Posts Tagged ‘Hugh Hendry’

Hugh Hendry On The “Near Certainty” Of European Interest Rate Rises

Courtesy of Zero Hedge

Europe risks getting it wrong again on rate rises

From European Central Bank, posted first in the FT

The euro project has not gone according to plan. It reminds me of the story of the James Bond character Q, based on the British intelligence officer Charles Fraser-Smith. It was he who invented a compass for spies hidden in a button that unscrewed clockwise. The contraption was based on the simple yet brilliant theory that the unswerving logic of the German mind would never guess that something might unscrew the wrong way. This is really what happened with the euro. New member states were supposed to take lower German interest rates and invest their resources wisely to improve and deepen their productive capacity. Instead, they used the advantage to finance speculative asset bubbles. The peripheral nations of Europe turned the wrong way. The Germans are unhappy.

But, desperate to cling to monetary union, the other European sovereigns have opted to default on their spending promises to voters rather than impose a haircut on their financial creditors. In the 1920s the pay-off structure had been very different. The first world war took an intolerable toll on the typical household both in terms of the loss of life and financial well-being; everyone had become poorer. Accordingly, there was little willingness on the part of the ruling political class to force austerity measures to redress the fiscal imbalances. The people had suffered long enough. Consequently, there was much procrastination and fiscal deficits persisted way beyond the end of the war, making capital markets reluctant to accept the waning security of government paper and forcing the sovereign to rely on the central bank’s printing press.

This time around, however, the political class has concluded that the Greeks (especially the Greeks!) and the other peripheral states have done so well off the back of the euro project that it is their turn to shoulder the burden. They calculate that the social pain would be less severe than the financial costs of a debt default and/or a euro exit. Of course, this is to neglect the financial consequences of bailing out the financial sector in 2008 and its ensuing impact on the ordinary household. Can an analogy be drawn between the first world…
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Hugh Hendry Interview With King World News: “If Inflation Is A Monetary Phenomenon, Hyperinflation Is A Political Phenomenon”

Hugh Hendry Interview With King World News: "If Inflation Is A Monetary Phenomenon, Hyperinflation Is A Political Phenomenon"

Courtesy of Tyler Durden

hugh hendryIn which we learn that that outspoken iconoclast has now taken on a $2 billion short position in Japanese credit, although presumably not cash-based as Ecclectica is well under that in AUM. For those who wish to recreate this position synthetically, we refer you to Dylan Grice’s ATM swaption in the 10Y10Y forward which is the cheapest way to follow in Hugh’s footsteps, and, ahem, may we remind you of Takefuji’s recent bankruptcy…).

His bet is in essence a gamble against the "China will never fail" bandwagon: "I am just intrigued as to the optionality, as to the profits that could be made, should that revert. And because it’s deemed to be impossible, the trade is actually asymmetric. By golly if I am right, I can make a lot of money." Another topic is the already much discussed malinvestment in China, which was the centerpiece of the argument between Hendry and Faber from some time ago (link for clip). But back to what actual things Hugh is doing, he gives the following specifics: "I am shorting 10 year industrial corporate debt with 1% yield. Should this ricochet, which began in America, should the west be grappling with fears of recession, it goes to Asia, it goes to China, and I do not believe they have the vitality and consumption to pull the global economy out." And just in case there is any doubt how Hendry views the endgame, here it is: "At these immense levels of yen strength, Japan is bankrupt. And when it’s bankrupt it has given up hope, and there is huge political legitimacy to then do quantitative easing, which leads to the debauchery of the system." In other words: the nuclear response of monetary debasement is certainly coming. We won’t spoil what Hendry says on gold (suffice to add the following quote: "We will see a joint meltup in US Treasrys and gold") – for his insights on where the metal will go, for a shoutout to all Zero Hedge Hugh Hendry fans, and for much more, listen to the whole interview.

Full King World News interview.

And for those who may have missed it the first time around, here is arguably the most succinct and comprehensive interview with…
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Hugh Hendry interview on the BBC

Hugh Hendry interview on the BBC

Courtesy of Edward Harrison of Credit Writedowns

BBC HARDtalk interviewed hedge fund manager Hugh Hendry, CIO & CEO of Eclectica Asset Management, this past Tuesday night. The videos are below.

 

 

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Hugh Hendry Admits: “I’m Losing Money This Month! It’s A Very Uncomfortable Process!”

