Brexit Disaster Capitalism: 8 Billion Bet on No Deal Crash-Out by Boris Johnson's Leave Backers

[Denzil_DC]

While the Prime Minister defies the law and insists Britain will leave the European Union on 31 October, his backers stand to make billions out of the disaster.
...
At the start of this year, a number of hedge funds – including that of Crispin Odey who made £220 million on the night of the referendum result – announced that, in their view, Brexit wasn’t going to happen and that they were going to take bets out on sterling going up.

Between January to May 2019, less than 10 short positions were being taken out by hedge funds per week. However, that all changed dramatically when Boris Johnson announced that he was running for the Conservative Party leadership on May 16. The number of short positions thereafter doubled, tripled and quadrupled and, by the time of his victory was announced, had risen to around 100 per week.
...
Currently, £8,274,350,000 (£8.3 billion) of aggregate short positions has been taken out by hedge funds connected to the Prime Minister and his Vote Leave campaign, run by his advisor Dominic Cummings, on a ‘no deal’ Brexit.

Does this £8 billion bet explain why the Prime Minister has said that he would rather “die in a ditch” before asking the EU for an extension? Is it the reason why Johnson is willing to defy the Benn Act that stops a ‘no deal’ Brexit? Is the £8 billion any kind of motivation to prorogue Parliament?

https://bylinetimes.com/2019/09/11/brexit-disaster-capitalism-8-billion-bet-on-no-deal-crash-out-by-boris-johnsons-leave-backers/

[OAITW r.2.0]

1. Finally, I understand Brexit.

It was always aboutshorting the UK for profit.

[Anon-C]

2. He would rather die in a ditch!

[Denzil_DC]

3. Maybe he meant

if we don't crash out on 31 October, he will die in a ditch?

[Denzil_DC]

4. In reaction to the Byline Times article, various outlets, including the FT,

have tried to pooh-pooh its findings:

No deal Brexit is not a hedge fund conspiracy

Yesterday the Byline Times outlined some £4.6bn of aggregate short equity positions from hedge funds that, the site claimed, “directly or indirectly bankrolled Boris Johnson’s leadership campaign”, and thus a no deal Brexit.

The inference is that hedge funds have used their financial might to influence the outcome of Brexit via political donations and are now standing to benefit through short positions in UK companies.

The problem is, it doesn’t make any sense. Here are a few of the problems with the article:

...

More to the point, it’s not clear what exactly the authors are alleging. Is the accusation that all donations are motivated by profits, rather than ideology? Or could it now be the case that, with a no deal looking probable, they might be positioning their portfolios accordingly? That’s assuming, of course, they have a mandate from their investors to position their portfolios accordingly.

The fundamental issue is that the entire article is totally speculative. Which puts it firmly in the realm of conspiracy theories. Turns out, it’s not just the far-right who like to imagine that there’s a malevolent, rich financier controlling political outcomes.

https://ftalphaville.ft.com/2019/09/12/1568281802000/No-deal-Brexit-is-not-a-hedge-fund-conspiracy/

Nothing to see here, huh? Here's the re-rebuttal:

Following Byline Times’ story on the donors to the Prime Minister we provide more information on our findings and the importance for British politics

Byline Times’ exclusive story examining the short positions of hedge funds, which have been donors to both Boris Johnsonand his Vote Leave campaign, has aroused great public interest.
...
While hedge funds exist to reduce risk by betting on the markets, the prime concern which has emerged is their increasing role in political party and campaign funding and the potential for those campaigns and parties to be influenced by this.

In response to criticism of the article, what follows is a summary of our investigation for further discussion.
...
Byline Times was not suggesting, as the Financial Times’ Alphaville blog says, that “the inference is that hedge funds have used their financial might to influence the outcome of Brexit via political donations”. Byline Times does believe that “with a no deal looking probable, they might be positioning their portfolios accordingly”.

What Byline Times did ask in the article is a matter of high public concern: does Boris Johnson’s reliance on these donors explain why the Prime Minister has said he would rather “die in a ditch” before asking the EU for an extension? Could it be the reason why Johnson is willing to defy the Benn Act that stops a ‘no deal’ Brexit? Could it be any kind of motivation to prorogue Parliament?

https://bylinetimes.com/2019/09/12/why-boris-johnsons-funding-from-hedge-funds-is-a-matter-of-public-interest/