The Law of Unintended Consequences Holds True and Scotland to Pay for New Wall

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The Law of Unintended Consequences Holds True and Scotland to Pay for New Wall

The Law of Unintended Consequences Holds True and Scotland to Pay for New Wall


The Market and Political View from Adam Jepsen, Founder, Financial Spreads.


- - Brexit and the Law of Unintended Consequences - -

As planned, our margins, i.e. the amount a client has to deposit in order to trade, are back to normal.

However, we have written to clients again to warn them that there could be a prolonged period of volatility and that caution is still needed.

It's clear that there is no one at the helm of UK PLC and aftershocks will continue for an extended period of time.

Small trade sizes could be the way forward.

Having said that, clients have, on the whole, impressively navigated the post-referendum tsunami of last Friday.

Most clients simply stayed away and didn't trade. The majority of those that did trade stuck to shorting the pound vs the dollar. A trade that paid handsomely.


- - - - The Law of Unintended Consequences Holds True - - - -

A large part of the Brexit vote will have been an anti immigration / protecting the UK's borders vote.

The irony here is that the Brexit could open a new 96 mile land border with the EU.

With 62% of the Scottish vote wanting to remain part of the EU, another referendum on Scottish independence is more than conceivable.

If Scotland somehow manages to leave the UK but remain within the EU then England will have a new 96 mile land border with the EU.

(Yes, we know there is an unprotected land border between Ireland and Northern Ireland but that was largely ignored in the referendum debate so I will remain ignorant of that issue too).


- - - - Scotland to Pay for New Wall - - - -

In the same way Donald Trump is getting Mexico to pay for a wall it seems only reasonable that Boris Johnson amp; co make Scotland pay for a new wall along the top of Cumbria and Northumberland.

Being a fly on the wall for that conversation between Boris and Nicola Sturgeon would be interesting.

Of course, Scottish independence isn't a forgone conclusion.

The Scottish National Party is stronger than it was at the time of the September 2014 Scottish Independence referendum and the Brexit vote is the perfect example of Westminster forcing Scotland to do something it doesn't want to do.

However finances will be a key problem.

The budget for an independent Scotland didn't stack up 2014 when it was predicated on crude oil at $113/barrel. Brent crude oil last traded at that price in June 2014.

Scotland's First Minister will be well are of the fact the Brent crude oil has been trading below $55 dollars since July 2015.


By Adam Jepsen, 11 July 2016


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