Is Brexit messing with our minds?
The media and politicians are excited about Brexit. Normal people are bored by Brexit. Over six million people signed a petition to stay in the EU. They were mostly Londoners. Outside cities few people signed. Northern Ireland had the least interest. UK sentiment surveys have reacted, or overreacted, to the noise. The UK is showing that surveys do have problems.
UK manufacturing sentiment rose, as reported inventory levels rose. However, surveys are broad, but not deep. If everyone increases inventory a tiny amount, the survey measure will rise a lot. The economic change will be tiny.
UK service sector sentiment fell. However, the service sector has often strengthened when this has happened in the past. Service sector job vacancies are at all-time highs today. Firms are still hiring. Sentiment may be another "false signal". The media influences people. If there is a big negative story, people will say they are negative even if they are positive. This is a type of "social desirability bias".
Other countries have similar issues. The gap between Republican and Democrat consumer sentiment in the US is another example. Media is ever more sensational. In such a world, investors should remember people may say and do different things.
The world is full of opportunities. Financial markets never stay the same. Formerly Founder and CEO Advanced Dynamic Asset Management
5 年Objectivity is losing out. Party and personal interests are winning. Thus objectivity plays no role. As often in politics simplicity rules as complex and uncertain outcomes like Brexit define any prediction. Electorate is overwhelmed and what sounded like easy and simple solution, was in fact just a fancy packaging without any real content. Now the content needs to be tailored. See the great article: https://blogs.lse.ac.uk/brexit/2018/03/09/brexit-has-the-semblance-of-a-new-english-civil-war/
Principal Software Engineer at Actian
5 年Interesting view that most people who signed the petition were Londoners - do you have supporting evidence of that to contradict what can be seen at e.g.?https://petitionmap.unboxedconsulting.com/, or is it just a gut feel? On the subject of media coverage for Brexit, I've written an article at?https://www.dhirubhai.net/pulse/media-brexit-story-so-far-may-corbyn-less-shambles-than-mark-chopping/ which analyses public data on media coverage for this topic, and would be interested in thoughts on further investigation in that area.