Brexit – Gone Girl ! – Not quite

Like a scene from the hit movie “Gone Girl”, PM May has been found to have been a political walking corpse all along. And Now she’s been “found”, what’s in store for the Brexit fiasco?

Well having been handed her real P45 by her party ( remember when the prankster handed her a prank P45?) it’s now time to consider the following;

Will she go?

who will replace her?

Will they get the Brexit train back on the tracks?

will that steady UK financial markets ?

will a steady UK help steady global financial markets ?

The other question, will the government fall?, seems unlikely. Unless the choice is someone who seems willing to sell the Northern Irish contingent out, it’s almost certain the DUP party will support the Tory Government. But it can’t be ruled out entirely.

We’ll address each as follows.

Will she go?

Yes we think she will – although many will feign support – like Sajid David already, the damage is done and she is unable to negotiate with EU while fighting off a leadership challenge at home. The right thing to do would be to step aside.

who will replace her?

there are a number of choices, as the party moves to assemble a short list. As this has come as little surprise to the media, there are a couple of excellent summaries, and we don’t pretend to know more about the individuals than these commentators so if you want detail, here’s where to go – here and here

We suspect there are three types ;

The extremists

This group includes Boris Johnson, Michael Gove, Jacob Rees-Mogg,

The believers

This group believes its possible to craft a deal which can allow Brexit. Typically they believe in the Norway route, but some believe in a patch work quilt of the best elements of trade deals the EU already have, including the Japanese deal signed earlier this week.

It includes Sajid David, who has moved between leave/remain spectrum and could look like a believer. Highly regarded, he’s probably favorite.

Same could be said of Dominic Raab, but his allegiance to the Leave campaign puts him on the boundary between Extremist and believer. Therefore we conclude he would not unite the party.

At the other end of the spectrum, between believer and remained, lies Jeremy Hunt. A firm remainer, he has portrayed belief to court cabinet position and would certainly do so for No. 10. Would not unite the party for long.

Another centre-believer who could unite the party is David Davis. However, he will likely go down as the one who held the knife, and as such, is tainted.  As Brexit-secretary, he Has attempted to find a line between the various factions both in UK and in EU, and with some success. A definite contender, we’re it not for themfingerprints

Other outside bets in the center, include Penny Mordaunt and Angels Ledsom, the latter having been May’s competitor for the leadership before she stepped down over comments about May. Neither seem to be possibilities to us.

The remainers

This group either thinks UK should stay, or it’s too difficult to craft a deal and some back a second referendum. Given JRM who runs the influential European Research  Group (ERG) has stated that the next leader can’t be a Remainer, this group will be thought to be unlikely.

It includes

Dominic Grieve, who has helped Sheppard the Brexit process through difficult pastures, always in the spirit of Parlimemtary democracy. It was his amendments that ensured Parliament retained a say in the final aspects of the process, and his last amendment sealing the (almost binding ) right of Parliament to abort a “no deal” hard Brexit outcome. The one remainer who has a chance of uniting a rebellious party.

Amber Rudd, who seems to be the remainer sections chosen one. Unlikely upto the job and could tear the Tory party apart.

Will they get the Brexit train back on the tracks?

Of the three groups, it seems unlikely  an extremist or a remainer could even attempt to get the process back on schedule before the End-March deadline. In this case it’s almost certain that markets would have to have braced and be terrified enough of the hard exit, to initiate a parachute chord-pull by Parliament, which now has an (almost binding) hold over the rip-chord.

But it’s possible a believer can attempt to put the humpty back together, especially if the EU accedes to an extention past April.

will that steady UK financial markets ?

Certainly most of those choices would make UK financial markets more queasy, at least in the short term. And we suspect, few would be able to find the path to our chosen “out” – the second referendum.

Of the list above, we suspect Sajid David and Dominic Grieve are the only ones with the capacity to make an unruly rabble like the Tory party see sense and opt for a second referendum.

will a steady UK help steady global financial markets

However, certainly global markets would perform better, ceteris paribus, if the Brexit fiasco was calmer, or even resolved. Global contagion is rarely linear and obvious, operating through unseen infections and conflicts that prevent global policy makers from seeing the benefit from co-operation, until it’s too late.

So who do we fancy ?

well in keeping with the surprise choice of Jay Powell as Fed chair, we’re going to go for one of two outsiders.

our main pic is Dominic Grieve – yes the same Grieve of the “amazements”. He has been perhaps the only member of the government that has demonstrated honor and integrity. In fact, he can look sufficiently like a believer, that he may be given the role.

The second is the extreme outside 1000-1 choice – David Cameron, at least on the basis of the old adage “ you broke it you pay for it”.