Wednesday, 2 October 2019
A front-page headline in yesterday's Guardian (1st October) highlighted ministers defending Mr Johnson on "groping allegations." Whilst not wishing to downplay the importance of this incident (these incidents?) I should prefer greater prominence to be given to the allegations that supporters of the prime minister and Brexit are hoping to make considerable, indeed very considerable , financial profits if we do indeed leave the EU with no deal on 31st October. The report of these (actually a denial) appeared only on Page 9.
The possibilities of profiting from Brexit by "shorting"* (see below but please don't try it at home ) are detailed in Gavin Esler's book, Brexit without the Bullshit (page 89). Esler explains that one fund manager, Crispin Odey, donated almost £9 000 to the Leave campaign, then "shorted" sterling and maybe other UK assets, and made a financial "killing" when the pound fell in value as a result of Leave winning the Referendum.
Since then, according to Esler, Odey is reported to have "shorted" Talk-talk to the value of £7.5m, Intu (£40m), Lookers (£2.5m) and some retail stores, including Debenhams (£17m).
In the event of a no-deal Brexit the pound is likely to depreciate yet again and Codey and his associates will experience another "morning with gold in its mouth."
Odey, of course, denies any such intention. However, the possibility is sufficiently serious to have caused no less than Phillip Hammond, former Chancellor, and Lord (Nick) Macpherson, former permanent secretary to the Treasury, to "question the political connections of some of the hedge funds with a financial interest in no deal."
Lord Macpherson has warned: "They are shorting the pound and the country, with the British people the main loser."
It is hard to avoid the conclusion that the machinery of government has been high-jacked with the help of a group of the super-rich who aim to make themselves immeasurably richer and the rest of us somewhat poorer through an action of national self-harm.
* How to "short."
It's risky and you need a lot of many to start with (or iron nerves)
1. Identify a currency or asset you think will fall in value.
2. Borrow shedloads of the currency or asset.
3 Sell them quickly at the current price.
4. When the currency or asset falls in value buy them back at the lower price.
5. Return the currency or assets borrowed to their original owners
6. Pocket the difference.