Mark Hart – China

Published on
January 18th, 2016
Topic
China, Structural flows, Financial System
Duration
55 minutes
Asset class
Currencies, Equities, Commodities

Mark Hart – China

Featuring Mark Hart

Published on: January 18th, 2016 • Duration: 55 minutes • Asset Class: Currencies, Equities, Commodities • Topic: China, Structural flows, Financial System

In this outstanding follow-up to his Master Class from September 2014 in which he predicted correctly that China would devalue the Yuan, Mark Hart, founder of Corriente Advisors, lays out a roadmap for how the deflationary consequences of fiscal stimulus in the West and capital controls within China will lead to a far greater devaluation of the Yuan than anybody expects.

Comments

  • MC
    Michael C.
    7 September 2017 @ 05:09
    Sopunds like he has just reversed his negative view. Would be interesting to hear what drove this? CNY has been quite strong.
  • fT
    forecast T.
    2 April 2017 @ 05:56
    Whats a mini short squeeze
  • SB
    Sam B.
    13 December 2016 @ 18:58
    I think Mark's logic is dead on and he'll ultimately be proven right... but now that almost a year has gone by and the sharp CNY devaluation has yet to happen, I'd love to get his current take. Seems like global central bank coordination staved off the need for a sharp deval back in February ("Shanghai Accords")... please get him back on RV pronto!
  • ML
    Marc L.
    28 February 2016 @ 09:56
    you can buy 3 different CNY or CNH put options at the SIX (Swiss Exchange) denominated in USD - check the following ISIN: CH0283710884, CH0259488713 or CH0259490883
  • LA
    Linda A.
    23 February 2016 @ 21:57
    Thank u Mark! I enjoyed getting a truncated lesson in global macro economics & specifically the "carry-trade". U are a smart, impressionable & humble person.
  • GA
    Guy A.
    17 February 2016 @ 02:54
    Don't have access to currency options & the roll charge for shorting CNH prohibitivly expensive in my forex account. Any thoughts on shorting HKD? Will they necessarily devalue it along with the yuan?
  • SM
    Stuart M.
    13 February 2016 @ 12:12
    Mark, or anyone, can you comment on perspective in this article -- that western bias is causing us to miss what China is actually up to?https://www.goldmoney.com/shorting-the-yuan-is-dangerous
  • CM
    Charlie M.
    7 February 2016 @ 18:35
    I really enjoyed this interview. Replayed several sections - very educational. RV is my new graduate school.
  • PB
    Peter B.
    6 February 2016 @ 05:50
    3rd time watching this
  • LP
    Lynn P.
    28 January 2016 @ 20:48
    Interesting trade here, as Hendry and Louis-Vincent Gave have a different perspective.
  • AG
    Alexander G.
    27 January 2016 @ 13:47
    I heart Hart! Big deval will come, but Chinese have to give local companies a chance to prepare / wait for contracts to mature (otherwise huge losses at importers/exporters possible)
  • DK
    Damian K.
    25 January 2016 @ 21:52
    Would also be interrested in knowing if there's a US retail broker offering yuan options
  • RW
    Raymond W.
    25 January 2016 @ 14:49
    The January 24th "Thoughts From The Frontline" by John Mauldin gives the steady as she goes slow rate change argument if anyone is interested. You can google it.
  • FC
    Fractal C.
    24 January 2016 @ 19:53
    @Ian, I have nothing against Hugh Hendry. I saw this link and I felt curious and hence mentioned the same here - http://www.eclectica-am.com/fund-statistics-eamf Best wishes.
  • IF
    Ian F.
    24 January 2016 @ 14:17
    @DHIREN - Frighteningly your math must be bad. Eclectica is one of the longest running London Macro Funds at 14 years with 8% CAGR. Hendry's 2016 Outlook: https://www.youtube.com/watch?v=ZWz_Pln_uuI
  • DS
    DAVID S.
    22 January 2016 @ 18:27
    Mark also demonstrates putting on a good trade ...with an excellent favourable risk to reward ratio, + He's extra clear on his view. What a great example. Thank you MH and RV
  • FC
    Fractal C.