Hugh Hendry Admits: "I’m Losing Money This Month! It’s A Very Uncomfortable Process!"

Courtesy of Courtney Comstock at The Business Insider 

Hugh HendryHugh Hendry admitted he’s down this month while talking to BBC Hard Talk on Tuesday.

The often unhinged hedge fund manager was subdued until his interviewer began asking him about regulation and risk-taking in the hedge fund industry.

Then he got pretty riled up and spilled that he’s losing money this month, and how much it hurts.

It all started when the interviewer brought up financial regaultion.

"The financial industry is the most regulated sector in the economy," Hendry says.

Then the interviewer suggested that hedge funds, like Hendry’s are less regulated and therefore riskier than banks.

To which Hendry replied, "The most effective form of regulation is that if you mess up, you fail. And that’s the regulation that I’m subject to."

(Watch how the interview proceeds. Our summaries of the interviewer’s questions are in italics.)

Isn’t that very risky? asks the interviewer.

"I do not take extreme risk. Do you think for one moment [rich familes that have saved their money for generations] would give me their money to take extreme risks with it?" (circa 2:10)

Yes, I do think they would. I think that’s the premise that the entire hedge fund industry is based on.

"Extreme risk means that there is a very high probability of losing all of that capital."

Well, that’s what has happened to many hedge funds recently.

(This is when Hendry starts getting upset. The suggestion of his clients’ money being at risk in his hedge fund.)

"I spend half of my time allaying their fears – being transparent, addressing their issues - Where could I lose money? How much could I lose?" (circa 2:54)

(Then we find out why he’s really upset.)

"I’m losing money this month – it’s a very uncomfortable process! My phone never stops!" (circa 2:58) 

Hendry quickly went from the best macro fund (up over 13% YTD as of August) to losing money.

Watch the interview.


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Hedge Funds On The Defensive As Hugh Hendry Sees 80% Reduction In Size Of Industry

Hedge Funds On The Defensive As Hugh Hendry Sees 80% Reduction In Size Of Industry

Courtesy of Tyler Durden

It is no longer fun being a hedge fund manager – first, up until the recent POMO-based rally in stocks, HFs were down for the year, and what is far worse, they were underperforming the broader market – a death sentence for pretty much every hedge fund, as this is proof a fund can not extract alpha and thus has no reason to collect 2 and 20. While the recent ramp in the market is welcome by all bulls, the question remains just how leveraged into the latest beta rally hedge funds have been. If after the nearly 10% rise in the past 2 weeks any individual HFs are still underperforming the market, it is a near certain "lights out."

To everyone else: congratulations – you just bought yourself another three months of breathing room. Better hope the Fed makes good on its QE promises one day soon. In the meantime, Bloomberg Matthew Lynn and Ecclectica’s Hugh Hendry both confirm that in these days of instantaneous liquidity demands, and cheap strategy replicators in the form of ETFs which provide the same beta capture as hedge funds, at a fraction of the price, it is only going to get worse and worse for the once high flying community. In fact, Hugh Hendry goes as far as suggesting that 10 years from now 80% of all hedge funds will be gone. Our personal view is that the target will be reached in a far shorter time frame.

On one hand, Matthew Lynn shows the uphill climb that defenders of the hedge fund industry have to pass in recent days. "An industry that doesn’t know how to defend itself, and has forgotten how to justify its existence, is in crisis. Hedge funds are now in that position." Hilariously, Lynn shows that hedge funds uses that good old staple used by HFTs to defend their own piracy ways and means: providing liquidity.

On both sides of the Atlantic, hedge funds have been busy trying to hold their own against the tide of fresh regulations sweeping through capital markets.

The Washington-based Managed Funds Association, the U.S. hedge-fund industry’s biggest trade group, has been campaigning against proposed curbs on high-frequency trading. That would, it says, reduce liquidity


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Hugh Hendry Talks The Geopolitics Of Potash, Grains And Other Scarcities On BBC Newsnight

Hugh Hendry Talks The Geopolitics Of Potash, Grains And Other Scarcities On BBC Newsnight

Courtesy of Tyler Durden at Zero Hedge 

With concerns about surging food prices recently inflamed courtesy of the series of fires in Russia and the halt of grains exports out of the country, several heavy hitters have come out recently to discuss their views. One among them is the man with the best YTD performing macro hedge fund according to Bloomberg, Hugh Hendry, who appeared on BBC’s ever-informative Newsnight to discuss potash, food prices, and other scarce resources.

