Financial markets place bets
on political outcomes, such as how or even whether the E.U. state of Britain
would secede from the Union. Leading up to the March, 29, 2019 secession date,
the shifting odds moved stock, bond and foreign exchange markets, especially
given the instability in the state government in general and more particularly
on reaching a deal with the federal government in Brussels on just how the
state would secede. Of course, the political
magnitude of a state seceding from a Union such as the E.U. or U.S. is not
captured by how markets anticipate the risks. To reduce secession to the end of
a trade treaty does the secession and the Union itself a grave injustice. More
generally, political changes do not reduce to their economic anticipations or
effects. Nor is it wise to assess the political viability of future political
events by the economic assessments in financial markets.
The full essay is at "Secession E.U.-Style."