CNBC Europe Squawkbox - Hugh Hendry vs Liam Halligan

[nayemkabir]

Liam was right.

[Roberpc1]

@nayemkabir was he?

[Myndir]

And, of course, quantitative easing got Britain out out recession, without imposing even more of the horrific debt involved in Brown's failed fiscal policy.

Students of Black Wednesday, the 1981 budget, the 1931 devaluation, the 1933 US programme, and basically anyone who actually has studied monetary theory, was not surprised. Perhaps that's the 200 years of policy experience to which Liam Halligan refers.

[DancinJim]

As others have said, since this debate, Hugh Hendry has been proven correct. End of story.

[johnsenkenn]

There is no way deflation is going to happen, because the central banks make sure it does not happening. We would had massive deflation now if not for the central banks.

[d1bx4pp]

This is still to early to call. Inflation is above target, but this is in the context of huge spending.

[flameblitz]

Hugh proves himself right. There has been deflation, no inflation.

The 10 yr US treasury hit the bottom at near record low of 2.5% in 2009. And right now, it is still under 3%. This is why Hugh made double digit returns, while most hedges got wiped.

Take it this way. The return on bonds have been greater than return on gold for YTD (Sept 3,2010). Hyper-inflation is NO WHERE NEAR. Hyper inflation is 'years' away from realization. Peace.

[eatandtravel]

@flameblitz

Hyper inflation aint going to happen.

[JusticeJapan1]

AGAIN, HENDRY PROVES HIMSELF TO BE RIGHT.

[BallaholicNo10in89]

Im usually a fan of Hugh, but this really does make him look stupid in retrospect, especially his insulting way of arguing.

[megawavez]

Hugh looks like a bozo here...

[mandatum]

@megawavez I agree. Hugh doesn't know shit. What is funny is today Hugh has taken up the cudgel that Halligan beat him with here. I have always felt that Hugh was little more than a con-man. After looking back at this exchange and then watching Hugh in recent clips I am completely convinced of that judgment. I can't get over the fact that those knuckleheads at Zero Hedge think Hugh is a hero.

[tradertype]

Halligan is right.

[pismo10]

Huge is one cocky SOB isn't he..Fun to watch...

[jcamargo2005]

Liam Halligan js right.

[barnbarn2000]

there is not any possibility that any deflation will happen. your heading twords a one world government where your only value will be the air you dont breathe and the carbon emmissions you dont use.

[eatandtravel]

I love Hugh but he is wrong. Hyperinflation is on the way. History is on Halligan's side. QE or printing has only one result.

[DavidAKZ]

QE is deflationary because the increase in base money is going to bail out the banks. Not the real world economy of Goods and Services. Is it any accident that the only business sector that is making spectacular profits in the banking sector ?

[Durchbrechen]

I'm watching just now a very brief interview on bloomberg. There's Nassim Taleb saying he's searching his usual black swan betting on hyperinflation using options and beside him there's Hendry who is making very funny faces at Nassim's words. Surely there's Hendry's interview as well in the full vid. I'm craving for that entire vid. Hope to see it on yt soon.

[carolako2801]

russia forum website 2010 you will find the video if you search hugh hendry... I think you misunderstood however, Taleb bets on probabilities using a barbell strategy, for little capital risked he can by a deep OTM call option that would be a hyperinflationary bet. He makes this bet, and at the same time, he will make a deflationary bet which would likely be deep OTM puts on equities. These bets don't work every time but when they do they pay off 100fold.

[Durchbrechen]

Thanks Carolako. That comment of mine was old. I've found the vid (and I've uploaded it in my channel). I couldn't get it well the first time

[darkarts59]

So this was a year ago , Who's right in the great Hendry - Halligan debate?

[carolako2801]

Well your interest rates haven't gone up... There is no inflationary pressure and Hugh is one of the few who were right about deflationary pressure. We may have 2-5 years more of it.

[djsmurfie]

@darkarts59 Hugh was; read some news regarding Europe: deflation is now a real and likely prospect across the Eurozone.

[RinaWeddinggown]

Liam Halligan is the professional to be admired. He is one of the most reasonable people I ever heard or read.

The investment fund he works is the most profitable in Russian market, by the way.

I spoke to him personally in one of the event, and was very much impressed by his personality, knowledge and arguments.

[sinathfr]

Liam sucks balls. he works in a crappy hedge fund that loads up on russia beta stocks. he makes me think of that fat kid from rich parents who like to think about philosophy. i wouldnt be surprised to see that fat douche clubbing w hookers in mayfair

[carolako2801]

Elias I think you haven't really listened to Hugh regards the demise of the Euro. One thing he always says is that he is not giving advice nor should you take his advice when you don't have the capacity to make those type of bets. I think you missed that one. And regards Hugh's ideas, he is always wrong... Until he's right.

[E5Elias]

Sure sorry I listened to Hugh as to the demise of the euro.

Ouch.

[tatelyle1]

.

Quantitive Easing is not working because all the new money is being sucked up by the government in gilt issues.

But that massive government borrowing is not going towards a huge investment in new infrastructure, or whatever (which would lift the economy), it is going towards usual government expenditure (wages, social security etc:)

Unless the government reduces the size of the public sector and starts investing in real jobs, instead on non-jobs, we are pretty well sunk.

.

[maik20091]

We definetely have deflation now in the eurozone.

[petehuss]

Hugh was rather rude during this interview.  Too bad.

[Ntone606]

Liam Halligan shows every sign of being an utterly amateur economist. Time to put your copy of Crash Proof down Liam and learn about velocity of money, credit availability and wealth destruction.

