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Posted by on May 27, 2010 in Economy, Markets, TG Roundup

“I Would Recommend You Panic” [updated]

Hugh Hendry is a hedge fund manager from UK. He is one of those “evil short-sellers” that the establishment (read politicians and the banks) love to hate. However, but for the short-sellers, the truth would not have come out in this increasingly manipulated and intervened market. Hendry was among the few who saw problems in Iceland, Ireland and UK banking system and profited heavily from it in 2008. Now he has his eyes on China and the viability of (or lack there of ) European banking system.

Hendry is very sharp and amusing in his antics. In this BBC interview, Hendry really sticks it to Jeffrey Sachs and the academic ilk and the ideologues who are out of touch with reality (OK, like me).

Let’s purge this system of its rottenness. Let’s take on a recession. It’s going to be tough, people are gonna lose their jobs. They are going to lose their jobs anyway. We can spread this over 20 years, or we can get rid of it over 3 years

Zero Hedge has a nice post-script about the “tenured academic stupidity” of Jeffrey Sachs.

We apologize in advance for harping back on this issue, but it is pretty damn hilarious. In the BBC Newsnight interview with Hendry, Tett and Sachs, the esteemed Columbia professor, at 4:50 into the clip, asks “How long has this Greek question been on the table. Ablout 10 weeks maybe?” A rather violent explosion from Sachs follows when Hendry calls him out on his tenured stupidity. All this was discussed yesterday. However, we wanted to provide a response to the Ivy League professor, as he did pose a legitimate question. In the following FT interview from January 2009, Hugh Hendry discussed the future of the eurozone and the PIIGS, and at 24 seconds into it, he provides the response Sachs is seeking: “I fear [the collapse of the Eurozone] is becoming more likely.” He follows “If we saw parity with the euro, my goodness, that would be deemed to be unthinkable.” And concludes, “There is a shortage of dollars. People think I’m crazy – they are printing billions, trillions of dollars. But keep in mind America has $50 trillion of debt outstanding. And that was fine because they thought it had $50 trillion of assets. And what we are discovering is these asset prices deflate – it’s vaporization…” Dear Mr. Sachs – the very person you were sitting across the table from foresaw everything to the dot, just as it would happen 16 months later, even as you were calling up old buddies to get that Teacher of the Year award, or get that extra fellowship (in demagoguery?). Our advice to you is do what your parents did, get (an honest) job sire…. which will never happen – pouring the Kool Aid is easy and pays well.

So here is our second bit of advice: watch all Hendry appearances, and listen to what he says. He will always end up being right, and you will always be wrong, since you defend a broken system which is fated for implosion. And just as Hendry sees deflation first, then hyperinflation (and watch this clip for some more brilliant insight), so it shall be. And for some reason people like Sachs will once again be invited to round-tables, in which they will groundlessly claim that nobody foresaw any of ensuing Keynesian collapse… So now that we have answered your question, we have one of our own – how does Columbia allow this level of mediocrity to be publicized on national television?

[Hugh Hendry a year ago]