Canadian Railroads > Impact of Brexit on CP CN

The NY Times reports on the balancing act facing Justin Trudeau. Canada has an export economy, and the railroads have a huge role. Britain is Canada's third largest trading partner and a collapse of the British £ will hurt export of Canadian goods.

http://www.nytimes.com/live/eu-referendum/guarded-reaction-in-canada

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US over Canadian dollar had been creeping up to 78 cents until yesterday, but dropped to 77 cents today. Probably had to do with oil prices dropping 5%.
Vote was assumed always to be close one way or the other, yet the markets did not program a defeat at all, which goes to show how disconnected they are from the real world and main street economies. CNBC hosts this morning were expectedly brooding, sulking, and declaring a recession a certainty, as they did with the volatile Dow last January.



Edited 1 time(s). Last edit at 06/24/16 12:25 by joemvcnj.

As somebody who has spent a lot of time in the U.K. and Europe, I watched the referendum closely.  While I was rooting for stay, I really think the economic impact of "independence" will be short term.  Countries like Norway and Switzerland have dealt with being outside the E. U. very well.  Necessity will demand a reasonable accomodation by both sides.  Potentially the biggest looser may be the E.U. which is loosing some of it's biggest incentive to reinvent itself.  While I was rooting for stay, I have a lot of sympathy for the desire of some Brits to leave.  In my mind the U.K. has never really been an integral part of Europe, things like Empire and the Channel has always set them apart.  What I find ironic is in my experience the Brits were relatively meticulous in trying to follow the arcane rules that eminated from Brussels.  In contrast, France, a pillar of of the E.U., flouts the rules about every chance they get, primarily because of the influcence of the unions and the small farmers.  Yesterday my stock portfolio made a tidy profit based on speculation that stay would win, today my tidy profit disappearred (and them some) because of leave.  C'est la vie.

JBWX

Scotland and Northern Ireland were overwhelmingly in favor of remaining in the EU. Now they want to secede. If they pull that off, which I think unlikely, the UK reduces to just England and Wales.

joemvcnj Wrote:
-------------------------------------------------------
> Scotland and Northern Ireland were overwhelmingly
> in favor of remaining in the EU. Now they want to
> secede. If they pull that off, which I think
> unlikely, the UK reduces to just England and
> Wales.

There's a very good chance Scotland will go.

Well, I think CP will stay so EHH can pursue other railroads.  CN, goes independent and will be just fine. "They don't no stinking other railways."  ONR will stay as they will always need government help.  QNSL, Cartier, Essex Terminal will go independent as well... Southern Ry of BC will apply to become a US railway...

in in other words, the railways of Canada will be fractured ...

In a cave and praising the Brits for reclaiming their sovereignty.

YY



 

Being one of the older voters, not living in London, I voted for Brexit. I didnt expect it to happen, however. As the earlier post alludes to, I think it is very likely that the Scots would vote to leave the UK if it comes to a vote. With North Sea oil revenues drying up, good luck to them. London, Scotland, and Northern Ireland voted remain- just about everywhere else voted leave. It just shows how out of touch the establishment was.

SD70M Wrote:
-------------------------------------------------------
It
> just shows how out of touch the establishment was.

We have a similar problem in the U.S.  But the political result is not always good.  Too many people are looking for simple answers, for the comfort of the old days. 

JBWX



Edited 1 time(s). Last edit at 06/26/16 10:17 by jbwest.

jbwest Wrote:
-------------------------------------------------------
> SD70M Wrote:
> --------------------------------------------------
> -----
> It
> > just shows how out of touch the establishment
> was.
>
> We have a similar problem in the U.S.  But the
> political result is not always good.  Too many
> people are looking for simple answers, for the
> comfort of the old days. 
>
> JBWX

Remember...."be careful what you wish for....you just might get it". I think there will be buyers remorse for Brexit.

