Sunday , July 21 2019
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Expect 4th or 5th “Meaningful” Vote and a “Conditional” Extension

Summary:
In today's meaningless action UK PMs ruled out a referendum and asked the EU for an extension. It's amusing watching UK PMs make total asses of themselves with meaningless addendum after addendum. The parliament just adjourned. Here's a synopsis of today's Brexit farce via snips from the Guardian Live Blog. The motion to request an extension passed 412 in favour, 202 against, a majority of 210. A second amendment to restrict the extension request to the end of June failed. MPs crushed the second referendum amendment idea by 334 votes to 85 - a majority of 249. 18 Labour MPs voted against second referendum. The Hillary Benn amendment to "enable the House of Commons to find a way forward that can command majority support".amendment failed 312-314. Effectively, the amendment was a request

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In today's meaningless action UK PMs ruled out a referendum and asked the EU for an extension.

It's amusing watching UK PMs make total asses of themselves with meaningless addendum after addendum.

The parliament just adjourned. Here's a synopsis of today's Brexit farce via snips from the Guardian Live Blog.

  • The motion to request an extension passed 412 in favour, 202 against, a majority of 210. A second amendment to restrict the extension request to the end of June failed.
  • MPs crushed the second referendum amendment idea by 334 votes to 85 - a majority of 249. 18 Labour MPs voted against second referendum.
  • The Hillary Benn amendment to "enable the House of Commons to find a way forward that can command majority support".amendment failed 312-314. Effectively, the amendment was a request for parliament to take control of the process. 15 Tories defied whips to vote for the amendment and six Labour MPs defied whips to vote against it.
  • After the final result was announced, Jeremy Corbyn rose on a point of order in the Commons to urge Theresa May to work for a consensus on Brexit. There was no reply from Theresa May, or any other government minister.

EU Extension Statement

The European commission issued a response to tonight’s vote. It is stressing that the UK would not automatically be granted an extension to article 50, and it says the EU would have to consider its own interests when deciding whether to agree one.

Honor of the Day Award - Before Requested

Expect More Resignations by Request

Farce of the Day

Silliest Comment

Expect a Short, Conditional Delay

Andrew Adonis believes the EU will grant a lengthy extension for the UK to work things out.

He is in Fantasyland. It is conceivable the EU will not grant any extension. However, an extension is highly likely for the simple reason they will not want to take the blame for the UK "crashing" out of the EU.

Expect a short extension but it may be accompanied by a demand for a specific proposal, not for the UK to decide what to do.

In any case, the extension will not go past the next European elections in June.

May Runs Out the Clock

Contrary to popular belief, Theresa May has already run down the clock.

​According to Eurointelligence, "It takes 14 days for parliament to replace a prime minister through a vote of no-confidence. 14 days is also not enough time to pass legislation without government support."

The clock expired. We don't know the outcome, but it is binary. The referendum is gone, so is a resignation or vote of no confidence (in time to change the outcome).

Expect a Fourth or Fifth Meaningful Vote

May did not announce a date, but next week seems likely. If that fails by a small margin, May will give it a fourth or fifth "meaningful" chance the final week.

Assessing the Odds

My position had been the outcome was close but no-deal was a slight favorite.

I now believe May's deal is a slight favorite. By the time of the last meaningful vote, the odds may strongly support May.

What Changed?

  1. Theresa may obtained written assurances from Jean-Claude Juncker about the temporary nature of the backstop. The UK attorney general stated he did not beleieve they were legally binding, but that is just one opinion. Some DUP members started to soften.
  2. Remainers who want a second referendum will have to throw in the towel after today's pathetic performance. At least few are likely to decide in a final vote that May's deal is better than a hard Brexit.
  3. Some key Tories, notably David Davis have stated that May's deal could be acceptable following Juncker's changes. On Tuesday, he unexpectedly voted for May's deal.

Point number three was the key factor for me. I did not expect a change of tune from such formerly strong Brexiteer.

Moreover, it is not beyond Theresa May to pick specific blackmail targets. If only one or two votes shy, she can approach Labour MP and threaten to support a hard Brexit if they don't bend. She could go the other way against Tories depending on what is more likely.

So, don't rule out a fifth successful vote immediately following a fourth failed vote.

No Deal Still on the Table

​Despite the above no-deal is still on the table. The only things that can rule it out are a request to stay in (that will not happen), May's deal, or a deal the EU will accept.

The EU is tired of waiting for the UK. There is no time to work out a deal the EU will accept. Norway or Super-Noway are both likely off the table even if the UK were to accept them.

The EU will want a reason to extend. Mote time to come up with a proposal will not suffice. The EU might not take kindly to bribery attempts either.

Finally, we do not really know what is in May's head. It id 100% clear whet her primary option is. We do not know what her second-best option is. It just might be no-deal.

If a third meaningful vote does not get within striking range, she just might throw in the towel and opt for no-deal. She can always place the blame elsewhere if that happens.

Mike "Mish" Shedlock

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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