Search This Blog

Thursday, April 28, 2011

Crispin Odey - Odey Asset Management Q1 Call Notes

Crispin Odey of Odey Asset Management recently had his Q1 conference call. As some of you may now, Crispin is famous for predicting the credit crunch and betting correctly on many a banks demise.

In the Q1 call they interesting talk about the threat of inflation.

"The only question is when you get to a position where the West is competitive, we are not going to continue to see wage growth of 1.8% or 1%, because the fact is we are building up this sense in which we are way behind the line in terms of keeping up the cost of living so we anticipate, whether it is 2012 or whether it is 2013, that we will not see a 1% rise, we will see a 8% rise and if we see a 8% rise, 75% of that will come through straight back into inflation. So our forecast is that inflation, far from being 5% at the end of that, it will be at 11%. Which means at that moment interest rates have to rise because that is the moment that the central banks have got that mandate. If interest rates rise from 0% to 7%, you can be sure that at round about 35% to 40% of that rise will make its way again through to inflation."

The threat of inflation is huge and you have seen Seth Klarman's Baupost Group and some other astute funds position for high inflation going forward via various black swan insurance policies.

Without further delay..enjoy:

Crispin Odey's Transcript Q1-11

No comments: