Little Interest in Pre-Article 50 #Brexit Discussions With British EC Staff?

The crowdfunding campaign against the ban on British European Commission staff, in particular, discussing Brexit plans with UK officials before the UK triggers Article 50 has raised less than a tenth of the £35,000 target from only 109 people, with 18 days to go.

The campaign is intended to attack the ban on all EC staff announced by EC President Jean-Claude Juncker in June: "No notification, no negotiation."

But it seems few people are interested in pushing the issue. Perhaps another reason for doubting that the UK will ever be adequately prepared to trigger Article 50?

Economic Impact of #Brexit (If Any) Is Years Away...

Not a day goes by without someone declaring that the economic  impact of Brexit has been either overestimated or is being underestimated. 

This has to be utter rubbish. 

The UK is still in the EU. Situation normal. Nothing has changed. Changes in the economic data must be due to other causes.

While the impact of the referendum itself - and the related political nonsense - might have affected some figures, I don't see how the actual impact of the UK leaving the EU could be reflected in any way. 

When might any impact be felt, if ever?

Not only is the UK still waiting to decide exactly when to trigger the formal two year 'Article 50' leaving process, but it is also still trying to figure out the list of issues that need to be resolved and the appropriate negotiating strategy and tactics to resolve them favourably (if possible), not to mention how to recruit the people who are supposed to be doing the negotiating. 

Personally, I doubt the UK is capable of getting this done in any conceivable time frame, and to trigger the Article 50 process without figuring these things out would be insane. So it would not surprise me if the UK never actually manages to trigger the Article 50 process (the wisest course). 

Which would mean Brexit itself would have zero economic impact. 

There may be economic volatility while the implications of triggering Article 50 are being worked through, but that would still not really be the result of actual Brexit. The referendum experience has shown that people don't really look beyond the horizon, so they would not be reacting to an actual decision either way, just the trigger decision itself.

If the UK does manage to trigger Article 50, then we would see another burst of economic volatility while everyone digests (the madness of) that decision and what it might mean when the leaving process is complete. The chief issue would be whether the UK would be able to complete the necessary negotiations within the two year time limit, in order to avoid the default trade position (the worst case, unless of course the UK manages to negotiate an even worse set of deals than that - not inconceivable!).

There would then be all sorts of fresh economic volatility during the two year Article 50 period, while everyone reacts to the latest news about each of the trade negotiations might affect them and their sectors. Speculators would have fun, but everyone else would need to wait and see what actually shakes out. Meanwhile, any news about the plight of other EU members and the EU itself would also affect everyone's view.

Of course, if the leaving process were completed, there would be reactions to how the various deals actually unfold and whether they would be extended or renegotiated. But that position would be the 'new normal', so not really Brexit related at all.

Britain's Emigrants Queue For Ex-EU Handouts

As the final echo of the Vote Leave battle bus dies away amongst the villages and byways of England's south west, a strange chant rises in its place. Jacob Rees-Mogg MP, Conservative Party spokesperson for South West England, pauses in his piece-to-camera for a German film crew investigating Roman tin mines, listens, then shakes his head. "Never mind," he says to the director. But as the crew ready themselves for a re-take, a battered green Land Rover draws up and a familiar local official emerges. 

"Not now, Arnold."

But the man steps forward, flat cap held nervously in front. A faint breeze brings with it the hum of "We want our grants!" and catches the man's exposed comb-over so that it stands up like a horse-hair plume on a Roman soldier's helmet.

"Beggin' your pardon, sir."

The Germans begin filming.

"Not now, I say."

"It's about the three fifty million, sir."

"Yes, yes," Rees-Mogg snaps, trying to focus on the camera. "Boris has it in hand."

"That's what we're worried about, sir."

Rees-Mogg waves him away. "It's a figure of speech, man. Can't you see I'm working?"

"Not all of us are lucky enough to have jobs, sir."

"Look, we have years to worry about that, but a week to complete this film about the region's economic heyday before the funding from Brussels runs out. We can discuss it later." 

"That's not what the gentleman from the Commission used to say - "

"Go away! Please!"

"- he were very responsive."

Rees-Mogg heaves a sigh and says to the German. "Sorry, we can edit all this out."

