May Doubles Down, Demands Respect From EU as Talks Hit Impasse (Sterling Gets Pounded, FTSE Spikes)

Brexit, the ridiculous constrainted trade association of Europe (sold as a free-trade association), should be halted as soon as possible for the UK’s sake.

(Bloomberg) — Theresa May hit back at the EU for flatly rejecting her Brexit plans, accusing the bloc of failing to treat the UK with respect, as the stalemate in negotiations deepened.

The prime minister revived a warning that no deal is better than a bad deal, a day after EU leaders bluntly told her that her blueprint for the divorce won’t work. In a statement in London, a day after European Union leaders used a key summit in Salzburg, Austria to tell her that her approach won’t work (for who?), May told them it was “not acceptable to simply reject” her plan.

On Wednesday, May was left looking isolated after leaders told her to re-work her plans, and set her a deadline of next month to come back with new ideas. British officials had been hoping for warmer words from European leaders at the Austrian event — to bolster May as she prepares for her party’s conference in a fortnight.

“Throughout this process I have treated the EU with nothing but respect. The U.K. expects the same. A good relationship at the end of this process depends on it” and “at this late stage in the negotiations it’s not acceptable to simply reject the other side’s proposals without a detailed explanation and counter proposals,” she said at her Number 10 Downing Street residence Friday.

The prime minister said in March that she wouldn’t be “buffeted” by calls to walk away from talks, but as the tone of negotiations deteriorated on Thursday, she hinted that she might have changed her mind. She said the U.K. would continue to prepare for a no deal exit.

The pound dropped as much as 1.4 percent against the dollar as May spoke, the most on a closing basis since November. It was trading 1.3 percent lower at 1.3095 as of 2:16 p.m. in London.

Britain is due to leave the bloc in March next year, with or without a deal. If there’s no divorce agreement, there will be no transition — a two-year grace period designed to prevent the country and its businesses tumbling into a legal limbo.

The reaction in the UK Pound Sterling?

maypouund

The FTSE rose 2% on the May defiance.

footsie.png

Here is a comparison of the UK and Germany sovereign yield curves, demonstrating that the UK and Germany are actually different economies.

ukgeryc

Fintech Company Wirecard Replaces Commerzbank In Germany’s DAX Index (Out With The Old, In With The New)

Wirecard AG, the fintech company whose shares have almost doubled this year, will replace Commerzbank AG in Germany’s DAX Index. Wirecard offers its customers electronic payment transaction solutions and risk management, as well as the issuing and processing of physical and virtual cards in addition to traditional banking services.

A founding member of the stock benchmark since its inception in 1988, Commerzbank will be removed effective Sept. 24, index provider Deutsche Boerse AG announced Wednesday. The country’s second-largest listed bank is down about 32 percent this year.

wirecard

Commerzbank is only Germany’s 4th largest financial institution in terms of total assets as of 2017.

germbanksassets

Both Commerzbank and Deutsche Bank has been pounded since the global financial crisis in terms of stock price and are shadows of their former selves.

dbcommerz.png

Non-performing assets were relatively new to Commerzbank (in blue) while Deutsche Bank (in red) has a history of non-performing assets (NPA). At least Commerzbank has shed a large share of their NPA,

cmdbnpf

So, bye-bye traditional financial institution Commerzbank and hello to the new wave Fintech company Wirecard.