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Audacious Aussie Bet Gone Wrong Sinks Odey In April

Tyler Durden's picture




 

In March, billionaire hedge fund manager Crispin Odey said we all have “grandstand seats for an imminent market shock.” As it turns out, a “shock” was indeed “imminent” for Odey but unfortunately, he ended up on the field of play rather than observing from the bleachers. As FT reports, a leveraged bet against the Australian dollar that had been working well cost the London-based manager dearly in April. Here’s more:

Odey Asset Management founder Crispin Odey’s flagship hedge fund slumped 19.3 per cent last month, after it was caught out when the Australian dollar strengthened against the US dollar.

 

The large one-month move, from one of London’s best-known hedge fund managers, wiped out Odey European’s small gain in the first three months of the year and took its 2015 performance to -18.2 per cent, according to investor documents.

 

The €2.33bn fund has built up a short position in the Australian dollar against a long position in the US dollar, which drove monthly gains of 4.6 per cent in March. However, since the end of March the Australian dollar has gained against the US dollar.

 

Odey’s currency position is leveraged, which magnified the losses.

 

This week, the Reserve Bank of Australia reduced its cash rate by 25 basis points to 2 per cent. But the Australian dollar rose even higher against the US dollar, following weaker economic data from the US.

Ironically, Odey can take comfort in the fact that at least one of the central bankers who he believes won't be able to "pull a rabbit out of a hat" or otherwise extricate the world from an inevitable downturn, thinks his position on AUDUSD is generally the right way to bet:

RBA governor Glenn Stevens predicted that the Australian dollar was likely to weaken in the medium term, as part of a wider trend.

 

“The Australian dollar has declined noticeably against a rising US dollar over the past year, although less so against a basket of currencies,” he said. “Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices.”

 

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Fri, 05/08/2015 - 13:43 | 6073429 AIIB
AIIB's picture

Mess with the best, die like the rest.

- Dade Murphy / Hackers

Fri, 05/08/2015 - 14:05 | 6073516 Killer the Buzzard
Killer the Buzzard's picture

Regular, or extra Crispin?

Fri, 05/08/2015 - 15:32 | 6073812 ilion
ilion's picture

Stunning video showing LIVE FX charts after release of today's NFP report: https://youtu.be/CnFIr9hruMs

Only real professional can trade this and make huge money in the process.

Fri, 05/08/2015 - 14:52 | 6073664 Model T
Model T's picture

He's a fool; it was obvious the dollar rally was long in the tooth and the currencies of the producing countries were going to rebound; how do these idiots become fund managers ? I'm currently making money on the Ruble, Long; and already took profit on the Canadian Dollar Long; all this was very obvious. what a nitwit.

Fri, 05/08/2015 - 13:46 | 6073442 Ted Baker
Ted Baker's picture

HE PROBABLY DOES HIS TRADES FROM LAS VEGAS

Fri, 05/08/2015 - 13:46 | 6073446 Dr. Engali
Dr. Engali's picture

It's a damn good thing he has that two to fall back on or he might be eating at McCrappies. At least his clients won't have to worry about paying that twenty..... they have that going for them.

Fri, 05/08/2015 - 13:52 | 6073460 Winston Churchill
Winston Churchill's picture

Very comforting when your arse is bleeding,I'm sure.

Fri, 05/08/2015 - 13:50 | 6073457 KnuckleDragger-X
KnuckleDragger-X's picture

Step up to the craps table, put your money down and throw the dice. Smart and rich is no advantage except on Wall St. and they play with loaded dice there.....

Fri, 05/08/2015 - 13:54 | 6073461 buzzsaw99
buzzsaw99's picture

well he still gets 2% of what's left of aum even if he doesn't get his twenty percent of the profits so don't cry for him.

Fri, 05/08/2015 - 13:56 | 6073474 Yen Cross
Yen Cross's picture

  Odey also got double whammied by the Bund blowup, and all the f/x hedges covering long $usd positions vs euro. I do think the $aud is going to start heading lower though.

  The daily chart (aud/usd)is certainly starting to look a bit extended. I covered my longs earlier.

Fri, 05/08/2015 - 14:01 | 6073484 AIIB
AIIB's picture

As far as I'm concerned, anybody who has joobuck confetti wealth at risk because they're too goddamned fucking blind to acknowledge that the jews control the entire system, (whether or not that was predicated on some ill conceived 'guilt' that was hoisted upon them which lured them in to a dumb ass desire to be POLITICALLY CORRECT), deserves to lose their whole wad.

 

For the past 300 years, it's all a fucking '3 CARD MONTY' game with jews on the other side of the table.

 

PLAY.AT.YOUR.OWN.RISK

 

https://www.youtube.com/watch?v=CNjarvV-bhA

Fri, 05/08/2015 - 14:20 | 6073556 DetectiveStern
DetectiveStern's picture

I was expecting a youtube doc on the Jews but instead I got black guys in lycra

Fri, 05/08/2015 - 14:21 | 6073563 AIIB
AIIB's picture

consider yourself fortunate

Fri, 05/08/2015 - 14:03 | 6073507 walküre
walküre's picture

he can still make it back if he bets against the Fed in September...

Fri, 05/08/2015 - 14:07 | 6073524 buzzsaw99
buzzsaw99's picture

not true. he was right about the bank of australia decision but it blew up in his face anyway.

Fri, 05/08/2015 - 14:14 | 6073539 walküre
walküre's picture

someone else sniffed him out or just bad juju?

Fri, 05/08/2015 - 14:19 | 6073552 buzzsaw99
buzzsaw99's picture

he is a race horse with blinders on. lots of moving parts to currency pairs.

Fri, 05/08/2015 - 14:28 | 6073573 walküre
walküre's picture

in the end it's all OPM

Fri, 05/08/2015 - 14:08 | 6073526 Fix It Again Timmy
Fix It Again Timmy's picture

My oh my, a hedge fund aneurysm that popped - WHO would have thunk it?...

Fri, 05/08/2015 - 14:19 | 6073551 Q-Q-Q
Q-Q-Q's picture

Call the Fed to plug it, wrap it up and shove it up the publics arse! Sorry, just realised it ain't City, the Squid or JPM!

Fri, 05/08/2015 - 14:51 | 6073662 Diablo
Diablo's picture

"Imminent Market Shock"

"This Shorting Opportunity Is As Great As 2007-2009"

"Equities Will Be Devastated"

 

LOL Yet another ZH fav gets his head handed to him. 

 

Fri, 05/08/2015 - 14:52 | 6073665 khakuda
khakuda's picture

This just demonstrates how tough it is to add value by trying to actively manage a portfolio in a centrally planned world, oustide of just front running government's next move.

Fri, 05/08/2015 - 15:13 | 6073739 sidiji
sidiji's picture

And how is he different from other Rogue Traders who have been imprisoned for their crimes?

Fri, 05/08/2015 - 16:18 | 6073970 Peter Pan
Peter Pan's picture

This is what a non-existent interest rate does to investors.....makes them take bigger risks and bigger losses.

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