Hedge fund manager warns US housing crisis 'not over'

Alistair Lumsden, the London hedge fund manager who foresaw the US sub-prime mortgage crash that led to the credit crunch, has warned the US housing crisis begun in 2007 is far from over.

He said the large inventory of US homes expected to be offloaded by distressed sellers, coupled with constrained financing from US banks and agency lenders, means there are more problems to come in the housing market. The manager has predicted US home prices could fall up to a further 10% in 2012, denting confidence among American homeowners. Along with veterans such as John Paulson, Lumsden, of $11bn asset manager CQS, was among the few portfolio managers to predict and correctly bet on the US sub-prime crisis, delivering 179% through his $1.5bn ABS fund in the two years to June 2009...