Billionaire hedge fund manager bags £100 million RBS profit
Controversial billionaire hedge fund manager John Paulson is estimated to have made over £100 million by betting against the share price of Royal Bank of Scotland in an operation known as "shorting". The controversial investment strategy has been pinpointed as one of the reasons for the collapse in the UK banking sector while others in the market suggest it is fundamentals alone which move the market.
Paulson is a man who made more than $3 billion by betting against the US housing market at a time when everybody was expecting the market to continue higher and higher. He has also "shorted" other UK banking stocks such as HBOS and Lloyds TSB but it is the £100 million profit from his Royal Bank of Scotland position which has caused most upset in the market. This is the exact investment strategy and investment outcome which appears to be praying heavily on the minds of regulators and the UK government.
Many observers now expect the government to impose an additional ban on short selling whether this is temporary or permanent. The regulators are concerned that rumours in the market are being used by short sellers to drive prices lower, causing panic amongst many investors. Whether this is correct or not remains to be seen but the volatility in the UK banking sector has not been assisted by hedge funds selling stock they do not own.
Share this..
Related stories
Office of Fair Trading looking at UK infrastructure companies
The Office of Fair Trading is set to embark on a groundbreaking exercise to create a list of all essential economic infrastructure in the UK and detail ownership and control of these assets. While this will not include items such as schools and hospitals it will include water companies, electric companies and other utility companies which are central to the UK business and consumer arena. Once...
Read MoreIs the fight for Woolworths over?
In a rather bizarre turn of events it has tonight been suggested that a number of substantial shareholders in Woolworths are looking at legal options if as expected the business is put into administration this evening. Investors are allegedly unhappy at the way the Woolworths board has handled the potential sale of the retail division which has not only put the overall business at risk but seen th...
Read MoreWilbur Ross pledges £500 million to Virgin Money investment
Wilbur Ross, the US billionaire, has today confirmed he is ready to invest an additional £500 million into the Virgin Money operation if Richard Branson decides to go ahead with a £2 billion offer for the Royal Bank of Scotland branch network. The official announcement is expected tomorrow as we approach the deadline for bids for the branch network which has been put up for sale at the bequest o...
Read More'Stamp duty must change'
Nearly three quarters of Britons want to see stamp duty reformed, according to GE Money Home Lending.With only one day to go until Chancellor Gordon Brown's eleventh budget speech, GE Money's research reveals that 71 per cent of people think stamp duty prices need to be changed to keep in line with soaring property inflation rates.Yet the nation seems divided as to what changes should actually be...
Read MoreSummertime garden theft blues cost £400
Opportunistic garden thieves stole an average of £400 of garden furniture from properties in the UK last year.With the sunny days of British summertime almost upon us, homeowners are being warned to protect their homes this year to prevent green-fingered thieved from spoiling their summer.According to Halifax, insurance claims for garden theft tripled between March and August last year, with item...
Read More