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Think the British Banks Hit Bottom? You’re Wrong

Posted August 5, 2008

"It’s not true that no one saw the credit crunch coming. Sure, we may not have known exactly how the blow-up would manifest itself. But it was obvious to many people in the City and on Wall Street that something had to give." — John Stepek

by John Stepek

Baltimore — (TFN):  British banks and their shareholders are having a tough old time of it. But their woes have made at least one person an awful lot richer.

Hedge fund manager Crispin Odey has paid himself £28 million ($54.7 million) after his hedge fund made £55 million ($107.5 million) from betting against the sector. And well done to him. After all, plenty of banking executives got hefty bonuses last year for losing money, so people can hardly complain when someone gets a bonus for actually doing his job competently.

Now Mr Odey was apparently a bit early in his call. “We had a very average 2006 because he was positioned and it wasn’t working yet,” Odey Asset Management chief executive David Stewart told The Telegraph.

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But it shows that it’s not true that no one saw the credit crunch coming. Sure, we may not have known exactly how the blow-up would manifest itself. But it was obvious to many people in the City (London) and on Wall Street that something had to give.

The bad news for the banks is that it seems Mr Odey reckons there’s still a lot of money to be made from betting against them… Read on to learn more.

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Posted by John Stepek · Filed Under International Investing 

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