    22 January 2016 @ 16:45
    Fwiw, Hugh Hendry fund has a CAGR of 2.47% since inception.
  • TS
    Tamara S.
    22 January 2016 @ 01:15
    You both are such interesting thinkers and can express the issues so well. Thank you.
  • IF
    Ian F.
    21 January 2016 @ 14:43
    My favorite hedge fund manager Hugh Hendry is taking the other side of the trade. His interview here: http://www.bloomberg.com/news/videos/2015-10-07/markets-most-influential-investment-outlook-panel
  • JH
    John H.
    20 January 2016 @ 19:29
    if the Chinese leave their banks, its an easy stretch to say physical gold will move up. But, will this move break, once and for all, the western paper gold manipulation? maybe force a raid on comex?
  • MC
    Mike C.
    20 January 2016 @ 19:15
    Either the Chinese government declares Bitcoin to be it's national currency or the citizens will. Outflows into BTC have already commenced. I know this is bold but none the less, possible!
  • DS
    DAVID S.
    20 January 2016 @ 18:56
    What's to say: Brilliant!! ...Long Hart!!!
  • FC
    Fractal C.
    20 January 2016 @ 16:34
    any brokers that offer options on forex in the US? Thanks
  • TB
    Tim B.
    20 January 2016 @ 15:51
    Mark is a fantastic mind. However, I'm concerned by the comments of almost sycophantic proportions on this thread. Where's the discomforming evidence, the counterfactuals and the debate!?!
  • TT
    Turing T.
    20 January 2016 @ 14:47
    Sorry Mark and Grant, didn't mean to be so curt with prior comment - would have enjoyed a more free ranging discussion of anything and everything interesting to you Mark. Good luck with the trade :)
  • RL
    Rick L.
    20 January 2016 @ 12:41
    Won't be able to sleep after watching that. He's 100% right. Its sterling 1992 on a massive scale.
  • jm
    joeri m.
    20 January 2016 @ 11:37
    Varun, in his first interview he explains how to trade this. He buys 7 strike out of the money yuan puts 6 months to one year and a half out
  • SL
    Steven L.
    20 January 2016 @ 03:54
    USD/JPY weaker. Maybe China waits for the next BOJ shoe to drop and then devalues. Lots of cover then.
  • db
    don b.
    20 January 2016 @ 02:22
    This makes me wonder if the US is suppressing gold for China in exchange for China agreeing not to devalue the Yuan. Perhaps oil as well giving China time to pick off oil reserves at the low.
  • db
    don b.
    20 January 2016 @ 01:33
    http://seekingalpha.com/article/3440886-further-devaluation-of-the-yuan-will-drive-gold-prices-higher
  • RM
    Robert M.
    20 January 2016 @ 01:29
    I would like to know what I should study to get the framework that Mark, Raoul, and Grant all come up with.
  • VK
    Varun K.
    20 January 2016 @ 00:27
    Did anybody get how he is playing this trade? Buy Puts on RMB futures (around 7 Yuan or more; 6-12 months out) as traded on CME?
  • TT
    Turing T.
    19 January 2016 @ 23:24
    Prefer a conversation format personally
  • CM
    Corentin M.
    19 January 2016 @ 19:47
    As usual, outstanding! By far, the best of the best you got out there on RV. @RV Agreed on the possibility to broaden the rationale towards other assets/asset classes
  • KE
    Kenan E.
    19 January 2016 @ 18:50
    Does it really matter if you are short yuan or any other major developed stock market. Wouldn't a sharp yual deval take a lot of those markets A LOT lower??
  • JA
    J A.
    19 January 2016 @ 18:25
    Where does he get the estimated data in regards to the FX intervention in the first 12 days of January???
  • FL
    Frank L.
    19 January 2016 @ 17:14
    Assuming Mark is right ,what happens to the price of gold? Especially considering the amount of gold China has in reserves, along with the other BRIC nations. Frank
  • tW
    tgwtom W.
    19 January 2016 @ 16:35
    IMHO, If you liked this, must read perfect companion piece by RV contributor @WorthWray of @EvergreenGK 'For What It's Worth'1/15/16 http://bit.ly/1PoaHmg
  • GM
    Gerald M.
    19 January 2016 @ 15:36
