1/ Quick thread. At the end of the third week of Brexit being "done", I can only say that I'm exhausted.

Immediate pressures on companies who have been trading goods have been on grappling with all of the new customs and regulatory requirements.

2/ It's clear that agrifood businesses have been the hardest hit due to the SPS checks and other requirements.

But for others, the shift from a distributor model to importer/exporter has been a challenge. This hasn't been helped by certain IT system not working as planned.
3/ So are these "teething problems"? Companies are grappling with the new systems & formalities.

Some are, but many others aren't.

Worth noting that freight volumes are still below average. But stockpiles are running low, coming weeks are going to be interesting.
4/ Two issues that are immediately facing many businesses that won't be addressed by sorting this teething period.

First, many businesses are facing the largest shift in their cost base in a generation.
5/ This comes from the cost of dealing with the customs procedures, upgrading IT systems to manage the new requirements, setting up European operating centres to comply with regulatory requirements, new immigration costs, the list goes on.
6/ The question they're going to be asking themselves - are their operations still profitable?

This is something that is going to be something that will continue to play and play in the weeks and months ahead.

For many, the answer will be no. So what do they do as a result?
7/ Some will look at their pricing models and figure out how much of those costs they can either put onto their suppliers, absorb themselves or push onto their customers. None are particularly attractive options.

The other (worse) possibility is to stop trading.
8/ If you're interested in how companies can formulate strategies and manage these pressures - my talented colleague Euan wrote about it in December (pre-deal but majority of points still apply).

https://t.co/IMDCu9g2mK
9/ The second issue is whether companies can continue to operate in the same way that they did previously - this has quickly become apparent in sourcing and meeting Rules of Origin.

Supply chains are going to shift as a result and is deeply complex.

But that's just one example
10/ So is this all the disruption that we're going to see?

Absolutely not.

One such example: due to the pandemic, business travel isn't happening. All the changes that are coming down the line in the activities which individuals can carry out while in the EU has changed.
11/ Also what we have in the trading relationship today is not the end-state of trade between the UK and EU. In some ways its going to get worse, as grace-periods and transitions end.

On the other hand, there are areas where the UK and EU are meant to deepen cooperation.
12/ What that means is businesses are going to need to stay on top of all of these changes and disruptions in the coming months and years.

This will take time, resources and attention. TL;DR - Brexit wasn't done on 1 January.

Now, off for a large glass of wine.

More from Brexit

They have started in the Scottish case

Looks like a near-concession that the side letter is Padfield-compliant
So many stories of new barriers to trade between UK and EU, but you might be thinking at some point these will run out. The government is certainly hoping so. Well they may slow down, but trade relations and regulations are not static, and changes will lead to further problems.

The likelihood of continued trade problems for a £650 bn trade relationship is why there should be a huge cross-government effort led by the Foreign Office and Department for International Trade to put in place the necessary resources to seek best results.

There isn't.

So the UK's relationship with the EU currently consists of two not particularly good deals and no consistent effort to manage current problems or prevent future ones. Joint committees are a second order problem to putting in place the right internal structures.

But that's been the consistent UK problem in relations with the EU since 2016. Lack of focus on getting the right internal structures, people, asks, strategy, too much attention on being tough and a single leader.

News just in. This doesn't necessarily mean the right structure being put into UK-EU relations. I suspect Frost's main role is to ensure no renegotiations with the EU.

Also, wonder what this says about the PM's trust in Michael Gove?

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A THREAD ON @SarangSood

Decoded his way of analysis/logics for everyone to easily understand.

Have covered:
1. Analysis of volatility, how to foresee/signs.
2. Workbook
3. When to sell options
4. Diff category of days
5. How movement of option prices tell us what will happen

1. Keeps following volatility super closely.

Makes 7-8 different strategies to give him a sense of what's going on.

Whichever gives highest profit he trades in.


2. Theta falls when market moves.
Falls where market is headed towards not on our original position.


3. If you're an options seller then sell only when volatility is dropping, there is a high probability of you making the right trade and getting profit as a result

He believes in a market operator, if market mover sells volatility Sarang Sir joins him.


4. Theta decay vs Fall in vega

Sell when Vega is falling rather than for theta decay. You won't be trapped and higher probability of making profit.