How Hedge Fund Manager Crispin Odey Feels About the US, UK and Europe

Hedge fund manager Crispin Odey: Crispin Odey, the manager of the London-based hedge fund Odey Asset Management, recently expressed his opinions on the U.K., Europe and the U.S. In an event set up by Financial News, Odey discussed the economic situation on both sides of the Atlantic.

Crispin Odey

Regarding the economic recovery, Odey told Financial News that while a 4% GDP growth rate can still be reached in the U.S., potential overvaluation in the stock market represents an intermediate-term danger. “At some point we all know that the only thing that will stop bond yields from rising is when short rates start to rise. Once that starts to rise, you are re-pricing capital and then suddenly a growth stock shouldn’t be on 30 times, it should be on 20 times and that is very painful,” he said.

At the same time, Odey considers the main problem is that both the U.K. and Europe in general are dependent on low interest rates, which means that even a slight increase could ruin the economy. Even a 20% decline of the currency and an appreciation of the competitive position did not help the U.K., one of the reasons being that around half of country’s wealth is concentrated in its capital.

“My problem with the UK is we are very dependent on short rates remaining low. That applies to the rest of Europe as well. Any moves in interest rates upwards would be felt very severely through the system. It means that the risk for continental Europe is that the only way that we pay down the debt is with cash flow,” Odey stated.

His thoughts on the Federal Reserve are of particular interest:

“Up until March of this year, everything was going according to plan. The bond market was quiescent and had been put to sleep, essentially. The last bit Bernanke had to address was negative equity in the housing market. After all, the problem with America is it had marked property to market but, in marking it to market, a 50% fall in house prices meant most people had negative equity in their houses. How could you get a house-building boom going, even if it was long overdue, if you couldn’t provide the equity?”

The whole transcript of Odey’s speech can be accessed by following the link.

Recommended Reading:

How Does Warren Buffett Make Money?

CommonWealth REIT Drama Might End Next Week, Hedge Funds Paying Attention

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

The 15 Most Murderous Countries in the World

10 Largest Colleges in the World: Bigger Isn’t Always Better

Comedians in Cars Getting Coffee: The 6 Comedians Seinfeld Needs to Interview

Easy Money: The 10 Most Successful Investors in the World Today

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!