|
CNBC'S MOST SHARED
- 'We're in the Middle of a Crash': Black Swan
- The Rising Mountain of Debt May Be the Next Crisis
- Latvian Banker Taking Souls as Collateral
- SEC May Reinstate Rules for Short-Selling Stocks
- Your First Move For Monday July 6th
- Malaysia PM Speaks to CNBC
- Cuddle Parties Heat Up
- NY City Apartment Sales Down More Than 50%
- Alaska Governor Sarah Palin Will Resign
- The Worst Expected 2010 State Budget Gaps
- The Rising Mountain of Debt May Be the Next Crisis
- North Korea Fires 7 Missiles Off East Coast
- Palin's Resignation May Hurt Her Future
- For Banks, Wads of Cash and Loads of Trouble
- SEC May Reinstate Rules for Short-Selling Stocks
- For Australian Winemakers, More Turns Out to Be Less
- Vatican Runs Deficit Amid Economic Crisis
- Earnings Season: A Likely Game-Changer
- Slideshow: Best-Selling Fourth of July Fireworks
- Fireworks At Pharma's Market
- Value of Warren Buffett's Annual Gift to Gates Foundation Falls Along With Berkshire's Stock
- Michael Jackson: The Music And The Money
- Five Stock Picks for This Market
- Realities of the New Obama Refis
- Weak Dollar Means Gold at $1,040: Strategist
- Court Ruling Could Mean Trouble for TiVo
- Lance, Please Back Out Of Tour
- TeleMedicine Gets An Apple App Store Facelift
As losses mount, hedge funds no longer have the ability to drive speculation in the markets, Hugh Hendry, chief investment officer and partner at Eclectica hedge fund told "Squawk Box Europe" on Tuesday.
"There is no role for speculation or speculators today. This is kaput," Hendry said. "If we were Second World War generals, we've exposed our flanks. We've been wiped out. This is about fundamentals … this is about losing money."
As the crisis unfolds, the policymakers' focus should shift from the threat of inflation to that of the world economic downturn, which could be more severe than economists anticipate, he said. (Watch Hendry's interview below for more on the economy, inflation and commodities).
China, which many believe will balance out slowdowns elsewhere, will struggle if difficulties in the U.S. continue, while the current spike in producer prices is just a hangover from rising oil prices earlier this year, Hendry said.
"I fear that the central bankers of the world are fighting yesterday's battle," he said.
As for the banking sector, it is "insolvent," Hendry said, adding he can't tell just how low those stocks will go.
In addition, Fannie Mae [FNM
Loading...
()
] and Freddie Mac [FRE
Loading...
()
] "have no value" and it is likely that they will be put under the control of the Treasury "in a matter of months," he said.
Savage Bear Market Coming for Gold
![]() |
CNBC.com CLICK ON THE PICTURE FOR COMMODITIES DATA |
The slip in gold, which was joined by fellow precious metals platinum, silver and palladium, dragged it well below its all-time high of just over $1000 an ounce in March.
But that was predicatble, Hendry said.
Bull markets "of this variety, with the potential to trade higher, paradoxically can have these savage, and quite prolonged, bear market components, and I fear that is where we are headed," he said.
The "current markets could take gold as low as $600 or $550 per ounce," he added.
"I have greater comfort being in 10-year bonds than gold for the first time in ages," Hendry said.










