The Court of Public Opinion

The reaction and even anticipation for today’s Supreme Court ruling on the UK government’s triggering of Article 50 is a salutary tale for the markets. Yay, they thought, this is an actual event with a specific time and a binary outcome! Kinda like a central bank meeting! We like those.

But then, politics rather overtook it, didn’t it. Hence the timing of Theresa May’s speech last week. The question is not If Brexit, but What Brexit. She, like all good leaders, moved the narrative on. Now the German Finance Minister pops up to urge a Switzerland style model; etc. Some in the markets now cling to the point that it has to pass the House of Commons and the House of Lords before it’s a done deal. Sure, procedurally it does. But this isn’t like a central bank being forced to meet its mandate. The Court of Law doesn’t matter. It’s the Court of Public Opinion that does.

Politicians derive their power from electorates and then harness it to drive their agenda. With even at least some of the Remainers now convinced the fight lies on as soft a brexit as possible, rather than none at all, why would a Majority in the Lords back a Minority of The people? Sure they’re unelected and required for scrutiny. But we have never had such a direct mandate from the British electorate since the referendum to go into the EU over 40 years ago.

The point is that there would be riots on the streets if it’s blocked. There were already marches in Washington after Hillary won more of the popular vote…. and there will be more of these to come.

Markets need to wake up and smell the political coffee. The voters matter more than central banks now.

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