Cyprus-Forum.com

[miltiades]

" By Michael Holden | LONDON

Britain's vote in a June referendum to leave the European Union had no constitutional substance, according to lawyers leading a bid to force the government to seek parliamentary approval before formally starting the Brexit process.

"It was an advisory referendum, no more than that," David Pannick told the High Court on Thursday.

Prime Minister Theresa May has said she will trigger Article 50 of the EU Lisbon Treaty, the mechanism by which Britain begins a two-year process to leave the bloc, by the end of March next year and there will be no parliamentary vote beforehand."

http://www.reuters.com/article/us-brita ... SKCN12C2PZ

[Tim Drayton]

Indeed, parliament is sovereign, and when it enacted the European Union Referendum Act of 2015 making provision for the referendum, it could have stipulated that the result would be binding on parliament and the government, but did not do so (see the text here: http://www.legislation.gov.uk/ukpga/201 ... d/data.htm). This means that it was an advisory referendum. On the other hand, David Cameron did seem to imply that he would invoke Article 50 immediately if there was a vote in favour of 'leave', so what does that say about old Etonians and 'My word is my bond'?

[Tim Drayton]

All avenues were of course going to be explored to overturn the referendum result, let's be honest. I still will not be at all surprised if Brexit doesn't happen, at the end of the day. However, and I suppose it depends upon your POV, what does that say about "democracy"?

What it says is that in a capitalist society, democracy is just a smokescreen and the ruling class will get its way. Normally, the right-wing tabloids tell the masses to vote the way the ruling class wants, so everything seems to be hunky dory and the ruling class's will appears to be the majority choice. In the referendum, we witnessed the strange spectacle of the right-wing tabloids promoting a position that is detrimental to the ruling class's interests in what is/was essentially a challenge to their rule by a group of rich influential people who aspire to power and for whom mass discontent is just a vehicle for achieving these goals. I see the ruling class now starting to unfold a multifaceted strategy to preserve their position and interests and dispell this challenge to their rule which will ultimately keep the UK in the EU, or at the very least maintain very close links with it. It is ironically a move that, in my sincere opinion, is in the best interests of the masses.That's my take.

[Robin Hood]

RH:My question is; How to you value a currency to determine its true value?

Maximus: Thank you for taking the time to explain, I appreciate it.

It’s more complicated than stocks. With stocks, you can calculate an approximate value of what a share is intrinsically worth from the balance sheet, more specifically, its assets minus liabilities. The client list also has worth, so the cash flow forecast also has to be considered and this can give you an idea about what is a reasonable price to pay for future earnings too. So if the company was liquidated today, and all creditors were paid, and all debtors paid their debts and the companies assets sold, that is how much it is worth. Then, dividing that sum between the shareholders or the shares outstanding and you get a rough idea about how much a share is intrinsically worth.

I think maybe that is more the theory than in practice. As I understand it: after the initial trade, a share has no intrinsic value it has only a face value, and this is determined primarily by computer algorithms looking at trading events. Lots of buys it goes up and lots of sells and it goes down. Much like we have seen with the pound over the last few weeks.

Hence a share has a face value that is only valid at a specific moment in time and can change in milliseconds. When many share holders tried to sell at the market price, the share price drops very quickly to what you have described as its true or intrinsic value, or realistically what you would get for the company as a job lot! The two figures would be vastly different.

With currencies, you can treat the country as the business. This is one way of calculating value but its hard to quantify.

I agree ... it is very hard to quantify, that is why I asked the question.

Another way is to calculate the mean price, over a certain period of time. Currency prices always revert to their mean price over time, because this is what it is worth. I can eyeball a chart and tell you roughly what that price is, hence determining whether it is under or overvalued.

It’s really guesswork and opinion then .... rather than an exact science? So any suggestion of the amount a currency is over or under valued is an ‘reasoned opinion’. So, unless the links LR posted all used the same source and did not ‘work it out for themselves’ , it would really be impossible to come up with an accurate figure of a currency overvaluation.

In a later post:

An estate agents that has practically no assets, rents an office and has a few computers and desks in it - is more or less worthless if it was liquidated today. Maybe the client list is 'worth' something.

Does that not also apply to financial institutions, (High street Banks?) except of course their head office computer facilities cost millions, the only assets they have are your deposits (actually a liability) and debt!

[Maximus]

RH:My question is; How to you value a currency to determine its true value?

Maximus: Thank you for taking the time to explain, I appreciate it.

It’s more complicated than stocks. With stocks, you can calculate an approximate value of what a share is intrinsically worth from the balance sheet, more specifically, its assets minus liabilities. The client list also has worth, so the cash flow forecast also has to be considered and this can give you an idea about what is a reasonable price to pay for future earnings too. So if the company was liquidated today, and all creditors were paid, and all debtors paid their debts and the companies assets sold, that is how much it is worth. Then, dividing that sum between the shareholders or the shares outstanding and you get a rough idea about how much a share is intrinsically worth.

I think maybe that is more the theory than in practice. As I understand it: after the initial trade, a share has no intrinsic value it has only a face value, and this is determined primarily by computer algorithms looking at trading events. Lots of buys it goes up and lots of sells and it goes down. Much like we have seen with the pound over the last few weeks.

