Who is Hugh Hendry?
Ok its Friday and I got another YouTube podcast ready to publish with @ToStRo
@ToStRo wrote a brilliant thought piece on China. I'm going to give you the punk rock version but you should tap him up for the original; its really good.
As an orthogonal investor my inspirations have always been eclectic. Imagine my joy then when I discovered that the Chinese zodiac skips to a different beat to that of our own. I don't know why but they seek divine refuge from the orbit of Jupiter. Me ? I'm the Earth Rooster...
We in the West are perhaps more self-obsessed - for us it's all about our planet. Who knew ? Not I... 12 characters but as Confucius may have said, "wise man use slower clock". Their zodiac requires 12 years to complete it's cycle. Their predictions have a longer shelf life
Wait ! What was I doing 12 years ago ? I'll tell you. I was drinking cheap, nasty alcohol on a slow train to Wuhan. It was March 2009 and I wanted to emulate @RaoulGMI and his wonderful videos of China's ghost cities. What I should have been doing is going very long risk assets.
Hey you make your bed and you ?? Anyway I would have given anything for even a mediocre Starbucks and a chocolate croissant. Instead I had to navigate Chinese breakfast served from broiling pots of reptiles on the train carriage floor. Different zodiac ,different breakfast habits
There was a time when there was a YouTube film of me poncing around Wuhan in wonder at the sheer scale and immense sunk cost of the city's vacant skyscrapers. I could see dead people, like the kid from "seven" except I couldn't...Here's some photos from back then
Two years later I launched a china blow-up fund with $100m of client money. The vol was incredibly cheap / lowly rated and I loaded up. This was going to be my Soros moment and I would surely make a billion dollars; except I didn't...
I blame N Ferguson's Descent of Money - I'm doing that deliberately to annoy him...he hypothesised that those in charge of Weimar Germany's fiscal policy spending in the v early 1920s felt an understandable indifference to calls for fiscal rectitude.
As day follows night, the war would be followed by an export led economic boom as former foes recovered an gobbled up cheap German tradeable goods priced in a depreciated currency. Except they didn't reckon for the US / UK Depression of 1920-21.
The Fed, who else (?) its always those bozos, fearing inflation, our legendary masters of destruction, hiked rates from 4pc to 7pc. The UK economy contracted by over 20pc from aug to may 21...
The poor German bureaucrat - life never works out as you planned - all those cheap German goods never got sold to pay for the post war spending and the currency sunk without trace...
In 2012, a long time a go according to our zodiac but a mere hop and a skip to the Chinese, I postulated that perhaps the Chinese decision to bail out the west - their epic build bridges to nowhere program -following the catastrophe of our 2008. Had they similarly miscalculated?
Mistaking a period of balance sheet deleve in the West - a rare bird indeed - for a typical Western recession, China's modern day weimar policy makers - would they find themselves double cocked with an op and financially leveraged system serving a world in prolonged depression??
I went long a ton of Aussie 10 yr Ts yielding 6pc !! And trillions of yen denominated CDS on Jap steel and shipping co.s etc. But to no avail...China's bureaucrats had the advantage of S-L-O-W time.
The imminent and pressing Weimar danger was cast aside by the march of population growth, urbanisation and mega GDP growth as the rat gave way to the ox and then the tiger...me? In the time of chimpanzees, I was left looking like a monkey...
Except...whilst our hyper active system has its faults, huge errors in capital allocation rarely are allowed to fester too long to preposterously system threatening levels. In China, I'm not so sure...China's stock of empty housing units is now 55m. But that's not the problem...
The end of stellar GDP growth prints is a challenge. The demise of the urbanisation trend is more than a complication. And the evisceration of the booming population trend is definitely not helpful. Hey ! This is making me reminisce for Hong Hong Fooey - no. 1 super guy...
I have to tweet now but I got more in the tank... 
@threadreaderapp unroll
• • •
Missing some Tweet in this thread? You can try to
force a refresh
