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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (63981)	5/30/2010 9:10:59 AM
From: carranza2	Read Replies (2) \| Respond to of 217741

Though I do believe Hendry is short PIIGS, I do think that he also has consistently advocated the drastic solution under all circumstances, i.e,. US banks which are too big to fail. Plus, shorting PIIGs is not very unique or original, and certainly obvious now. Thus, I doubt that there is much book talking of any consequence taking place. His statements during that interview are the equivalent of shouting 'fire!' well after the fire engines are on the way. His latest letter indicates that if he wished to talk his book, he would have been discussing a short of leveraged companies exposed significantly to China. He has been a China bear for some time now. In case you missed his latest letter: rghost.net

To: Haim R. Branisteanu who wrote (63981)	5/30/2010 10:23:01 AM
From: Hawkmoon	4 Recommendations Read Replies (3) \| Respond to of 217741

Hugh Hendry is talking his positions that is all. No surprise there.. He's analyzed the situation, taken a position, and is now trying to convince the world he's right. Folks, mainly politicians and bankers, on the OTHER SIDE OF THAT TRADE by issuing that debt are doing the same thing. And they are leveraged as well, because that's what sovereign debt is, a debt with no collateral except the implicit promise of that country's taxpayers. Now Europe (and the US) is financing bankrupt members with even more debt, rather than investing in productivity enhancing technologies that increase economic activity. We (both the US and Europe) are bailing out zombie banks which now gain their primary source of income from proprietary trading and/or purchasing government debt, collecting 3% from the taxpayers. That's huge leverage if that sovereign nation (and or municipality) goes into default because the government in question can't generate sufficient economic activity to increase it's revenue generation. And that plays right into the hands of the speculators in the CDS markets. They have every interest in seeing the underlying asset default. They don't want a debt restructuring or work-out. And since any rich party can apparently buy a "naked" CDS without being a holder of the underlying debt that naturally gives those CDS holders the advantage over the sovereign debt issuers (who have to deal with political consequences in raising cash to defend their debt issuances). But what is worse? People are losing faith in the financial system. The Flash Crash of a few weeks ago revealed that within a split second the bid can be pulled from the entire market and it can drop 10%. And if it can drop 10%, then it can drop 20%, or even 30%.. They STILL haven't been able to discover what happened on that day (or are unwilling to reveal it).. My belief if that the majority of trading is now blackbox trading and not actual human bids. We have computers trading against computers, with investors just feeding money into the system. And now I see signs that people are pulling that money out and the computers have less to trade with. That doesn't bode well for our markets, our currencies, or investor confidence. Hawk

To: Haim R. Branisteanu who wrote (63981)	5/31/2010 7:02:21 AM
From: Golconda	Read Replies (4) \| Respond to of 217741

I suspect you are not correct on Hugh Hendry's fund position. Yes he would probably benefit further from PIGS continuing to go down but his usual method is entering asymmetrical trades where the payoff for a relatively unanticipated event is huge compared to the cost of the derivative purchased to put on the trade. If the event does not take place he may lose 5-10% of fund value max. see fund performance of 50% for the month of Oct 2008 via interest curve steepeners. eclectica-am.com