So where's this market crash then?
"A hung parliament will cause a market crash!"
"We need an overall majority or sterling will tank!"
"Uncertainty will kill us all!"
OK, I made that last one up but they are the sort of things senior Tory spokesmen were saying about a hung parliament before the election. And yet, lo and behold no party has an overall majority and we are still fine. Actually, better than fine the FTSE100 is up by nearly 5% this morning.
I expect much of that rise can be attributed to the EU stability package but notwithstanding that, if no one party having overall control was such a big deal you would have expected those rises to have been cancelled out at least and possibly gone into reverse.
Charlotte Gore blogged about this earlier today and said:
“The Tories” they cry, “were BLUFFING! We haven’t got a deal and the markets haven’t crashed! Ooo the liars! ”Ah. No. Sorry. Isn’t it just as plausible that the markets are rising on the back of confidence that a deal will be done (and considering the deadline set by Nick Clegg) at some point today, and that this deal will be putting the economy and sorting out the deficit as their top priority either way?
That's as maybe but that is not what the Tories were saying before the election. They were very clear that a hung parliament per se would be bad, irrespective of any deals. In fact the deals themselves were considered to be part of the problem ("smoke filled rooms" etc.).
So that argument is blown out of the water now. No party gaining an overall majority does not automatically lead to market chaos, even in extremely adverse financial circumstances.
Another prop under the argument against electoral reform has just been kicked away.
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6 comments:
Early days yet.
-Simon
Given that the EU just promised 750Bn for those euro nations and banks in trouble, I think you can put all of the FTSE boost down to that.
The markets are still on standby for us, waiting for the plan to reduce debt to come out. That's what they will react to.
Yeah, the Tories were just trying to scare people with horrible stories about previous hung parliaments. But Regardless of the result of current negotiations, this parliament is different from previous ones, hung or otherwise. Thursday’s election marked the moment when leadership of the country passed from the Baby Boom Generation to Generation Jones. GenJones, which is the heretofore “lost” generation between the Boomers and Xers, will constitute the largest generational segment in the new Parliament, as many Boomer MPs are replaced by Jonesers. It looks like significant media attention has accompanied this generational transition in numerous countries. If/when GenJoneser Cameron becomes PM, I wonder if we will see the kind of GenJones media buzz that happened when GenJonesers Obama, Sarkozy, and Merkel took over power from their Boomer predecessors.
I quite enjoyed this piece about GenJones in the Indy last week which discusses Cameron and Clegg’s identities as GenJonesers:
http://www.independent.co.uk/opinion/commentators/jonathan-pontell-cleggs-rise-is-the-sound-of-generation-jones-clearing-its-throat-1961191.html
And I thought there was a pretty decent overview about GenJones in the UK here:
http://www.generationjones.org.uk/
for some light post election relief see this clip of Jonathan Ross about Generation Jones:
http://www.youtube.com/user/GenerationJonesTV#p/a/u/1/5ZmO6Pl2E28
Brown resign to make a LibLab government more likely and the pound tanks.
I think you're overegging this one Mark.
The FTSE dropped on Friday (200 points?) plus the pound at a 12 months low, but the EU story may be the dominant factor anyway.
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