Zany and Vinny's Brexit revisited

.. Bloomberg raises important questions about whether Farage, a former commodities broker with many friends and backers in the financial sector, said remain had won with the intention of benefiting hedge funds who stood to gain from a sudden drop in the pound.


Farage told Bloomberg his concessions were not aimed at moving the markets for anyone, and told MailOnline that he did not try to mislead people by conceding defeat. But speculating on Brexit has made at least one very rich Brexiteer that bit richer. Crispin Odey was one of the largest donors to leave, handing over just shy of £900,000 to the campaign.


On hearing the referendum result, Odey said: “I feel fantastic. It’s a fantastic decision by the electorate.” Odey had a special reason to feel “fantastic”. He’d bet on Brexit hitting the pound by “shorting” sterling and moving 65% of his fund into gold in anticipation. Odey’s fund made £220m in the space of just a few hours. As he said at the time: “I think I may be the winner.”


Hedge funds make money by betting on economic events, and hit the big time during the turbulence caused by the 2008 financial crisis. EU policies designed to restore stability to financial markets, such as the 2012 short selling regulation , are anathema to this sort of investor. Odey has voiced his objection to tighter EU regulation of hedge funds and has claimed that new EU banking rules will contribute to a “terrifying” environment for “investors”, although a distinction between investors and gamblers might be helpful here.


Hedge funds, including the one run by Odey, made some big wins by betting on the damage Brexit would do to the pound and UK stock markets. Some of his hedge funds have since lost significant value, but if the UK actually leaves the EU, the ensuing volatility will create excellent conditions for them to roll their dice again. He’s already banking on Britain’s largest firms performing badly in the wake of Brexit. But such is financial engineering that you don’t even need to bet on something going in a particular direction – you can also bet that uncertainty itself will go up or down.


The threats posed by leaving the EU to the many – our jobs, rights and protections – seem to be benefiting an elite few. These City wide boys – the real “bad boys” of Brexit – have used and continue to use Brexit as a way to swell their own wealth and power. This could be the ultimate big short, and a victory for disaster capitalism. It seems that Soros was right in his prediction: “A vote for Brexit would make some people very rich – but most voters considerably poorer.”