No-Deal Brexit Odds Greater Than You May Think


May survived a vote of no confidence and the EU might extend Article 50, but only with conditions. Nothing's changed.

Today added no clarification to the Brexit process.

With the backing of DUP MPs, Theresa May Survived a Vote of No Confidence 325-306.

Most expected that result, as did I. However, Labour leader Jeremy Corbyn is free to repeat the maneuver down the road, and he is nearly certain to do so. Thus, today's vote changed nothing. If anything, the vote highlights the fragility of May's predicament.

If May agrees to do anything that DUP doesn't like, they will abandon her. At some point, a dozen or more Tories might decide the same thing for various reasons.

Corbyn Declines to Meet With May

Following the vote of no confidence, Theresa May declared a get together with all the parties to prepare a way forward. Corbyn rejected the invite unless May took hard Brexit off the table.

She couldn't do that even if she wanted to because enough Tories would then abandon her in the next motion of no confidence.

See where this is headed? Same impasse.

Brexit Delay

The Financial Times reports EU Indicates it Could Accept a Delay to Brexit - With Conditions.

Some interpret this as an indication there will be a delay forever until May gets her way.

There are numerous problems with the notion.

It requires unanimous consent from all EU member countries. France in particular is leery of allowing that. DUP is unlikely to allow that. A sufficient number of Tories might also get tired of the tactics.

Moreover, France wants a commitment that the UK honor the Irish backstop for the duration. The backstop is precisely the problem for DUP and many Tories.

Finally, there are European Parliament elections in May. Is the UK in or out? No one has worked out a solution yet. They will likely work out a fudge, but this is the least of the problems with perpetual delay.

Opposing Views, Same Place

  1. Jeremy Warner says the Brexit dream is over, or so say the markets, and they are probably right
  2. Tim Stanley says Why are Remainers so happy? Right now, Britain is on course for a no-deal Brexit

Both articles are from the Telegraph, and both were posted today. They both cannot be correct.

I side with Stanley. And I posted numerous reasons yesterday.

No-Deal Odds Greater Than You May Think

Let's tune in to today's Eurointelligence report vs what I said yesterday in No-Deal Brexit is the Most Likely Outcome: 2nd Referendum the Least Likely

Eurointelligence: Looking at last night’s Brexit vote in the cold light of the morning, our first thought is that automatic departure from the EU on March 29 remains the law of the land. In that sense, yesterday’s vote has changed nothing. The financial markets concluded that the risks of a no-deal Brexit are reduced. We think the opposite is the case, but for reasons that may not be immediately obvious.

Mish: Forget about a 2nd referendum or an election saving the day. It's far more likely proponents of "remain" actually cause a no-deal Brexit by clinging to ridiculous hopes.

Eurointelligence: After the 230-vote defeat in the House of Commons, we picked up two important pieces of information. The first is that Jeremy Corbyn’s strategy will consist of piling on one confidence vote after another - as opposed to supporting a second referendum. He will do so hoping that one of those votes will eventually succeed as the Brexit deadline approaches. The confidence vote scheduled for today will almost certainly fail. Barring some new developments, this also means that he will not support a second referendum. Corbyn, not Theresa May, will run down the clock.

Mish: Corbyn tabled a motion of no confidence. Unlike motions from within the party, there is no limit to the number of times he may try that tactic. The UK "Remainers" are cheering today's vote as if they have a chance at a second referendum. It's theoretically possible, but it's the least likely outcome.

Reasons Against Second Referendum

  1. People don't want it.
  2. MPs don't want it.
  3. The EU is highly unlikely to wait for one
  4. Heck, no one even knows how to word it

Eurointelligence: The other piece of strategic information is that May will try to maintain her equidistance between no deal and no Brexit. If she were to rule out no Brexit and support no deal, her strategists fear a sufficient number of hardline Remain MPs might eventually support a no-confidence motion. At the same time, she cannot support a second referendum either. After yesterday’s crushing defeat, May's deal as it now stands is off the table. What about Norway-plus? There is no great merit in a Norway-style deal compared to what May has negotiated, except to give MPs an opportunity to support the withdrawal agreement without loss of face. But we doubt that Norway-plus is going to be acceptable to Corbyn. For all his tactical prevarications, the Labour leader has a clearly-stated Brexit preference - membership of the customs union. But there is almost no support for this option in the Tory party, as it would preclude the UK negotiating third-party trade agreements.

Mish: If at some point a majority for a Norway deal surfaced, DUP [or Tories] could scuttle it by siding with Labour in a motion of no confidence. Corbyn would likely chomp at the bit.

Eurointelligence: We see no parliamentary majorities for outright revocation, or for a second referendum either - not by a long shot. What about a request to extend Art. 50 without a deal - as a sheer act of desperation? If there really is a firm majority to stop a no-deal Brexit, then surely this majority could at the very least come together to extend and pretend, and possibly do so indefinitely. We look at the EU side of such a Faustian bargain below, but we should ask ourselves first why Corbyn would support a blind extension when he has May on the ropes. He wants elections, and the surest way to get there is a looming cliff edge. One Berlin correspondent quoted a German politician calling for an unconditional, not time-limited extension of the Brexit deadline. But that person seems not to have read Art. 50: it would be have to be requested by the UK first. And, from the perspective of the EU, it would be political madness to go down this path as it would have severe implications for the balance of power within the EU itself.

Mish: Given what happened today, and based on the above analysis, a no deal Brexit is the most likely state of affairs, one way or another.

Eurointelligence: We could see a scenario in which May’s deal may survive, but not May herself. Another leader, capable of reaching out to the opposition, might be needed. May has lost too much trust during the last two years to be able to negotiate a cross-party compromise.

Mish: The above complications all point to May being outed and replaced by [Boris] Johnson, who wants a hard Brexit.

