Archive for March 12, 2019

Theresa May: Friend of Hedge Funds

Posted in Uncategorized on March 12, 2019 by telescoper

Compare and contrast the following behaviour of the Pound Sterling versus the Euro last night

And this morning

Of course the Pound’s rise yesterday was based on speculation that the Prime Minister Theresa May’s trip to Strasbourg would lead to changes to the Withdrawal Agreement between the UK and EU that would make it acceptable to the House of Commons (by which I mean to the pro-Brexit faction of the Conservative Party). The subsequent fall this morning is explained by the fact that she achieved nothing of substance and the Withdrawal Agreement is unchanged.

It seems to me that there are two possible explanations for yesterday’s elaborately choreographed charade. Only a fool would think that Mrs May succeeded in negotiating a concession from the EU, but one thing she can be sure of is that the House of Commons (and particularly the Conservative Party) has plenty of fools in it. The PM might have thought this absurd piece of flummery was worth a shot and convincing Tory buffoons who haven’t read the Withdrawal Agreement anyway. It might even* work!

On the other hand, regardless of what happens in this evening’s `Meaningful Vote’, one thing is clear. Some currency traders will have made an awful lot of money by short-selling the pound. Theresa May’s Strasbourg pantomime will undoubtedly have made her very popular among the Hedge Fund Managers who in any case are the main financial beneficiaries of Brexit…

*It worked with some, but not enough to stop the deal being lost by 149 votes.

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