THERE’S been some glowering across the desks over at SocGen, where a divergence in the viewpoints of European economists Albert Edwards and Dylan Grice last week played out via email to their amused army of readers.
Edwards, in a note playfully entitled “Shame on you, Dylan Grice”, defended his own perma-bearish “Ice Age” view on equities in the face of apparent bullishness from his colleague – and remarked that Grice’s view of inflationary pressures in Japan sending the Nikkei rocketing might, at a stretch, be useful “as a [cheap] hedge against my central case being wrong or, indeed, too early”.
For a day or so, there was silence from Grice himself, until our man in the spotlight sent out his own impassioned defence of his forecasts – laced with a heavy dose of sarcasm.
“I’ve been found out. All that stuff I’ve been writing on cheap ways to hedge tails or the search for mispriced intrinsic value has been a front to dupe Albert,” Grice began. “As someone gleefully concluded upon reading my work on the nascent bubble developing in EM, I’ve really just ‘lost the faith’ and don’t have the decency to come out and say so: shame on me!!!”
But after a meandering note which ranged from chimpanzees and human evolution to the mood swings of the market and a withering attack on central bankers and QE, one thing’s clear: among the strategic niggles between Grice and Edwards, the former most definitely has the upper hand where it counts.
“I have no idea if QE will work,” Grice wrote, “but does it really matter? I didn’t know Wayne Rooney was going to have a duff season when I chose him as my fantasy football captain, but the absence of a crystal ball hasn’t stopped me reaching the summit of our office league (and a comfortable twelve points ahead of Albert)”…
MAN AND MACHINE
To Amsterdam at the weekend to hear Henderson’s currency fund manager Bob Arends expound at length on the virtues of investing in currencies, which he argues are an investor’s dream – volatile, but not so jumpy as equities; liquid; transparent; with low correlation to more traditional investments, and so on.
His fund has a rigorous strategy of screening currency pairs to weigh up the best investments based on balancing interest rate “carry” and risk, so The Capitalist was intrigued to hear him speculate over how far the dollar could fall. Would he ever, Arends was asked, intervene in the strategic modelling machine because of a personal view on a currency’s trajectory?
“Never,” he replied, without a glimmer of sarcasm. “I am the machine…”
Arnie, eat your heart out.
TOUCH OF SPARKLE
Back in the City, financial printing group Millnet hosted a party to celebrate its 15th birthday at the top of the Millbank tower, at which the canapés and champagne were paired, of all things, with a ladies’ fashion show by designer James Lakeland and a dance troupe of blonde beauties scantily clad in sequins.
“There was nothing Carry On about it, it was really elegant,” one director tells me. “And anyway, we made sure we got sign off from all the girls working for us beforehand, to make sure they were happy with it.” A sign of the times, if ever there was one.