Winner of the most credulous hedge fund of the year award goes to BlueBay Asset Management. The firm has confirmed that it has been reassured about the Corbynista plans for the economy during Brexit, after a meeting with Shadow Chancellor John McDonnell.

Financial News reports this week that ‎Bluebay, a £57bn firm, has halved its positions shorting Sterling because McDonnell told them he would deliver a softer Brexit than the Tories if he gets into power.

Mark Dowding, a partner at BlueBay, told FN:

“I was reassured that, were Labour to be in power, their approach to Brexit would be softer. From my perspective the UK does materially better under a softer Brexit.”

Dowding ‎said that the markets, or those in them making investment decisions, were misguided in ‎expecting a Labour government to lead to an economic crisis. Bluebay called the Brexit referendum right, but I suggest that when it comes to politics they should be wary of Marxist Shadow Chancellors making soothing noises.

Putting to one side whether Britain is committed (this week) to staying in the Single Market or Customs Union, it is remarkable that McDonnell’s nice guy routine should be working anywhere in the City.

Recently I’ve encountered a few of City denizens so furious ‎about Brexit that they are willing to measure McDonnell on the cunning manifesto presented in the general election rather than his 40 years of Marxism and far-left denunciation of capitalism and markets. McDonnell hardly kept his core beliefs secret before becoming Shadow Chancellor, anyway. His major influences, he declared in 2007, were the writings of Marx, Lenin and Trotsky. He relishes the politics of the street and has talked approvingly of students “smashing” up Milbank, in Westminster.

To overlook this and judge him and his closest colleagues trustworthy on markets is to ignore one of the key components of the Leninist analysis and to fail to pay attention to the lessons of history. Leninists like McDonnell believe in co-opting the mainstream, riding waves of anger, exploiting it for all they can and using and abandoning (or worse) useful and temporary allies along the way in pursuit of a Socialist society which requires coercion. Once in power the Leninists exploit emergencies, and when the crunch comes they use executive order, capital controls, expropriation and class warfare. How many times does this have to happen before the lesson is learnt for good?

Further proof that Bluebay are being over optimistic comes with Vince Cable wrongly declaring in the same Financial News story that the firm is right because Brexit is a much bigger threat than Corbyn to the UK economy. Call me old fashioned, but Marxists in the Treasury dedicated to destroying the capitalist system sounds a lot worse than leaving the EU politely and negotiating a free trade deal.