Hugh Hendry interview on the BBC
BBC HARDtalk interviewed hedge fund manager Hugh Hendry, CIO & CEO of Eclectica Asset Management, this past Tuesday night. The videos are below.
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BBC HARDtalk interviewed hedge fund manager Hugh Hendry, CIO & CEO of Eclectica Asset Management, this past Tuesday night. The videos are below.
Comments are closed.
This is one of the best interviews I have heard, and the usually quick-witted Hugh Hendry was out of his depth.
All he thinks about is bail outs, regulation, will the market go up or down… The real question though is do we want our society to reward bankers and hedge fund managers rather than doctors and engineers? are these the role models that will make our society better?
Despite believing himself to be a smart man of the world (he probably is in a way), Mr Hendry had barely considered those questions. Heck, he even thought that there is no point for society to be thinking about whats just and whats not!
Alex, I have to agree with you that Hendry’s responses fell short. I think it’s because they lacked subtlety. He was taking a stark black and white position on a lot of issues. And this left him open to a number of internal contradictions.
Despite his answers, I imagine he actually has thought about society’s role in getting smart young people to appreciate being in medicine and engineering. It’s just that he realizes it’s inconsistent with his stark pro-market approach to believe that anything other than the market can create the right pre-conditions for that.
He struggled with all this when talking about giving him a free hand to fail. Yet acknowledging that the financial services industry has created a mess for the global system. I bet if you asked him about markets and government intervention, his response would be something like “relying on markets is like democracy; it can be pretty god awful but it’s better than the alternatives. I choose the market every time because I simply lack, and the elites lack the ability to discern when markets are destined to fail.”
I think this is the debate that is still ongoing despite the near-collapse of our financial system. Government should set the ground rules and enforce them assiduously. But does government intervention invariably lead to sub-optimal outcomes? And if so, under what conditions and in what circumstances?
Ed,
my view is this. While it is difficult to make clear statements and find exact solutions (unless you are in the black and white camp) to all, we can still agree on some evident statements, and start from there. For example:
Focusing a society on money is bad. Unleashing society’s youngest & brightest on a hunt where the prime reward is making money is wrong for our society and bound to lead to disaster.
I wonder would many people, even in the US, object to a statement like this? (and I am sure people better educated than myself can phrase it much better).
By establishing some ‘truths’ we can move on and evaluate issues that face us. If Mr Hendry’s only interest is making a money, and succeeds, who cares. But when important institutions (such as investment banks, employing thousands, training bright young graduates (into Hugh Hendries), influencing policies and individual lives etc) are permeated by such a culture that’s wrong. I don’t need to get into the mechanics of the subprime, or tech bubbles to establish that, although they make good case studies. We know such a culture is dangerous, even before any of these bubbles appeared.
It all comes back to a great post you wrote a few months back. Details are thrown in to complicate issues by those who do not want the plain truth to be discussed. I would argue that Mr Hendry is a victim of this.
And I get back again to what I found most astonishing in Mr Hendry’s interview (middle of Part 3). The strategy of confusion and ideology has worked so well on him, that he says ‘we cannot define ‘just” and mocks government striving for justice. Isn’t the fact that Mr Hendry has turned into this, from a bright and talented young man no doubt, a perfect example of whats really wrong with the financial community today?
It seems to me that the interviewer from the BBC (Surprise) was more prepared than Hendry. He brought more to the show then the interviewee. His questions, comments, and follow up questions were spot on and it looked like Hendry was just leaning on the same broken rules that the financial sector has been leaning on the last 30 years. The idea that we have TBTF institutions and that they are the problem is a no brainer. Capitalism without failure is not a new idea. This is not rocket science. We all know that the system is broken. We all know who broke it. We all know who will break it again. Letting irresponsible firms to go broke should not be policy. We shouldn’t have rules for stuff like this. All of this should be inferred. Hendry seems to think that letting firms fail is the panacea. WRONG! Making financial instruments easier to understand, making them less toxic, eliminating most of them should be policy. I am a former derivatives trader who knows that these instruments (CDS, CDO, CLO) were only created to make bankers and traders more wealthy. Hendry is leaning on the fact that he can tell the public that firms need to collapse just exonerates himself and the hedge fund community. Look at me! I am one of the good guys! I am against the bailouts! Don’t be fooled. Hendry’s career just like Paulson’s and Tepper’s, to this day is still kept alive because of the taxpayer. It is beyond preposterous for this guy to say that if they would have let firms go broke that he would have made more money. I think I may have seen his lips move when he said that.