"UK equity market descends into ‘uninvestable’ zone"

[Gengulphus]

In the end the reality of the economy will impact the capital markets. Doesn't help today as it is very difficult to price in the risk of stupid political decisions.

Especially in view of there being widespread disagreement about what that risk is - i.e. about which political decisions qualify as stupid!

Which by the way is not an invitation to discuss that question of which political decisions are stupid here. Rather, it's to indicate that the "the risk of stupid political decisions" is an exceedingly ambiguous term, meaning very different things to different people, and so discussing it is bound to result in lots of talking at cross-purposes, discussions about which political decisions are stupid (Polite Discussions territory) to try to pin the term down, or both.

Far better to talk about risks of factual outcomes such as the "the risk of a no-deal Brexit" and avoid value-judgement terms like "stupid".

Gengulphus

[johnhemming]

Far better to talk about risks of factual outcomes such as the "the risk of a no-deal Brexit" and avoid value-judgement terms like "stupid".

Whatever approach one takes on this (whether or not the word "stupid" is used") it remains that the investment decisions are a bit more like betting on the horses than assessing risk.

I have quite considerable experience of how the political system can go haywire, and there is no doubt that decisions can be taken which show a great lack of intelligence or common sense (ie are stupid).

[TraderTed]

Its really difficult to price in "no deal".

When we failed to join the Euro (Black Wednesday 16th Sept 1992) and sterling fell out of the ERM we ended up with 12% interest rates.

That kind of interest rate would double debt repayments 25years long.

Millennial investors have yet to experience a bond collapse like this.

Beware of companies that look good on paper but are hiding their negative equity with intangible value on the other side of the balance sheet.

Good luck.

[mc2fool]

When we failed to join the Euro (Black Wednesday 16th Sept 1992)...

The Euro wasn't introduced until 1999.

[mc2fool]

When we failed to join the Euro (Black Wednesday 16th Sept 1992) and sterling fell out of the ERM we ended up with 12% interest rates.

And, BTW, the rise to 12% was only on that day, it dropped back the next day and was 6.875% by the end of the year, https://www.mortgagestrategy.co.uk/hist ... -rates-uk/, and so called "Black" Wednesday turned out to be a really good thing, leading to an economic boom afterwards.

[TraderTed]

When we failed to join the Euro (Black Wednesday 16th Sept 1992)...

The Euro wasn't introduced until 1999.

We were in the ERM (Exchange Rate Mechanism) which later became the Euro currency.

Carney recons he can keep the Brexit bond carnage to 5%. That's why he's stayed on. Good luck is all I say, these things invariably hit double digits.

[mc2fool]

When we failed to join the Euro (Black Wednesday 16th Sept 1992)...

The Euro wasn't introduced until 1999.

We were in the ERM (Exchange Rate Mechanism) which later became the Euro currency.

No, it was the ECU (European Currency Unit) that became the Euro.

[Alaric]

We were in the ERM (Exchange Rate Mechanism) which later became the Euro currency.

Arguably "West" Germany had to borrow to finance its takeover of "East" Germany. Everyone else had to pay for it as well.

It saw off Communism, but perhaps not Russia.