Sunday, April 29, 2012

The New Conventional Wisdom: It Looks Like America Is 'Creating Yet Another Historic Turning Point'



From BusinessInsider: We wrote yesterday about how how Hugh Hendry is back with his first big shareholder letter since 2010.  The gist is that Hendry is more bearish than ever on China, and that his favorite way to play it remains credit default swaps on China-exposed Japanese corporate names, which are still up to their necks in debt.

He doesn't write much about the US, but we wanted to highlight his bullish commentary...
This might be the year everyone else notices this; the year panic over Chinese economic growth comes to replace the market's morbid fascination with the travails of the European continent and the year in which we see that the US is not giving way to China in terms of global economic leadership. There is a near consensus that China will supplant America this decade. We do not believe this. We are more bullish on US growth than most. The momentous nature of recent advances in shale oil and gas extraction and America's acceptance of the unpleasantness of debt and labour price restructuring looks to us as if it is creating yet another historic turning point.

As we just noted, he's not the only one making this bullish argument. It does seem as though this is becoming a new conventional wisdom, that the best path forward for the US is revolves around the exploitation of domestic natural resources (such as those in Williston, North Dakota)….



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