And Now, For Some Semblance Of Sanity, Here Is One Hour Of Hugh Hendry

Tyler Durden's picture

After today's ridiculous move in the market, which brings back memories of either August 2007, March 2008, the reaction after the Tarp vote (the successful one), August 2011, when the market gyrated by 400 points on a daily basis, and many more bear market rallies, we hope to restores some semblance of normalcy by presenting the following series of clips all from Hugh Hendry speechs at the LSE's Alternative Investments Conference earlier this year. Must watch, because when everyone loses their mind, listening to some common sense is the best remedy.

Part 1, in which he discusses the generational shifts in attitudes towards leverage, concluding "Really I should be attending the Young Farmers Society as opposed to the LSE"

Part 2, in which he discusses his misgivings for the enthusiasm towards China, noting that "if you're spending money without the intent of any economic return, then you're spending money poorly". This is particularly notable after earlier today China explicitly warned that it does not want to be seen as the dumb money. Sorry China, if you look around the table and you don't see the dumb money, you are it:

Part 3, in which he denotes his views on currencies: "I think the Yen could appreciate greatly, I also think the dollar could appreciate greatly... you actually create a shortage of yen and dollars in an environment where asset prices are falling... that's all a precursor to then wanting to buy oneTouch Nikkei calls at 40'000, 50'000, 60'000..."

Part 4, in which he busts the bubble of anyone who claims they can predict anything: 'We spend so much time, resources and money trying to see the future - really we're spending money trying to delude ourself. You have no chance of seeing the future, it's better to recognise that'

and finally Part 5, in which he does an amusing word association game:

h/t GreshamsLaw

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speconomist's picture

Finally! Couldn't attent the conference, so glad it's on Youtube!!!


Panic recommended to all of you!

DormRoom's picture

Hugh Hendry should be worried.  He owned a lot of European Soverign CDS in his portfolio

Ahmeexnal's picture

A couple days ago Merkel threatened europe with war if her europroject was not bailed out.
When will the enlightened democracies of europe learn that appeasement does not work with the dark lord of Mordor?
J.R.R. Tolkien warned us about germany in his epic Lord of the Rings. Sadly, few readers are able to understand his true message and can't get past the elves and hobbits.

knukles's picture

He has elves and hobbits in the story?  I gotta think deeper...

anynonmous's picture

no knuckles, there is  no need to think deeper

you might injure yourself

franzpick's picture

On the contrary: you may injure yourself by not thinking deeper about today's upward explosion in equities, PMs and materials (see XLB for one example), which together may be viewing the 50% greek haircut as the beginning of the end of wasteful government taxing, borrowing and non-productive spending.

My screens say today's upside markets may be abruptly discounting the potential employment and earnings gains that may result from getting government out of the way of a business recovery.

Today's euro bad-greek-debt haircut principles may soon be seen to apply to worldwide legacy debt hangovers in piigs, u.s. and all countries whose bankers and administrators willingly fell victim to decades of unsustainable credit-binge debt-growth economics.

DJIA, SPX and NAZ stock indices heading to 15,000, 1500 and 3000, and metals recovering to AU $2000, AG $50 and Dr. COPPER 4.50, and higher, will confirm the upcoming power of a business recovery freed from decades old tax-borrow-spend government regulatory interference.

Anticipating such a business recovery, in the face of crushing legacy debt and failing top and bottom line business revenues, is certainly a stretch, but discounting is what equity markets do best, if not wisely, but too well.

Oh regional Indian's picture

I think Hopium is the new high. In a few months, Hohohopium.

The downer is called NoHopium.


An Indian Tries the Blues

The Big Ching-aso's picture

Cut back some on the peyote dosage.   Either that or just take a break entirely.

Non-Zero's picture


I gave you a +1 for this, but you need to make it clearer that the money to prop up the stock market, PMs and commodities will come from bonds, otherwise people will not understand why it's happening.

e.g. People lose faith in governments, so they shift money out of bonds and into private assets (especially gold, silver and the stock market).

If the governments can arbitrarily cut your bond value in half, and you can't insure it with CDS, you're going to want to put it somewhere they can't touch it.

gangland's picture


Neoliberalism has failed even to come close to, let alone achieve, the
growth rates of the golden age of Keynesianism in the 1960s (Harvey 2006).

gangland's picture


"which raises
a serious question about how it has maintained legitimacy in the
face of its own failed raison d’être – to ensure wealth for all through
market efficiency.


Thus it is pertinent to consider the core contradiction
underpinning the seeming collapse of neoliberalism:


extent to which the current crisis is tied to the very foundations on
which neoliberalism was built,


namely the expansion of finance
capital and the associated housing and stock market booms of
the 1990s and 2000s."



gangland's picture


"There is a terrible irony in the fact that neoliberal policies of
privatization, marketization and liberalization over the last 30+

have produced proceeds with a monetary value (€1.3 trillion)
that is only twice the recent bank bail-outs by the US and European
governments (see Hall 2008: 6)."

gangland's picture


"Who then benefited from this economic order?

