Bailey McCann, Opalesque New York:
If you're looking for an optimistic take on the state of world financial and policy affairs, it's going to be very hard to find. Nowhere was this truer than at the second day of The Economist's Buttonwood Gathering held today in New York City's financial district. The event featured several powerful financial and policy leaders and their outlook is generally grim, with some cautious optimism for the future.
Scottish hedge fund manager Hugh Hendry, CIO Eclectica Asset Management, known for his strong views on financial markets noted that looking over the macroeconomic landscape, he wouldn't be surprised to see a significant contraction in the Chinese economy. "Am I sitting here with video cameras saying the Chinese economy is going to contract 23%? Of course I’m not," he said. "But if we have a coffee later, I might say something different."
He also took aim at the US debt and fiscal policy situation which was front of mind for many of the speakers. Hendry currently owns gold and is short the S&P 500. He explained that the current view that quantitative easing fortified the S&P may be true, but it could also be that gold prices were likely just further out in front earlier on. To that end while he maintains a long position on gold, he notes that he is short gold mining equities as the risk of confiscation in politically tenuous countries with large gold reserves remains high. "There is no rationale ......................
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