On whether the world is facing a massive food shortage, Hugh’s conclusion is that as long as Asia does not have a recession, things are ok, otherwise "in due course there would be great pressure on the food supply." As for Potash, Hendry says that China and Canada "hate each other [in the space]. There has been a profound game of roulette – Chinese consumption of Potash is 35% less than used in Western agriculture. At these prices, the Chinese haven’t been consuming in the manner in that they should and they risk an absolute collapse in their yields… China does have a vulnerability in feeding itself which we don’t have because we embrace potash at productive levels."

As for geopolitics, the topic arises of what African quid pro quo demands for having the most arable land should be and sending products over to China. The observation is that Africa’s bargaining position is negligible (those Goldman offices in Ethiopia, protecting the interests of the locals, are oddly missing).

All this and more in the below clip: 


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Japan Redux: A Video Case Study Of The Upcoming U.S. Lost Decade

Interesting video--argues for eventual hyperinflation in the US. – Ilene

Japan Redux: A Video Case Study Of The Upcoming U.S. Lost Decade

Courtesy of Tyler Durden

Whether one believes in inflation or deflation, one thing is certain: in many ways the current US experience finds numerous parallels to what has been happening in Japan for not one but two decades. While major economic, sociological and financial differences do exist, the key issue remains each respective central bank’s failed attempts to reflate its economy. While long a mainstay of Japan, if the first failed version of our own QE, which pumped $1.7 trillion of new liquidity into the system, is any indication, future comparable efforts by our own Fed will be met with the same outcome (and hopefully with the same political result: the half life of an average Japanese prime minister is 6 months – if only our career politicos knew their tenure in office could be capped at half a year…).

There is of course the "tipping point" optionality discussed earlier by Ambrose Evans-Pritchard, when comparing the hyperinflationary timeline during the Weimar republic, which noted that it took just a few months for the economy to slide from a period of price stability to outright hyperinflation. Either way, for an ironic look at the Japanese deflation scenario, targeted more at novices although everyone will likely learning something from it, we present the following informative clip from, ironically, the National Inflation Association, which asks whether Japan is a blueprint for America’s imminent lost decade(s). 


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Hugh Hendry Is So Intimidating, Nobody Will Publicly Disagree With Him Anymore

Hugh Hendry Is So Intimidating, Nobody Will Publicly Disagree With Him Anymore

Hugh Hendry

Courtesy of Joe Weisenthal at Clusterstock 

It’s well known that uber-bearish hedge fund manager Hugh Hendry is a gifted, silver-tongued orator who can make mince meat out of his debating rivals.

Apparently nobody wants to disagree with him publicly, or even privately anymore.

The Eclictica manager is profiled in tomorrow’s NYT about how he’s a brilliant contrarian, though he doesn’t come off as THAT contrarian. For example, he’s bearish on China and Obama.

This part is amusing, however:

Mr. Hendry’s outspokenness has won him both fans and detractors.

Marc Faber, the money manager known as Doctor Doom for his bearish views, calls Mr. Hendry “a deep thinker.”

“He has strong views and expresses them, not to get publicity but because he has a great understanding of the markets,” Mr. Faber says.

Some London investors are less charitable. Two declined to comment on Mr. Hendry, saying they did not want to “get into a fight” with him.

So… we know that some in London don’t like him, but two won’t comment because they don’t want a fight. Guess that means no more Hendry debates.

See also:

Hugh Hendry: Soros Is A Socialist, The Euro Is Doomed And Everyone’s Shorting The Wrong Continent

Hugh Hendry Busts Out Tolstoy, TS Eliot, And Buchan To Win An Argument At Hedge Fund Conference

Hugh Hendry’s Slams Economist Jeffrey Sachs: I Would Recommend You Stop Going Skiing And Panic


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Hugh Hendry: “I Want To Bring George Soros Down”

Hugh Hendry: "I Want To Bring George Soros Down"

