Wednesday, September 28, 2011

The Mystery of Where Hugh Hendry Went is Solved

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The surly hedge fund manager Hugh Hendry used to be one of our favorite mavens to quote.  He used to make media appearances often but I literally sent a tweet out last week asking where he has disappeared to.  Therefore, I was heartened to see a story this morning on Business Insider with Hendry being noted.  However at the end of the story it says Hendry, who founded Eclectica, is no longer the CEO but now the CIO - and the CEO banned him from media appearances?(Hugh makes a joke about that in the beginning of the interview)  Hmmm...

Whatever the case here are some of his latest thoughts - of course take in mind his views are from the standpoint of an investor who probably has some bets against Europe.  But he speaks the truth about how these bailouts are all about bailing out the creditors who made the stupid loans, and it punishes the people.  Unfortunately he is sharing the roundtable with 2 very boring people.  (source to original interview/debate here - 30 minutes)

  • Hedge fund manager Hugh Hendry, whose prediction of the crisis in the Eurozone was spot on, says we're at a rare moment in economic history.  "The problem is greater than the ability of the politicians to respond," he says in a radio debate on BBC's Bottom Line.  "There is no policy prescription that they can offer that will redeem the situation. The redemption will come through the citizens of Greece and elsewhere throwing the politicians out and rejecting the European ideal."
  • Hendry's view on what the solution should be (a Greek default that doesn't protect the creditors) is quite different than Evan Davis' — the BBC host — and Brent Hobermann's of mydeco.com, another guest on the show.
  • Hendry has other ideas about a solution. He says, "Bankruptcy is a solution [because] creditors who extended that debt [to Greece] — that was a folly. All this firefighting is trying to protect the creditors, as opposed to the oppressed person."
  • Hendry's view is that Greece should default and leave the Euro. "Greece needs a real exchange rate," he says. "If you go on a drachma and [a beer in Greece is] .50p, there's a stimulus that's not open to them today [cheaper money]."
  • Hendry says the UK is in depression - not recession - and it will take years to get back to where we were in 2006 and 2007. It's been 5 years since the financial crisis, and it might take another.
  • That Hendry's opinion differs from that of economists is not surprising. Economists and politicians will point the finger frequently at hedge fund managers and "speculators" now. Hendry believes their anger is rooted in the inability of a policy prescription to solve the Eurozone crisis.
[Jan 11, 2011: Bloomberg Markets Magazine Profiles Hugh Hendry]
[Mar 4, 2010: Hugh Hendry Continues to Doubt China]
[Oct 30, 2009: High Hendry Resurfaces on CNBC  October 2009]
[Jun 18, 2009: Hugh Hendry Eclectica Fund Letter to Investors]
[Jul 8, 2009: FT.com - Hugh Hendry-Thon]
[Apr 28, 2009: The Latest Hugh Hendry]
[Apr 16, 2009: Hendry, Citiwire Interview]
[Mar 20, 2009: Hugh Hendry of Eclectica Asset Management is Wickedly Good]

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