Is it true that this Referendum is non-binding, therefore Parliament doesn't have to do anything ?
Maybe this whole thing was a ruse to get PM Cameron to go away.

joemvcnj Wrote:
-------------------------------------------------------
> Is it true that this Referendum is non-binding,
> therefore Parliament doesn't have to do anything
> ?
> Maybe this whole thing was a ruse to get PM
> Cameron to go away.

The referendum requires the prime minister to invoke the "article 50", which seeks Britain's exit.  One wrinkle is whether Scotland's and Northern Ireland's local parliaments also have to concur. If they don't concur, it's possible the referendum won't be binding on the  PM.  Or, that, Scotland and Northern Ireland would seek to remain in the EU.

The Northern Irish have a huge problem, as jobs in Free Ireland would no longer be available to them under EU rules. they wouldn't have the EU advantage of moving back and forth. Goods from the south would be  taxed as imports, which would be a huge problem for meat, dairy, vegetables, etc. Exports to the south would be taxed, too.

Lackawanna484 Wrote:
-------------------------------------------------------
> joemvcnj Wrote:
> --------------------------------------------------
> -----
> > Is it true that this Referendum is non-binding,
> > therefore Parliament doesn't have to do
> anything
> > ?
> > Maybe this whole thing was a ruse to get PM
> > Cameron to go away.
>
> The referendum requires the prime minister to
> invoke the "article 50", which seeks Britain's
> exit.  One wrinkle is whether Scotland's and
> Northern Ireland's local parliaments also have to
> concur. If they don't concur, it's possible the
> referendum won't be binding on the  PM.  Or,
> that, Scotland and Northern Ireland would seek to
> remain in the EU.
>
> The Northern Irish have a huge problem, as jobs in
> Free Ireland would no longer be available to them
> under EU rules. they wouldn't have the EU
> advantage of moving back and forth. Goods from the
> south would be  taxed as imports, which would be
> a huge problem for meat, dairy, vegetables, etc.
> Exports to the south would be taxed, too.

BBC had an interesting article about the "constitutional" issues.  I don't think anyone really knows how that might play out, other than the likelihood that Scotland will hold another election about independence.  All the uncertainty is a big part of the problem.Theoretically the import/export issues can be solved with a plethora of bi-lateral and multi-lateral agreements, assuming both parties benefit.  But the complexity of daunting.  It's like labeling my slide collection, I'm so far behind that I don't know where to start.  Both Norway and Switzerland provide a model, but they had a lot more time for it to evolve.  Will be interesting how strong the "buyer's remorse" bit becomes, and what if anything can be done about it.  

JBWX

jbwest Wrote:
   Will be interesting how strong the
> "buyer's remorse" bit becomes, and what if
> anything can be done about it.  
>
> JBWX

Everybody needs to calm down, including the leaders of the EU.  Lets see how this looks in 4 weeks, not 4 days. 

Lots of blame to go around.  The Labour Party is beginning to take a very public verbal beating,  either from those who say the party did not do enough to try and stop "Brexit" or from those out in the country who favor the party but feel the party is out of touch with them and their needs.


Allen



Edited 2 time(s). Last edit at 06/27/16 09:57 by bradleymckay.

bradleymckay Wrote:
-------------------------------------------------------
> jbwest Wrote:
>    Will be interesting how strong the
> > "buyer's remorse" bit becomes, and what if
> > anything can be done about it.  
> >
> > JBWX
>
> Everybody needs to calm down, including the
> leaders of the EU.  Lets see how this looks in 4
> weeks, not 4 days. 
>
> Lots of blame to go around.  The Labour Party is
> beginning to take a very public verbal beating, 
> either from those who say the party did not do
> enough to try and stop "Brexit" or from those out
> in the country who favor the party but feel the
> party is out of touch with them and their needs.
>
>
> Allen

4 weeks?! I think the fall-out will take longer to settle than that! A piece on the BBC website today seemed to come down on the side of saying this is going ahead and Scotland can't stop it. It will be interesting to see what happens in the rest of the EU now...it might be a positive thing for the UK if the EU now disintegrated, which would happen if just one more significant country also decided to hold a referendum and get out.