Courtesy of Tyler Durden at Zero Hedge

In this interview by Bloomberg’s Erik Shatzker (we have added the full interview, not the abbreviated version), Hugh Hendry tries hard not to dance on the euro’s grave… and fails. He compares the European currency to the gold standard in the 1920′s: "We are now seeing a conflict between domestic stability, prosperity and the need for external balance, and that typically rings the bell on such a system." He further discusses George Soros’ recent media appearances and his recent Op-Ed in which as was noted, the Hungarian is very concerned about the eurozone courtesy of Germany’s non-Keynesian actions. In tried and true fashion, Hendry doesn’t mince his words: "George is someone we all aspire to match his brilliance. But remember the richest people in the planet become socialists. Socialism is a great thing for George. I want to bring George down. I want George’s reputation. But George is now embracing socialism. Socialism is where you build a moat around the castle. I am spending all of my time trying to decide where I’m gonna live, because taxes in this country are so high, and less of my time trying to work out how do I surpass Soros and his reputation." And his take home message: "The noose is getting tighter and tighter… not in Europe, but in Asia."


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Hugh Hendry: Eclectica Fund Management Commentary

Hugh Hendry: Eclectica Fund Management Commentary, May 2010

Courtesy of Edward Harrison at Credit Writedowns

The PDF of Hugh Hendry’s letter to investors is embedded below. Enjoy.

Eclectica Monthly Letter 2010 05


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Phil's Favorites

4 key issues to watch as world leaders prepare for the Glasgow climate summit

 

4 key issues to watch as world leaders prepare for the Glasgow climate summit

A mural near the site of COP26, the 26th Conference of Parties to the U.N. Framework Convention on Climate Change. Jeff J Mitchell/Getty Images

Courtesy of Rachel Kyte, Tufts University

Glasgow sits proudly on the banks of the river Clyde, once the heart of Scotland’s industrial glory and now a launchpad for its green energy transition. It’s a fitting host for the ...



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Zero Hedge

Democrats Stalking $5 Trillion In Billionaire Wealth For Tax Extraction

Courtesy of ZeroHedge View original post here.

Congressional Democrats are setting their sites on US billionaires - and the roughly $5 trillion in wealth held by them, according to Bloomberg.

In the last five years, this exclusive group of more than 800 billionaires tracked by the Bloomberg Billionaires Index has more than doubled its collective net worth. And according to Democrats, these unrealized gains should be ripe for the picking.

Under the rules...



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Trump wants the National Archives to keep his papers away from investigators - post-Watergate laws and executive orders may not let him

 

Trump wants the National Archives to keep his papers away from investigators – post-Watergate laws and executive orders may not let him

Nixon resigned after tapes he had fought making public incriminated him in the Watergate coverup. Bettmann/Getty

Courtesy of Shannon Bow O'Brien, The University of Texas at Austin College of Liberal Arts

The National Archives is the United States’ memory, a repository of artifacts that includes everything from half-fo...



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Biotech/COVID-19

An infectious disease expert explains new federal rules on 'mix-and-match' vaccine booster shots

 

An infectious disease expert explains new federal rules on ‘mix-and-match’ vaccine booster shots

Discuss with your doctor whether or not you need a booster – and if so, which vaccine will work best for you. Justin Sullivan/Getty Images News via Getty Images

Courtesy of Glenn J. Rapsinski, University of Pittsburgh Health Sciences

Many Americans now have the green light to get a COVID-19 vaccine booster – and the flexibility to receive a different brand than the ori...



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Digital Currencies

Bitcoin: why its value has rocketed once again

 

Bitcoin: why its value has rocketed once again

Shutterstock/rzoze19

Courtesy of Andrew Urquhart, University of Reading

Bitcoin’s journey into mainstream finance has reached another major milestone – and another record price. The cryptocurrency was trading at US$66,975 (£48,456) following the launch of an exchange traded fund (ETF) in the US w...



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Chart School

Price and Volume Swing Analysis on Bitcoin and Silver

Courtesy of Read the Ticker

Many take guidance from news, pundits or advisors. Well sometimes the swings of price and volume are a better measure of what happens next.

The big boys do not accumulate or distribute in single 1 second trade, they build positions over weeks, months and years. They use price swings in the market to build or reduce positions, and you can see their intent by studying swings of price and volume and applying Tim Ord logic as written in his book called 'The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks'.

Tim Ord is a follower of Richard Wyckoff logic, his book has added to the studies of Richard Wyckoff, Richard Ney and Bob Evans.

Richard Wyckoff after years of...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

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Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

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  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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