Hugh Hendry Sees Opportunities to `Short' Credit in Asia

More brilliance from Hugh Hendry of Eclectica Asset Management:

Eclectica Asset Management, May 2010 Commentary

This is the latest from Eclectica's philosophical and eccentric manager Hugh Hendry. Here is a taste:

Put differently, we believe that central banks in the UK and Europe are likely to keep their monetary tightening powder dry for some time yet. Accordingly, it seems likely that conjecture will remain our preoccupation at least until we receive some resolution to the great speculation of this year. By this we mean an answer to the question of whether we are in the midst of a vigorous yet typical economic recovery, or near the end of an inventory-led and rather short business cycle bearing testimony to an ongoing debt deflation.

Eclectica 05-10 ">

RBS's Janjuah Sees Euro Parity With Dollar `Longer Term'

Bob Janjuah, a voice of reason during a time of insanity. Please click this link to watch the Bloomberg video.

Prepare for the next leg in the Ice Age journey into deflation

Deep deflation thoughts from SocGen's Albert Edwards:

"While there can be no doubt that survey evidence is pointing to a more robust second half, equity markets should be far more nervous than they currently are. We heartily concur with GMO’s Jeremy Grantham who remarked recently that after 20 years of more or less permanent overvaluation of US equities, we saw just five months of under-pricing through the March trough. Do bursting global equity valuation bubbles really end like this? Of course they don’t.

One of the lessons from Japan was that, in a post-bubble world, equities were subject to far more violent swings. We expect to see an exact replica event play out in the west. The Great Moderation - where the 1980’s debt super-cycle filled in troughs of recessions - will now give way to far more violent swings in the economic cycle more usually seen in the pre-war years and the 19th century. Meanwhile, as we saw in Japan, each economic downswing will sink us deeper and deeper into the deflationary mire."

Eclectica August Letter

Here is the August letter from Eclectica, the hedge fund managed by Hugh Hendry. For those of you unfamiliar with Hugh, he stands firmly in the "deflation" camp. He appears from time to time on CNBC Europe. He brings up many though provoking topics that often aren't discussed or even contemplated, especially in the age of Quantitative Easing. This is a must read for any contrarian investors and I would make the argument is necessary for all investors. As we have all seen over the past 2 years, no scenario should be considered impossible anymore.

Eclectica 08-09