The oracle or just really lucky?

By predicting a world recession and oil prices plunging back to $60 a barrel, strategist Albert Edwards has cemented his reputation as one of the world’s brightest stars.

In a note issued on June 26, Edwards, of French bank Societe Generale, dared to make public his predictions of a recession at a time when, with the economy still in the ascendant, some might have thought him completely mad.

Edwards’s prediction that oil would drop to $60 – a benchmark they revisited for the first time in 17 months on Monday – came just weeks before prices hit a record of $147.50 in July.

He also said that the euro would fall back to a $1.35 exchange rate against the pound just as it was heading for a peak of $1.60. It now stands at $1.24.

London’s FTSE 100 index of leading shares would plunge to 3 000 points, he said, when it then stood at 5 600 points. On Monday, the FTSE was struggling at 3 665 points.

Edwards built his reputation on daring to be different in a world where “people like to hear good news because fund managers and investment banks do better when assets are going up,” he told AFP.

“If you predict a recession that doesn’t happen, people turn very angry.”

Edwards’ predictions come in notes – often brief, sparkily-written and with a splash of personal anecdote – which go out to investors and help them decide how to spread their holdings.