Brexit: Bookies and Polls Got It Wrong, Forces of Decentralization Gains A Pivotal Upper Hand

The British has decided to divorce the EU.  

This represents the final result

Well, polls were mostly wrong in predicting Brexit…

And so were the bookies…

A Telegraph quote lifted from the Zero Hedge.

Paddy Power has announced Remain has a 93% chance of success in the EU referendum vote after a flood of last minute bets were placed on the In campaign.

Stephanie Anderson, Politics Trader at Paddy Power said: “After opening the day at 1/3 we’ve had no choice but to cut REMAIN into 1/12 this morning after a constant stream of money.

"Punters have been waiting until the day of the vote to part with their cash and REMAIN is all they’re interested in. As a direct result LEAVE has drifted out to 7/1 and that could move out even further as the day goes on.”

Paddy Power has seen £500k bet on Remain in the past five days  including more than ten five-figure bets.

It makes the EU Referendum the biggest political betting event on record with British bookmakers on course to take £100m.

Dr Pippa Malmgrem explained on her tweet the anomaly in bookie odds or the prediction markets. Apparently it is the currency bets rather vote per head that skewed the skewed the betting in favor of “remain”.

Curiously, a major Brexit proponent, Nigel Farage, almost conceded to Brexit’s defeat simply based on survey and initial vote counting results. Later Mr Farage backed down and reversed course.

Of course, the surveys may not be entirely wrong. That’s if these were deliberately done to create a bandwagon effect or to manipulate voter’s preferences.

Nevertheless, Brexit was a victory for decentralization and the defeat of establishment politics.

While I expected the establishment to pull a magic to secure a win for the “remain” camp, apparently it didn’t happen. 

Nevertheless, it is a dynamic that has been fated to occur.

I wrote in March 2012

In reality, EU’s economic integration serves merely a cover for covert plans to establish political fantasyland. Eventually the path towards centralization will lead to unnecessary violence and the self-implosion of an unsustainable and unviable political system

If people in Brussels hold economic integration as their primary goal, then all they should do is voluntarily drop their political ambitions and allow the individual market economies in Europe to flourish with little or no political baggage attached.

But of course, this would mean that EU bureaucrats would be out of jobs and vested interest groups would lose their politically endowed privileges.

In November 2012 I predicted:

Yet political solutions (bank and sovereign bailouts, ECB’s interventions, surging regulations, higher taxes and etc…) will not only hamper economic recovery, they will lead to more social frictions which increases the risks of the EU’s disunion—as evidenced by the snowballing secession movements—and of the escalation of violence.

And the Brexit contagion has begun: voters in Italy, France and Netherland now also want their own referendum.

These are very bad developments for highly leverage undercapitalized EU banks (which of course would most likely have a domino effect on the world).