Eurointelligence: Pro-Remain UK commentators have marveled at the unity of the EU during the negotiations, but this unity was critically premised on the assumption that the UK would never crash out of the EU without a deal. Once the realization sets in that this may not be so, expect divergent interests to come to the surface. From a simple perspective of political risk management, Germany has no interest in exposing its car industry to tariffs from the UK as well as to tariffs from the US, especially when the Germany economy may be on the verge of a recession.

Mish: No matter how one twists and turns, a no-deal Brexit is the default option. The only wildcard left is the EU. If the EU offered a hard guarantee there would be no permanent backstop, May's deal could potentially garner enough support. A no deal Brexit is the most likely state of affairs, one way or another. Many paths lead to a no-deal outcome. There are too many possibilities to say no-deal is likely. Rather, it's the most likely option of the bunch.

Standing With My Analysis

Counting of the financial markets to ascertain the outcome seems more than a bit silly. The Financial markets never thought people would vote for the referendum, but they did.

My comments in Mish vs. Eurointelligence were presented before the Eurointelligence report came out.

I am standing with my analysis and Eurointelligence reached a similar conclusion today. There may be an extension and an extension is needed, not to prevent Brexit but rather to better manage a WTO-Brexit.

Let's stop the absurd fearmongering, without which there would likely be overwhelming support for a managed WTO-Brexit. The extension is necessary only because May wasted two years negotiating the worst trade deal in history.

Mike "Mish" Shedlock

Comments (19)
No. 1-14

Mish, the referendum was a simple in or out. Only when the politicians got in on the act did this whole affair collapse into utter chaos. Frankly, as a former UK citizen I could care less about any of it. Time and chance have moved on. For the UK it's all too late.


Mish, could you make a post (if you havent already) on the mechanics of how trade would work after WTO-Brexit? I'm American and would like to better understand the nuances of how trade works with the UK in the EU and how it would work with WTO rules. Thanks!


Mish, you continue to act like the law itself matters here- it doesn't- whatever is necessary to get to 2nd referendum is what will be declared legal by the EU. Of course, a lot of the MPs can't declare just yet for a 2nd referendum- they have to make it look like they respect the 1st vote, but that doesn't change the fact that they don't want Brexit at all. Juncker was right- when the chips are down, you have lie.


Once again modern politics is about maneuvering to maintain power and almost nothing to do with serving, protecting or governing the electorate. This is what the decline of modern democracy looks like, voters making choices based on image and politicians making decisions based on image preservation, all driven by greed. A petri dish of parasites leading parasites to self-destruction. To know what happens next, just follow the power play.


Soros says no.


EuroIntelligence is spreading misinformation:

EFTA can signs trade-agreements as a group:

And EFTA members can also sign bilateral trade agreements:

"Can the EFTA Member States also sign bilateral free trade agreements?

Yes, the EFTA States are not obliged by the EFTA Convention to conclude preferential trade agreements as a group. They maintain the full right to enter into bilateral third-country arrangements."

Please send this info to EuroIntelligence so they STOP embarrassing themselves.

This again shows how much misinfo is being spread about these issues either due to lack of knowledge or intentionally to sabotage Brexit or any other way of Uk leaving EU.


Norway-plus deal is a no-go as it allows free movement.


The MPs are still scrambling to find a way to keep us in the EU.

Jeremy Corbyn said something in Parliament last night after Theresa May said that she was going to speak with the party leaders. It went along the lines of "I will talk as long as you agree not to leave the EU until we have a deal that we can agree on".

That shattered my belief that Corbyn was someone who would help deliver Brexit. Everyone knows that if you arent prepared to walk away, you will NEVER get a good deal that can accepted. That is why the EU offered us something that could not be accepted, this moment was set up long ago.

Now as far as I am concerned he is just someone else's stooge. It looks like the MPs will go for extending our EU membership until enough of us forget the vote and they can make the arrangement permanent.


There is NO need for an extension.

WTO has rules for any product and requirement to let things move freely.

Also Ireland and UK have already promised to keep the border open and they are both out of Schengen so no migrants marching in.

Once UK Brexit's in WTO-Brexit they also have full control of their fishing waters and agriculture rules and there has already bee a deal with EU on flights and use of aerospace. Also UK decides from the Brexit date whether it let's European workers come in or not.

Bosses at Dover and Calais promised everything would work normally and EuroTunnel said they made preparations and are ready so both freight trains and passenger trains will flow like usual between UK and France. Ferries will also flow as usual and UK government bought added ferry crossings from many ferry companies so service will be even better.

Also while nobody was looking HMRC made a flexible IT based customs declaration service where importers and exporters can submit their customs stuff electronically and there will be just some spot inspections here or there.

All of the Project Fear part 2 has been just LIES.


"Nothing's changed."

Titanic is just an iceberg away.



ML1 is correct about repeated Euroiintelligence inaccuracies in regards to an EEA (Norway-style) deal.

There is one huge flaw in it though: permanent payments. Second, all the EEA countries honor Schengen even though technically it's not part of EEA.

In essence, since the UK currently has a carve-out for Schengen, it would be paying into the EU coffers permanently with no voting rights as it has now.

But the UK would be able to negotiate its own deals.

I prefer Super-Canada, get out and be done with it. Work out something for Ireland. Bear in mind Supper-Canada is sure to be the final endgame if there is a WTO-Brexit.



One more point crossed my mind, and it's a big one. All the EU countries as well as all the EEA countries would have to agree to let the UK into the EAA. The price could very well be fishing rights and/or Schengen. Norway is not really a good deal.


Online betting shows heavily no Brexit by April.

Local analysts say parliament will overrule government and repeal 3/29 Brexit.



No Brexit by April is indeed extremely likely I concur

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