It’s hard to be a bear these days.

Take Crispin Odey, whose main hedge fund has tumbled by two thirds in three years because of bets against the market. He blames his losses partly on banks that helped troubled companies to keep their own investments intact.

“As a bear, this market has been so painful,” the fund manager wrote in a letter to investors after his Odey European Inc. fund declined more than 20 percent last year in its third successive annual loss. “Every occasion in which a company gets caught between a squeeze in margin and an inability, because of competitive conditions, to pass on cost increases, banks have come to the rescue.

Odey has been a persistent critic of central banks pumping money into global economies and has warned of a developing bubble in stock markets. He’s now extending that criticism to what he calls the application of “fairy dust” by banks to ailing companies.

“Loan covenants have been waived, lease obligations relaxed fairy dust has been applied,” Odey wrote, citing Tullow Oil Plc’s rescheduling of loan repayments. Odey is among the short sellers of the London-based oil and gas producer.

Spokesmen for Odey Asset Management, which managed $5.4 billion at the end of October, and Tullow Oil declined to comment.


Source: Bloomberg

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