It's deflation, stupid!

[d1bx4pp]

I'm not an economist BUT...

As I understand their arguments. Hugh thinks deflation is the risk but quant' easing isn't working. But we're not deflating (food, oil etc) so where's risk? Or is Hugh wrong and quant' is working.

Lian says quant' easing risks inflation but also that quant' easing isn't working as interbank lending is locked. Which would mean no inflation especially if the banks go Zombie.

Aren't they both contradicting themselves?

I'd be interested in hearing opinions on this.

[Ntone606]

The soft commodities have utterly collapsed, and oil is way down. Quant easing isn't working because the availability of credit and the velocity of money are way down, i.e banks won't lend since they won't profit on falling assets colaterialising any lending, and people have stopped spending. Money printing can't really change attitutes.

[ulysseinvest]

I don't know what Hugh is on - but I'll have what he's having! He's high 24/7 and his speech only contradicts what he says himself. If you have deleveraging in an economy this forces prices to drop down in several sectors and some asset classes. Printing money imposes inflation on your money supply - thus giving less value to each dollar. Ntone606 - let's just leave things here for a year or two - and chat again then. Lived in Ukraine ('92) and in Argentina - you have to see it to believe it...

[Myndir]

@ulysseinvest How's that hyperinflation going?

Treating all the money supply as equal is a classic Freshman error. If you're printing interest-bearing money (i.e. money with IOR) then you don't get the hot money effect of the quantity theory. Very basic stuff.

[ulysseinvest]

@Myndir,

Give it time, give it time, my friend. Money printed is money printed. Short cut your lessons and go to John Law and other past events. Give it time. And I have not included the upcoming QEs.

Good luck with all your investments.

[Myndir]

@ulysseinvest You too. I think the near-term outlook is still pretty deflationary, unless real GDP growth slows down, because the money supply still suggests slow nominal GDP growth. But the uncertainty and the strong possibility of higher inflation in the US down the line (and already in the UK) suggests that inflation hedging is still where it's at.

[ulysseinvest]

@Myndir

I think you may be confusing "inflation" with "price index" - you should stop getting your financial education from FOX and open a real book. The "price index" (impact of money supply on prices) is obviously dropping. The "inflation" (increase of the money supply) is obviously increasing, unless you allow the government to fool you with M2 and other fractional reserve tainted meaningless numbers.

Follow the white rabbit - in our case, M0 - and take the red pill.

[Myndir]

@ulysseinvest I don't watch Fox.

I agree with Ron Paul and ShadowStatsdotcom that M3 is the most important measure of the money supply.

[maik20091]

German inflation hits zero, lowest level for 22 years :O

[anujbahl]

HH is talking a lot of shit for someone running probably the worst performing hedge fund for the last 10 weeks. His gains from treasuries last year went kaput in 2 months.

[KLguy133]

We need more of this , HH vs manduca and other dickheads .

[Azbx23]

Liam Halligan: An increase in money supply through quantitative easing may not cause inflation if the money never enters the economy. That's what's going on right now; the money is sitting on banks' balance sheets. Please see Japan last 20 years.

[danbuck333]

japan also had the lost decade because of it, not someting that you could spin as being something good

[madridisinSpain]

bubbles79: Hugh Hendry is a very intelligent person, and I think he knows and understands all the arguments that Halligan is giving. That makes his comments more valuable.

[vcdrob]

Hendry is extremely smart ... he knows what's going on.

[bubbles79]

god!!! hendry is some dick, and totally delusional. somebody give halligan more than just his telegraph column!!!!

[maik20091]

News today: Inflation in the UK higher than expected...

[malumalumalu]

Hugh henry may be smart but he is pretty rude and immature

[pismo10]

There seems to be two schools of inflation.

One is prices at the store (Hugh) the other is quantity of money supply therefore less value per dollar(Rogers, Schiff, Liam, etc)

They all argue constantly tho they are basically discussing different things.

None of the interviewers ever seem to mention this difference.

[pfalstad]

I am a big fan of Hendry but I found this disappointing. Hugh was rude, Liam kept interrupting and going on and on about things they both agree on, and they didn't spend enough time on the real issue I'm interested in, inflation vs. deflation.

[maik20091]

I bet he has lost some money...

[2TheDeath]

Hendry is a disrespectful ass and is far too in love with his own voice.

[rh7onda7]

i think Hugh hendry is probably right - pity he had to get so personal with his opponent he came across is a condescending prick tbh

[vidsee]

Hugh Hendry is a patronising twat. A typically arrogant Jock.

[marquisevirginie]

hugh hendry comic as always

[pancilobak]

I can not be certain what s gonna happen, however there is a possibility that deflation may happen in asset prices while inflation may happen in basic necessities.

[eatandtravel]

I think you are right. Daily living essentials are going up.

All asset classes are going down.

[eatandtravel]

@pancilobak

We will see inflation in essential goods like oil and food because of global demand. The world's population is increasing.

[s00ted]

Halligan needs to take a course in economics.

He agrees that quantitative easing (printing money) will fail to inflate the economy. He agrees that banks will not be giving out credit for consumers and companies to spend/invest.

What does that spell? DEFLATION not inflation!!!

[eatandtravel]

Halligan is just spitting out cliches.

[AFRIKTODAY]

Where will that money go then? All the bailout and government programs that have been signed here in the US will eventually enter the general economy one way or another! Won't that cause some sorts of inflation! The dollar has already lost 30% of its value since 2000!

[stuartfanning]

Great post!

CNBC London are using this argument in promos for Squawk Box Europe now.

[NewzTube]

oh cool thanks for that! sure was firey!