This is Warren buffets approach. He is a student of Benjamin Graham. They are both value investors and have made billions out of the practice. of finding undervalued stocks from analyzing the balance sheet, the product, the competative space and so on. Then they wait for the market to neglect or irrationally discount it and buy at a price below its intrinsic value plus a margin for error. What he does is basically like trying to buy $1 for 70 cents and wait for the market to correct itself. Or in other words, wait for the price to revert back to the mean price or intrinsic value. Perceived value is what causes the price to change and is motivated by human emotion. intrinsic value is what the asset should be trading at but for some reason, its not.

Hence a share has a face value that is only valid at a specific moment in time and can change in milliseconds. When many share holders tried to sell at the market price, the share price drops very quickly to what you have described as its true or intrinsic value, or realistically what you would get for the company as a job lot! The two figures would be vastly different.

You cant make money without volatility. What you have descirbed is basic economic theory of supply and demand. Shareholders, speculators, bank traders, commercial traders, hedge funds etc with or without electronic algorithms or discretion were either selling it or pulled their liquidity out of the market. When there are no buyers to support the price and or if there is an overwhelming amount of selling pressure it can cause the price to sharply drop like that. It will fall to a price where buyers find the price attractive again to start buying. OR until those who bought at a higher price cant take the head anymore and become sellers to get out of the market to cut their losses.

With currencies, you can treat the country as the business. This is one way of calculating value but its hard to quantify.

I agree ... it is very hard to quantify, that is why I asked the question.

Another way is to calculate the mean price, over a certain period of time. Currency prices always revert to their mean price over time, because this is what it is worth. I can eyeball a chart and tell you roughly what that price is, hence determining whether it is under or overvalued.

It’s really guesswork and opinion then .... rather than an exact science? So any suggestion of the amount a currency is over or under valued is an ‘reasoned opinion’. So, unless the links LR posted all used the same source and did not ‘work it out for themselves’ , it would really be impossible to come up with an accurate figure of a currency overvaluation.

Its like a scientific art, Human behaviour cannot be confined to a mathematical formula however it is consistently predictable over time and this manifests itself in to price patterns where you can anticipate a potential change in price before it happens. Trading, investing etc is about prediction and anticipation or participation based on a probable outcome. It is an educated guess or a gamble. It depends how much research or homework you have done and whether you have an edge or not.

In a later post:

An estate agents that has practically no assets, rents an office and has a few computers and desks in it - is more or less worthless if it was liquidated today. Maybe the client list is 'worth' something.

Does that not also apply to financial institutions, (High street Banks?) except of course their head office computer facilities cost millions, the only assets they have are your deposits (actually a liability) and debt!

Yes it does, the banks also own prime real estate, they also have loans outstanding and investments in other business's that they can sell.

[Maximus]

Son told me he wants to be a Pilot and so I have plans to send him to the Oxford Flying College, Oxford University. He won't be doing it the way I did. He is starting young too as I am teaching him many things about space, time, distance, orientation, weather but just the basics.

So, it's time to make plans and map out his future!

I have all the contacts too!

Thats brilliant, many people would love to be in your sons position.

[Maximus]

Remember, one currency is sold to buy the other. so to buy GBP foreign capital must be converted in to GBP, presumably because there is a need to purchase goods and service in Britain.

So, if there is a lack of demand to at least support or raise the price of the GBP it means that there is a lack of economic interest in Britain. or GBP is being sold to purchase goods and services in another country or is seeking a safer haven.

Speculators are not the major participants in the market. International commercial activity is which is facilitated by the banks. They also have trading desks and trade on their own account based on their order flows. They have an edge and end up being the prime liquidity providers.

[miltiades]

UK PRICES ON THE UP.
"
‘It is all going up’: Rising prices start to hit home for UK shoppers


Effects of plummeting pound will crystallise costs of Brexit for UK public "
" After a 17 per cent fall in the value of the pound against the dollar since the Brexit vote, Britain, an island nation that has always imported goods from around the world to satisfy its needs, is waking up to rising prices. "


"The first psychological blows were landed at airports, ferry and rail terminals, where British travellers suddenly found that foreign currency booths were selling them euros at parity with sterling. "

Well so what !!! Our NHS is ....better off to the tune of 50 MILLION POUNDS A DAY
Of course we now have ....our country back

https://www.ft.com/content/96d1c6b8-91e ... 28cb934b78

[miltiades]

" Britain is facing a prolonged period of weaker economic growth as the plunge in the value of the pound pushes up prices for consumers, an influential think-tank has warned.

The EY ITEM Club said the economy had been more resilient than expected following the vote to leave the European Union but this picture was deceptive.

It predicts inflation - which has been below 1% for nearly two years - climbing to 2.6% in 2017."

http://news.sky.com/story/uk-faces-prol ... t-10620828

So ...what !! We have our country back and or NHS is better off by 350 million a year

[Tim Drayton]

There is a bizarre win-win situation at the moment for exporters, given that Sterling is collapsing at the prospect of a 'hard' Brexit that will be disastrous for the country's economy, but the UK still remains a full EU-member for the time being, and is able to trade freely within the block and under the block's preferential trade agreements with the rest of the world. This means that exporters can now sell more of their goods and services abroad as they have become cheaper in their customer's currencies - and the figures suggest that the main boost in exports has been to the EU. This situation will not continue if Brexit actually happens, though.