Speaking to a table of 15 IFAs and wealth mangers from the Yorkshire Investment Club, Odey said given how indiscriminately bearish people had been over the past two months if they were to buy equties anywhere it should be in the US.
Recent purchases for him have included Wells Fargo, Citibank and JPMorgan, which he thinks look ludicrously cheap.
Europe, he explained, is having its Lehmans moment, but he said the Anglo-Saxon world was in a slightly different state.
Since the 2008 global financial crisis banks in the US and UK have improved their balance sheets. They have chiefly done this through calling in corporate debt at maturity and witholding further lending.
In comparison, European countries have continued to treat banking as a utility service, which means they make little profit and take little risk.
Odey said the eurozone debt crisis would continue until underlying problems in German banks were dealt with.
He explained they have huge holes on their balance sheets from lending abroad and do not have the equity to pay them off because of their lack of risk taking and subsequent profit making.
"In the UK they [banks] make money back off borrowers and from those surplus profits they can pay off their mistakes," Odey said.
This means before the rest of Europe can let Greece go it needs to write off the issues its banks have, which will require recapitalisation.
US trumps UK
Of the nations either side of the Atlantic, Odey thinks the US looks more attractive than because house prices have rebalanced and so the affordibility of buying against renting is in a much better position.
In addition, loan/deposit ratios in US banks are at 70-75% of their balance sheets.
Odey sees this as a sign the US is at the beginning of an expansionary cycle and points out that US share prices have fallen on the back of worries about the general banking environment, rather than the domestic sector.
An additional concern he holds about the UK market is the probability of a high inflationary environment in the next two or three years.
The rationale behind his expectation is the popularity of gilts at the moment despite their negative real yield.
"I can see at some point in the future there will be nobody buying these bonds at which point the government will monetise, and the day it monetises you will go from having inflation at the level it is today to I do not know what."
He said he cannot see the government significantly cutting borrowing while it is so cheap for it to carry on doing so, but added the gilt bubble would have to burst at some stage.
When that happens and inflation follows, he admitted index-linked bonds could do well, but said the government would do its utmost to make sure returns were not be what they should be, by changing the benchmark measure of inflation or other rules.
He said of making the plunge into equities: "The problem we have in times like this is how easy is it for you to be different, part of that is how brave do you feel that what you are looking at can change? If you think you are in a world where nothing will change for 30 years then bonds yielding 2% could be a good thing.
"Banks lead the way. They will tell you if it’s a bull or bear market because it’s all about credit. If there’s no credit then there’s no expansion."
