Another Misunderstood Spin-Off, page-63

@travelightor,

My ha'penny's worth is that I have absolutely no idea what this will mean for demand for CYB's products and services in the next 3 or 6 or 9 months.

But what I am happy to say is that - having seen my share of these kinds of extraneous "shocks" over time - before too long people will wake up, wipe the sleep from their eyes, and realise that the sky hasn't fallen on their heads, and - like they have always done - that they still have to put their pants on, one leg at a time.

And I have no doubt that people will then go about their business of going to work, shopping, having a beer down t'pub wi' t' mates, cheering on their footy teams, complaining about the weather and generally behaving like the western consumers that they are.

And I am also sure that the profit-driven initiative and the sense of cunning mercantilism that is so intrinsic to the British gene will see economic opportunism prevail. As it has done over the millennia.

If I sound a bit philosophical, its because I am. I have learnt long ago that it is futile to concern oneself with things that cannot be controlled.

"Isn't this a bit too complacent an attitude?" you might ask and, for many peoples' circumstances, you might be right.

But the way I view these sorts of things is to say to myself, "Sure, for a while (months, not years) companies in the UK might keep the pause button pushed on their expansion and investment plans, and consumers might keep their wallets ensconced a bit deeper in their trouser pockets than they would ordinarily have done.

But - like it always does - the recency phenomenon will decay and CYB, along with its competitors, will in the future still be profitably financing economic activity like they have always done.

While the drama that is Brexit all makes for great media headlines, there's nothing structural that has changed here, I don't think... the British Isles and their inhabitants aren't floating off across the Atlantic Ocean headed for the inevitable slide off the edge of the earth."

For me the more important thing is that the business does not become somehow permanently handicapped during the current period of uncertainty and that the internal restructuring remains intact.

Because the biggest source of value liberation potential inherent in CYB - to my way of thinking - comes from a wholesale technology-driven cost reduction exercise (very similar to what Australian banks accomplished in the early 2000's), rather than from growing the loan book at 5%, rather than 3%.

And by the way, if you did hold a gun to my head and demand that I offer my view of what this might do for CYB's Revenue line, then I would refer to the economic curiosity whereby the rabidly-consuming south-eastern part of Britain is a significant importer of goods and services, whereby the industrial and manufacturing heartland of the Midlands is far more export oriented.

With Sterlings's 10% devaluation in just the past 96 hours (15% down compared to 12 months ago), there will be a lot of struggling UK manufacturers and industrial concerns that have been gifted a nice, sudden margin fillip.

And CYB's customer base - both commercial and personal - is centered exactly in Britain's struggling manufacturing base north of Birmingham.

And that's the beautiful thing about economics: it has a lot of built-in, self-moderating mechanisms (which is one of the reasons that accurate forecasting of economic variables is so difficult).

Make no mistake, short-term, the UK economy is going to stall; but as sure as night follows day, demand for credit will rebound.

Just like it always has done.