ECLECTICA FUND APRIL 2012 PDF

Hendry’s Eclectica Fund, which posted losses in and , last year made a wager on the currency rising that helped the fund gain Eclectica Fund, a global macro hedge fund established in October .. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec Year. Eclectica Asset Management LLP is authorised and regulated by the Financial Conduct Authority / Private & Confidential. 2 Hugh Hendry, April

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This is why China’s mad dash for commodities and its investment splurge this year is so worrying.

The surprise might concern the role that rising leverage has played in boosting GDP and in anchoring investors’ expectations to an unrealistic level of nominal GDP. Furthermore, their households have lifted their government bond weightings five-fold over the last ten years. This page was last edited on 11 Novemberat InvestorsInsight may or may not have investments in any funds, programs or companies cited above.

Heady stuff, but not without precedent: Austerity beckons for the clergymen; heaven will have to pay their stipend. I keep hearing that a dollar devaluation would help matters. But the Economy is Growing? Investment recommendations may change and readers are urged to check with their investment counselors before making any investment decisions.

No sex, no drugs, eclecgica wine, no woman, no fun, no sin, no wonder it’s dark Everyone around me is a total stranger. But weaker economic growth? It is as though the rap artist 50 Cent has taken over the advisory board. So to elaborate further, our chances of financial success are greatest under conditions where investors believe government spending will succeed but in reality it fails.

Now remember I have been describing a positive macro scenario: Instead, they required the willingness of their trade partners to run trade deficits. In eclectic words, quantitative easing, masquerading as a cheap but fixed currency regime, has succeeded where Japan’s orthodox version has failed.

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Controlling the psyche of this generation of investor is the indelible mark of the falling dollar and the associated fear of inflation. My previous investment letter attempted to explain the subtleties of the Triffen dilemma and the dollar’s pre-eminent role in regenerating modern day economies.

This resulted in the dollar’s huge devaluation versus gold in the s. Lee, reflected on this as he sat in the fknd offices of Norsk Hydro last week watching the snow fall outside. I have quoted Don Coxe’s definition of a bull market before and I intend to do so again. In this scenario, the outcome will disappoint the market’s expectations, which are rampantly bullish as evidenced by this year’s dramatic re-pricing of risk assets.

Hugh Hendry

Again, we find ourselves agreeing vigorously. Past results are not indicative of future results. Consider the aluminium market.

Now with China having been on such an expansionary tear, it may not surprise you to hear that finished Chinese steel prices today trade below their production cost.

And yet it is as though the other surplus countries are behaving like Bernie’s former investors who, believing in the stated NAV and its promise of more of the same i. They know full well that neither Europe nor Japan nor Britain nor Switzerland nor the rest of Asia are willing to sacrifice the implicit loss of manufacturing jobs. Ferguson in London last month, he claimed that Japan was an extreme outlier and could be ignored.

This has been the Japanese experience to date. However, it is our contention that US savings are heading north over the months and years to come. Clearly the additional return from Yen debt in Japan is close to zero and it exposes the nightmare of interventionists everywhere: The argument can be condensed into just two fears.

The alarming thing is that my opponents see Ferguson et al. At least the Harvard endowment scheme did not share their enthusiasm for golf.

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Hugh Hendry Full Eclectica Letter on China’s Impending Collapse

I agree; it has. Of course, they are not alone. Not typically renowned as a hotbed of reactionary fervour, the fund is nevertheless radical in its construction and has come to typify the A-B-D stance. And with it the ominous precedent ofoutlined in our February report, when a back up in ten year Treasury yields from 3.

Or in other words, the best forgeries tend to pay homage to the tastes and prejudices of their time. Do not forget that the US does not share the distinction of the British or Australian housing markets. I fear they could be in for a nasty shock. Replace the dollar with IMF special drawing rights; I hear your retort.

Perhaps, it is better that we buy those Treasury put options after all? The subsequent reconstruction of modern China, though, intervened. Of course this is a minority view. In the US, however, things are very different.

So consider, instead, the annual run rate this year from January to August. Imagine that we have not even considered their pension liabilities. Hendry once said to an interviewer: People” [ permanent dead link ]Eclectica Asset Management website. It is almost as if the world’s greatest speculators are agitating for their own demise. This was further augmented by America’s willingness to run trade deficits, the modern day equivalent to a gold discovery, which became necessary to sustain the emergence of the new fuhd trading bloc.

Who would want to share a stage with so many mad villains? Think of it this way, a greater supply of Treasuries would be rclectica very obvious by-product of weaker than anticipated economic growth.