We can
point fingers at the bankers, as government have found it politically
expedient to do, but


we have also to acknowledge that the
financialization of the global economy has gone hand in hand with
property booms that have effectively enrolled citizens in the
expansion of neoliberalism –

a windfall largely limited to citizens in
the Global North, it must be stressed.

For example, Matthew
Watson (2008) argues that as individuals have been incorporated
into the British housing market, which was (and still is) dependent
upon ever-increasing house prices, they have been remade politically
as ‘monetary conservatives’, (TEA PARTY) more concerned with inflation than
welfare spending. More generally, Stuart Hall (2003: 10) argues that
‘a new neoliberal common-sense’ has ‘colonized’ civil society."

gangland's picture

"What is evident in this mess is that the conceit at the heart of
neoliberal thought has been exposed.

The very idea that markets are
self-organizing, efficient and liberating is no longer credible, but
illustrates the extent to which neoliberalism

– as shorthand for
market-like rule –

is an economic, political and ideological project
pursued by certain groups (such as governments and corporations)

to construct a reality that is perceived to be founded in the inherent
properties of economic markets.

This circular reasoning has
replaced any sense of what we ought to do to achieve democratic
goals and ambitions with a logic built on the perception of the
inherently good and essential qualities of markets.

Thus morality
and ethics have been turned right way up in response to the ‘natural
law’ of economic exchange in which the rich can buy more freedom
than the poor."

akak's picture

I have to disagree with you.

akak's picture

You've really hit the nail on the head there Akak!

akak's picture

We concur as well.

akak's picture

I think that settles the issue.

Calmyourself's picture

I do not always agree with you but no one can doubt your entertainment value.  I will drink beer with you and buy! 

akak's picture

Thanks for the thumbs-up CY!

I does what I cans.

Josh Randall's picture

Blood in the streets in the town of New Haven

NotApplicable's picture

That's just how he rolls.

rocker's picture

 Speaking of rolling as the article says, 'After today's ridiculous move in the market' one can surely say it was to burn shorts. Still 100% Cash.

 Patience is a good thing in crooked markets. About 15 years ago I took a free 2 day class about markets and how stocks work and why.

Actually they wanted to sell me their stuff. Did not buy. But they did offer some great fundamentals that are almost certain.

They taught stuff like principals, one being that the market will cause as much pain and take as much money as it can.

Another thing they taught was how to not be caught in a market trap. It focused on "Gaps".  They said that almost all the time the market

will return to the level where a "Gap" is and it is a good way to protect yourself and use them for opportunities.

Well today, I ask, did the market burn any shorts and cause any pain?  And in the ramp up, how many stocks were gapped up?

That is why, as tempting as it was I bought shit from Goldman's HFT machines ramp job. Almost every stock that I would consider buying was

gapped up.  To me, from that class years ago, this market will cover all those gaps.

Heed the warning that the market on a day like this is a fools rally if your sucked in to the sucking sound of the Squid, Goldman Sachs.

morkov's picture

on video 2 :   

real estate is not THE ONE market return on China's books

Börjesson's picture

"As for any inner meaning or 'message', it has in the intention of the author none. It is neither allegorical nor topical. [...] The real war does not resemble the legendary war in its process or its conclusion. If it had inspired or directed the development of the legend, then certainly the Ring would have been seized and used against Sauron; he would not have been annihilated but enslaved, and Barad-dûr would not have been destroyed but occupied. Saruman, failing to get possession of the Ring, would in the confusion and treacheries of the time have found in Mordor the missing links in his own researches into Ring-lore, and before long he would have made a Great Ring of his own with which to challenge the self-styled Ruler of Middle-earth. In that conflict both sides would have held hobbits in hatred and contempt: they would not long have survived even as slaves."

- J.R.R. Tolkien, Foreword to The Lord of the Rings, second edition

Bring the Gold's picture

I had this precise passage in mind when I read that silly tripe from the caveman above. What's funny is I've seen Ax go after both Jews and the Germans. Lol. Tolkein's forward is so spot on it's amazing. Hobbit genocide/ (debt) enslavement would have definitely been discussed at the council of Elrond lol.

Crisismode's picture

That is an amazing capture of information from J.R.R.T.



spartan117's picture

But the germans build such cool cars. 

knukles's picture

Talking about allegories, I once bought a BMW which had tires made in Israel. 

Pladizow's picture

Did you hear about the new Israeli tires called Firestein's?

They stop on a dime and pick it up!


What's the diffrence between a cactus and a BMW?

A cactus has its pricks on the outside!

Rome is burining's picture

The Jews have two things going for them: they are thrifty and there's Genesis 12. Yes, I have some Cohen a few generations back!

LasVegasDave's picture

why cant they keep Jews in jail?

They eat lox

And for all the latent and patent anti-semites on the board, feel free to substitute "Wall Street Bankers"  for "Jews"

spankfish's picture

I want to get invaded by big breasted beer garden maidens.

Freddie's picture

Amazing that idiots junked you.