    Interesting how one-sided all the comments are. Nothing can be that assured (effects of CNY deval). Agree that Mark is brilliant. Thank you RVTV for having him on. We are lucky to have access!
  • RM
    Richard M.
    19 January 2016 @ 15:08
    Part 2 - (previous comment box to short to finish) - Fantastic interview, Mark is definitely one brilliant yet humble guy! Thanks for having him on RV!
  • RM
    Richard M.
    19 January 2016 @ 15:07
    Perhaps they are delaying the deval while they quietly tell all the SOE's and public/private equity/corp's to convert their US$ based loans to CNY loans so they don't get killed on the deval.
  • MA
    Meshari A.
    19 January 2016 @ 11:36
    Great interview, one of the smartest guys around. Anyone know why he opted for puts rather than calls? or are they just priced that much cheaper?
  • bp
    bart p.
    19 January 2016 @ 10:53
    Very good interview, would really love to see him back on RV this year for an update on the rest of the world!
  • RA
    Ricardo A.
    19 January 2016 @ 10:00
    Maybe my expectations were too high (after 2014 interview) but this interview felt somewhat short of it. Would have been nice to see 5-10 min Mark's view on 2016 and the rest of the world
  • TL
    T L.
    19 January 2016 @ 09:19
    AA you can buy yuan puts = USDCNH calls at Saxo with a welcome bonus through this link: http://uk.saxomarkets.com/iit-dcf/referral/?RefId=05C34E88-9E1E-40E5-A3DF-3E629C0B96DE&cmpid=GLOBAL-REF-UK
  • GT
    Graham T.
    19 January 2016 @ 08:48
    Anyone made a call to Xi ? "Hello is that Mr Hart? its President Xi here"
  • MS
    Mark S.
    19 January 2016 @ 06:36
    Simply stunning analysis. Real Vision has done it again. For about the 100th time.
  • SD
    Stephen D. | Contributor
    19 January 2016 @ 06:01
    Mark is 100% right about the Asian crosses.But the quanta mentioned are too wild. CNY is 20% above a 10 year average versus Yen, 12% above Korean won and 10% versus Taiwan $.
  • S
    Swapnesh .
    19 January 2016 @ 05:45
    really awesome, talk about knock on effects, if Fed were required to do QE4(as a result of the deval), I think we can agree that it's going to get very ugly out there.
  • JS
    John S.
    19 January 2016 @ 05:38
    Domestic savers should be shielded from a devaluation to some extent by their substantial gold holdings.
  • BJ
    Brent J. | Contributor
    19 January 2016 @ 04:32
    1 of my 1st comments after meeting Mark was my belief CNY would need to deval. At time I didnt know his thesis or positioning. He simply said "me too". Smartest guys in the room are always quietest
  • CD
    Connor D.
    19 January 2016 @ 04:06
    Has played out exactly as he stated in his previous interview from last year. Would love to know more of what he thinks are the "knock on effects" for world markets. Equities, treasuries, credit etc!
  • RP
    Raul P.
    19 January 2016 @ 03:56
    Great interview! Thanks for your insights and thoughts. Besides playing Yuan puts, can we assume a vast devaul being a negative for the Chinese stock market?
  • sp
    shashwat p.
    19 January 2016 @ 02:19
    F***ing Brilliant Interview. My only counter argument is that China now has lots more "wealth" than China in 94. A devaluation this big is exponentially more difficult decision than in 94.
  • BV
    Bryan V.
    19 January 2016 @ 01:52
    I wonder if the possible yuan devaluation explains why the Chinese have been pushing gold to their domestic population, so as to reduce social uprisings.
  • DC
    Dave C.
    19 January 2016 @ 01:52
    Very well constructed argument - I have just googled "The Global Macro Analyst Art of Exporting Disinflation" and found a report that is very relevant to this discussion IMHO
  • TL
    T L.
    19 January 2016 @ 01:30
    This video by Mark will again be the best of the year on RVTV.
  • MR
    MIGUEL R.
    19 January 2016 @ 01:24
    i think part 2 is needed, what are the second order effects? we need Mark back to unpack his entire post china deval thesis.
