Hedge fund boss Crispin Odey doesn’t think much of the current government.
“David Cameron is not a leader”, he told London’s Evening Standard newspaper yesterday, adding that George Osborne is hated by the City.
Given that the head of Odey Asset Management has previously been a big supporter of the Conservatives, his comments are particularly striking.
Odey’s main problem, he says, is that the government doesn’t seem to understand the situation the economy is in. Cameron “had no idea that we were about to go into a cataclysmic crisis”, says Odey. “It was easy to see it was about to happen. And it was easy to see how bad it was going to be. It’s not a recession, it’s a depression.”
Unsurprisingly perhaps for a man whose firm manages £8bn in assets, Odey thinks the solution to the crisis lies in the financial sector. “We have got to get the banks working again. That means the end of bashing the bankers.
“If there is no credit growth there is no economic growth. The last time we were in a depression was the 1930s, and what got us out was cheap money. We need a zero interest rate and a housing boom.”
Unfortunately for homeowners, the 53-year-old financier doesn’t think a housing boom is likely. In fact, he expects the opposite. “Property is ludicrously expensive,” he says.
That may seem a bit rich coming from a man who submitted plans for a £120,000 chicken coop on the grounds of his estate, but you can’t dismiss Odey’s record – he shorted banks long before the crisis, but also called the market rally of 2009.
So he’s worth paying attention to. And if he’s right on property now, then things could get very uncomfortable for both the UK economy and homeowners. “House prices are right at the top of their cycle. I think they could crash. I’m not saying it’ll happen immediately, but I do think they can drop by half.”