"The Cornish are restless, sir," Arnold persists. 

Rees-Mogg sighs again, "It was ever thus," he says, partly for the German director's benefit. "Look," he says, turning to Arnold, "Explain to them that it was written in letters three feet high and thirty feet long that all the money would be spent on the National Health Service. So if they want their share, they should jolly well get sick."

"I could tell 'em that, sir. But I don't think they'll be very pleased."

"Well, then they can call Boris."

"Yes, sir."

"Now go away."

"Yes, sir."

"Forever."

Little Britain Votes To Leave

In the worst act of vandalism since the Visigoths sacked Rome in 410, the UK has been ripped out of the European Union by regional voters, led by a trio of politicians that caricaturists could only dream of who perpetrated a campaign that "descended into dishonesty on an industrial scale". 

Yet the Brexit map of the UK shows that those who voted for Britain to leave the EU are not only among those who were the net beneficiaries of EU funding, but are also utterly dependent on the areas that voted to remain to negotiate the terms of Brexit and to plug the regional funding gap that the EU money filled: the 'Leave' campaign demanded that Britain's contribution to the EU be diverted into the black hole that is the NHS budget and that is exactly where it will disappear.

All the facts and projections labelled as 'doom and gloom' now loom as reality. 

Forking The DAO - Robin Hood Update

No, this is not science fiction: the Ethereum world really has been rocked by financial scandal, and has less than a month to resolve it.

It's very hard to explain this situation simply to fans of financial scandals who may be less familiar with cryptotechnology.

In essence a bunch of people ('curators') got together and created - or curated - a new type of open association, which they christened a Decentralized Autonomous Organization, and this first example “The DAO". 

The DAO is built on a new type of cryptographic software platform called a 'distributed ledger' or 'blockchain', in this case known as Ethereum. Such ledgers typically have their own virtual currency, in this case called 'ether'. 

The DAO's rules are in written in software code, so it is in fact a computer programme (or application or 'app'). The DAO is designed to be controlled by investors who use their 'ether' to buy DAO 'tokens' that entitle them to vote on the The DAO's affairs - the main issue being how the DAO should invest the 'ether' it raises through selling 'tokens' to investors, who can also start mini-DAO or 'child DAOs' to focus the investments. By last week the The DAO had raised $60m worth of ether at the going exhange rate.

You can maybe see what's coming...

A savvy participant noticed that The DAO would allow any participant to start a 'child DAO' under their own control and drain 'ether' from The DAO into the child DAO without bothering any of the other participants. 

So they did. 

Cue outrage!

The other participants and 'curators' now say this move was an "attack" that exploited a 'vulnerability' arising from a 'mistake' in The DAO's code. As a result, a 'soft fork' has been imposed by the DAO's 'curator' for 28 days, effectively freezing the child DAO and the ether within it. Many of The DAO's participants want to see the soft fork become permanent - or a 'hard fork' (this saga is providing endless scope for unfortunate puns). Yet The DAO web site's makes it very clear that the code is the sole contract governing The DAO (though what contractual significance The DAO's web site has is therefore questionable).  At any rate, The DAO clearly allowed what in fact happened.

It's ironic that the self-styled "attacker" has resorted to lawyers and is threatening court action to protect his/her/their financial gains. But it would be a fascinating case to run, and a real-world judgment on the issues (applicable law, jurisdiction, whether there was a mistake for which relief could be given etc.) could actually be very helpful to the development of distributed ledgers and the applications that run on them.

23 June:

Meanwhile, the parties are battling it out in a cryptographic re-enactment of Robin Hood (or Barbarians at the Gate?). So-called 'white hat' hackers (claiming to be 'good actors') attempted to secure the remaining ether in The DAO in other child DAOs but the 'attacker' joined them as well.

But is either set of participants 'right' or 'wrong', 'good' or 'bad'? Are they not simply competing in any fashion that The DAO allows?

Would you do business with The DAO or its 'children'?

Would you be happy for The DAO or any child DAO to be an investor in your business? 

Watch this (cyber)space!

Further reading:
Frances Coppola has written a great piece for Forbes.
Introduction to the DAO.
Open letter from "The Attacker".
DAO Wars: Hacker Counter-Attacks and Infiltrates the Robin Hood DAOs