isn’t
it better to have those things than separate yourself from them?”
Because
how else can Scotland protect itself than by aligning with the nation
that, together with the US, provided
weapons to these "terrorists" in
the first place.
And
while everyone else demanded a continuation of the status quo, and is
"stunned" at the Scottish people for not appreciating the
"clear benefits" that a union provides, one person who was
absolutely delighted was Scottish National Party leader Alex Salmond
who said he expects more the 80 percent turnout in independence
referendum on Sept. 18 after a poll for the first time gave a lead
for his party’s ‘Yes’ campaign. “We’re encouraged by the
clear panic in the ‘No’ campaign,” Salmond said in a BBC
interview.
"They’ve
failed to scare the Scots, now they’re trying to bribe us. That
won’t work either."
But
they'll keep on trying: just recall "Scottish
Independence 'Yes' Vote Is A "High Risk" Event, Citi
Warns."
Sure enough, here comes Citi with the postmortem released moments
ago, with a note titled: "Sterling Is Set for Negative Surprise
After Scottish Poll"
After Scottish Poll"
- - Recent history would suggest that a move for the pound toward 1.56 vs USD or lower cannot be excluded if Scotland leaves the union, Citigroup writes in client note today.- Outright lead in pro-independence campaign in latest YouGov survey will keep investors anxious about the outcome of the referendum on Sept. 18- Referendum authorities may conduct more polls in remaining week and a half; fact is, of the 86 polls conducted since 2012, only two put ’’Yes’’ vote in the lead- Better U.K. data this week, such as July industrial and manufacturing production, may be of little comfort- arney testimony to Treasury committee hearing on Sept. 10 could highlight political and economic risks for GBP from the referendum
And
from Berenberg
- Risk that Scotland will vote for independence is real and rising; recent movements have been further and faster than anticipated, Rob Wood, U.K. economist at Berenberg writes in client note.
- Still expect a no vote; yes campaign lead is within margin of error and latest poll is not matched in other polls, could be an outlier
- Scotland is re-running the 1995 Quebec independence referendum, which went down to wire before ending in tight vote against splitting from Canada
- A Yes to independence could cause serious short-term pain over uncertainty on currency, EU status; Scotland may be forced to austerity
- May raise risk of U.K. exit from EU without pro-EU Scotland
- A close No vote would keep alive chances of another referendum in 5-10 years, could mean additional powers for Scotland, kickstarting changes to U.K. regional governance
Etc.
Of
course, everyone knows that the end result of the "vote"
will be arbitrated by the proverbial, if not literal Diebold, which
we somehow doubt will allow such an earth-shattering outcome as
Scotland being allowed to determine its fate, to take place. Because
if they can, suddenly it becomes an option for the rest of Europe, a
continent where as Mario Draghi has explained time and again, there
is far too much political capital invested in allowing the peasants
to decide their own fate.
In
the meantime, however, what better excuse than to grab the popcorn,
sit back and enjoy an all-time classic.
No comments:
Post a Comment
Note: only a member of this blog may post a comment.