Private Eye on the Hedge Funds Supporting Boris Against British Prosperity

Yesterday Labour’s John McDonnell wrote to Cabinet Office Secretary Mark Sedwill requesting an inquiry into J. Peasemold BoJob’s connection to hedge funds. His request was based on statements by BoJob’s sister Rachel and the former chancellor, Jeremy Hammond, that Johson was being funded by currency speculators making money on shorting shares. This means effectively betting against the companies they invest in. These companies believe that Brexit will ruin the economy, which means that they, paradoxically, will make immense money from it. Boris’ connection to these financial interests and his determination to bring about Brexit whatever happens are thus highly suspect.

Inquiry demanded into claims Boris Johnson backers will profit from ‘no deal’ – and it can’t come soon enough

It isn’t only McDonnell, Rachel Johnson and Hammond, who are suspicious of the Boorish Generalissimo’s connections to the hedge funds. Private Eye has been discussing this issue in a series of articles since last year, when they first noticed that the hedge funds were heavily backing his campaign for the Tory leadership. Now that Boris is Tory leader, they’ve published several highly critical of his connection to them.

In their edition for 9th-22nd August 2019, the magazine published this article, ‘Shorts Story’ on page 7.

“The people who bet against Britain are going to lose their shirts,” boomed Boris Johnson in his first prime ministerial speech. In fact the betters-against-Britain are the only true winners in Brexit Britain – as the new PM should know.

One big beneficiary is Johnson’s long-time supporter and funder, hedge fund manager Crispin Odey, whose latest gift was a £10,000 cheque for the leadership campaign last month and most of whose funds are domiciled in, er, Ireland, as Eye 1482 pointed out in November.

Odey was public about shorting the pound last year as the process hit Britain’s currency, then earlier this year reversed his position as the market bought into the idea that a no-deal Brexit would be avoided. (Odey’s funds are also profitably shorting major British names including Royal Mail, AA, Debenhams, Autotrader and shopping centre-owning Intu – hardly a vote of confidence in UK plc).

Now that Johnson’s “do or die” Brexit policy and outright rejection of the Irish backstop has sent the pound tumbling again, the short-sellers can cash in once more. As former Goldman Sachs banker and Treasury minister Jim O’Neill told a Radio 4 interviewer last week: “Foreign exchange and hedge fund-type people [are] probably looking at what’s being said coming out of the UK as almost close to a free lunch.” A government that is deliberately promoting the no-Brexit [sic] risk” has left the traders saying “thank goodness for Boris – he’s giving us a chance to make some money”.

In the days before Johnson’s win, and with his coronation looking secure, hedge funds’ bets against the pound rose to more than $6bn worth, according to Reuters. The ensuing fall will have benefited them to the tune of more than $100m. Somebody’s certainly losing their shirt – but it’s not those betting against Britain.

This fortnight’s Private Eye has another piece about the hedge fund’s connections to Boris, and how they are keeping part of their currency trading secret. The article’s titled ‘Crash and Earn’ and it’s on page 7. It runs

Good to see former chancellors and top former Treasury civil servants catching up with the Eye’s concerns over Tory backers profiting from Brexit-induced turmoil. Last year the Eye (issues 1482 & 1485) pointed out how Boris Johnson-funder Crispin Odey was trousering large sums from shorting stocks heavily exposed to the UK economy, and pound itself.

Last month the Byline Times added up the sums bet against UK stocks by hedge funds that had donated to either the prime ministers’s leadership campaign or to Vote Leave. Its finding that there was an “£8bn bet on no-deal crash out” was roundly pooh-poohed – with some justification, given the crudeness of the calculation and the host of other reasons for shorting shares. But that doesn’t mean there aren’t hnefarious motives in the cross-over between short-selling and political influence, as non-conspiracy theorists ex-chancellor Philip Hammond and now ex-Treasury permanent secretary Sir Nicholas Macpherson have observed.

“Mr Hammond is right to question the political connections of some of the hedge funds with a financial interest in no deal,” tweeted Macpherson last weekend. “They are shorting the £ and the country, with the British people the main loser.” Alas, as the Eye put it last year, “there may be rules against rigging the financial markets, but not if the move is big, brazen and political enough.”

Nor is it possible to find out who is placing bets through currency trades, where the political/economic link is most direct. Post-financial crisis, significant share short-sales are publicly disclosed, but currency trades remain secret. Surely time to change this, and for more disclosure of the real financial interests behind those filling Boris Johnson’s boots.

Given the immense profits these people stand to make from the desperate misery and chaos that will follow a no-deal Brexit, it’s perfectly justifiable to call Johnson a traitor, and his backers economic saboteurs. McDonnell is right to call for an inquiry. Legislation needs to be passed forcing currency speculators to disclose their actions, if not a complete overhaul imposed on the financial sector as a whole.

And Johnson needs to be turfed out of parliament, and replaced with Corbyn.

 

Tags: 'No Deal' Brexit, AA, Autotrader, Boris Johnson, Brexit, Byline Times, Conservatives, Corporate Donors, Crispin Odey, Debenhams, Financial Sector, Hedge Funds, Intu, Jeremy Corbyn, Jeremy Hammond, Jim O'Neill, John McDonnell, Labour Party, Mark Sedwill, Nicholas Macpherson, Parliamentary Inquiry, Private Eye, Rachel Johnson, Radio 4, Royal Mail, Treasury