  • MR
    MIGUEL R.
    19 January 2016 @ 01:16
    Mark Hart - smartest guy in the room period. Can we please vote to have him back regularly! His clarity and connecting of dots is hugely impresive.
  • CN
    Chasen N.
    19 January 2016 @ 01:16
    Excellent job RV bringing Mark back on
  • CN
    Chasen N.
    19 January 2016 @ 01:11
    I thoroughly enjoy listening to Mark's thought process. I never connected a yuan deval to QE4. Seems to further the long gold and dollar thesis and short anything that's connected to commodities
  • WW
    Worth W. | Contributor
    19 January 2016 @ 00:54
    I've learned more about macro from Mark Hart than anyone in my career. He doesn't do media interviews. Ever. But this is the 3rd time he's been on RVTV. Love it.
  • ds
    david s.
    19 January 2016 @ 00:49
    Unknown Unknown - China could force HK to peg HK $ to RMB. This could buy China time
  • BK
    Bruce K.
    19 January 2016 @ 00:39
    Oops: make that "per Andrew's comment BELOW."
  • BK
    Bruce K.
    19 January 2016 @ 00:38
    Fantastic interview, great to hear such timely stuff from the "front lines." Per the comment above, I would have LOVED to hear a bit on the knock-on effects ... US Treasuries, for example.
  • je
    james e.
    19 January 2016 @ 00:38
    Really beautiful to listen to Mark. He said in last intvw that he was "chasing Flow" (see Book). He has achieved it because he loves what he does probably more than the money he makes if right. A+++
  • TV
    Todd V.
    19 January 2016 @ 00:29
    Wow! I have never heard of Mark before but I agree with an earlier comment he is def' the smart man in the room concerning the event's and possible effect in China and on the Global Theater. Brilliant
  • SS
    Sam S.
    19 January 2016 @ 00:04
    A post on suggested yuan puts and other effect$. Hart to Heart---simple yet brilliant. More Please.
  • KD
    Kevin D.
    18 January 2016 @ 23:49
    Brilliant. And the fact that market still only looking for 5-10% deval (and most scared to even position for that) shows that absolutely nothing was learned from 2008, or 1998/98, or '94, or.....
  • DM
    Daniel M.
    18 January 2016 @ 23:42
    Btw My posts are my humble attempts to answer C. They do make it difficult for residents but RMB leaves many ways and but New Elites buy property, & companies simply do trade fx. Hart is great.
  • AS
    Andrew S.
    18 January 2016 @ 23:40
    Great interview but in the future when you have the smartest guy in the room available please expand the scope a little bit. Effects of a sharp yuan devaluation on gold? Stocks? Dollar? Oil? etc.
  • AA
    A A.
    18 January 2016 @ 23:37
    Very good interview but could someone share a broker /platform in UK/US for buying low delta yuan puts pls?
  • PR
    Peter R.
    18 January 2016 @ 23:28
    A well signposted interview and boy was it worth waiting for. Mark has a great insight into how the mechanics of China finance work and how they will play out. For me a lesson in global economics.
  • DM
    Daniel M.
    18 January 2016 @ 23:27
    Devalues also a slap in face to current foreign capital but Harts right - if you go quick&low enough you will see new money come in AND equilibrium and free market global fxtrading then feasible L/T
  • H
    Harry .
    18 January 2016 @ 23:20
    Marks clarity of thought is a pleasure to listen to. His humbleness always particularly strikes me. Low delta yuan puts!
  • DM
    Daniel M.
    18 January 2016 @ 23:19
    On cap controls- considering outright trading halts and a command control history, it is possible they will tighten controls but cap controls tend to backfire L/T as it scares away inflows L/T.
  • CB
    C B.
    18 January 2016 @ 22:54
    Excellent. Wish he had spent some more time on capital controls, who inside China is dumping RMB and why can't these leakages be stopped (like the short sell ban). China giving up FX control is big.
  • DM
    Daniel M.
    18 January 2016 @ 22:19
    Yeay!!