What i think we're seeing is to do with demographics and a 'perfect storm'...we had the financial crash in 2008, we've had a lot of immigration because our economy held up well and so a lot of public sentiment became very anti-immigration. When people feel insecure like this they seem to hanker after the 'good old days'....but trying to turn back the clock rarely works.

Trying to figure out what will happen medium-long term...you might as well flip a coin, which is basically what the voting public did and it only just came down on one side! Short term...things could get very messy!



Edited 1 time(s). Last edit at 06/27/16 10:30 by exhaustED.

joemvcnj Wrote:
-------------------------------------------------------
> Is it true that this Referendum is non-binding,
> therefore Parliament doesn't have to do anything
> ?
> Maybe this whole thing was a ruse to get PM
> Cameron to go away.

It's binding. Cameron was pretty popular and arguably the best PM we've had for a long time. The financial plan was working better than in most western economies but the irony is that it led to a lot of immigration which has whipped up a lot of anti-establishment sentiment.
I think in the US also, the insecurity of the public after the financial crisis, combined with a lot of immigration means that a lot of the public have had it with the establishment, who they feel are not on their side.
Only time will tell if the backlash that is Brexit ends up being a case of cutting off a nose to spite a face!



Edited 1 time(s). Last edit at 06/27/16 11:58 by exhaustED.

< Everybody needs to calm down, including the leaders of the EU.  Lets see how this looks in 4 weeks, not 4 days. >

You should see some of those rabel-rousers on CNBC. I think they love to incite panic, may even cause some small, short-sighted, ignorant investors to sell who should not be in the market to start with.  
 

I think Britain saw the fact that borders were not being protected and that EU countries were being over run with Muslims that do not assimilate into the general population and the trouble that causes and said enough is enough.  Plus they were not happy with Brussels controlling to many things.

tomstp Wrote:
-------------------------------------------------------
> I think Britain saw the fact that borders were not
> being protected and that EU countries were being
> over run with Muslims that do not assimilate into
> the general population and the trouble that causes
> and said enough is enough.  Plus they were not
> happy with Brussels controlling to many things.

Not really a muslim issue, more like eastern european immigrant levels. 

The loss of the coal mines and the steel mills took a huge toll on the railroads, and on the many industrial workers in the pits, shops, etc.  That's been a huge issue in Wales, and parts of the north of England. People who mined coal for 50 years are not going to become social media digital artists tomorrow.

Not a lot different than the US. Telling a guy that the work his father did, that he did, that produced a good income, has gone and isn't coming back, ever.  Probably the same conversation people in Bellefontaine had when the New York Central shut down its operations. Or Weirton Steel in Weirton WV. Or any number of paper making towns in Maine, mills in South Carolina, or bank back offices around the country, etc.

Lackawanna484 Wrote:
-------------------------------------------------------
> The loss of the coal mines and the steel mills
> took a huge toll on the railroads, and on the many
> industrial workers in the pits, shops, etc. 
> That's been a huge issue in Wales, and parts of
> the north of England. People who mined coal for 50
> years are not going to become social media digital
> artists tomorrow.
>
> Not a lot different than the US. Telling a guy
> that the work his father did, that he did, that
> produced a good income, has gone and isn't coming
> back, ever.  Probably the same conversation
> people in Bellefontaine had when the New York
> Central shut down its operations. Or Weirton Steel
> in Weirton WV. Or any number of paper making towns
> in Maine, mills in South Carolina, or bank back
> offices around the country, etc.

Different issue really, not one that's played a big part in this EU referendum, although i guess part of the unhappiness with immigration is to do with a perceived threat to jobs, which is kind of related... The simple fact there is that the world constantly changes; anyone who thinks that holes in the ground will yield treasure forever are setting themselves up for a fall. No natural resource lasts forever, especially in a geographically small country like the UK.



Edited 2 time(s). Last edit at 06/28/16 02:39 by exhaustED.