mark: hugh hendry, eclectic asset management founder here on bloomberg earlier. this take of hedge funds, let's bring in our hedge fund correspondent. the hedge fund industry is losing one of its big characters. would you not say so? >> he has a long-term track record. it was -- i would not say it was just performance that led to him shutting down. primarily, because it was too low that you could sustain the business. there are many macro hedge funds across the globe who are doing worse than him. since they have billions of dollars, they are able to sustain their business and still continuing. in this case, it is incredibly hard to basically run your fund. mark: give us an idea of the hedge funds that have been liquidated this year. last year was a tough year for the industry. how does it compare year on year? >> more hedge funds have shut been started since at least 2015. that trend continues. it is primarily because of the performance and investors have not been willing to wait out. they are pulling out money from losers. not that they are allocating money to h

hugh hendry from the city of london.lix: i have a feeling his being idle is different from us being idle. you have terminals on the beach. is there with us and from london is jordan rochester, i want to get your reaction to parts of the conversation that came out. something that struck me was the idea that there is going to be an air pocket and you do need the protections but the protection needs to be cheap. >> protection his cheap. tremendous overlap in the macro views. why is protection cheap on equities? earnings to >> we saw an implied lie lows diversification can be added cheaply and folks are moving away from diversification. >> this is a chart we have been bringing up, the white line is fx volume, the blue one is the volatility of s&p stocks, the purple line is the move index and volatility of treasuries. maybe we have seen pickup and fx volatility but so historically low and hard to find the event that changes that. as if this is a structural change. you had them having the conversation and that was a big part o

there is a great interview coming up with hugh hendry.d like this. the journey from glasgow to the city of london, the return 31% in the depth of the financial crisis. they a u m went from billions to millions here at it will be a conversation about how tough it has been to make the transition bear -- bear to bull. will be interested he left a final trade in there as well to do with bond market volatility. tom: what i thought was remarkable is mr. henry does not -- did not get crushed. it was little losses for a long time, different than the usual hedge fund debacle. jonathan: i think they did mid returns, we will get into that with him. to your point i think that's an individual event. it was a man known to be the big bear turned bullish, but never quite managed to hold onto the aum. people gave him money because they wanted money there for the doomsday scenario. jonathan ferro though, looking forward to hearing what endry has to hugh h say. when emily says the high level of leverage at chinese companies is an accident waiting to happen

jonathan: i caught up with hugh hendry, after 15 years, he shut down that fund.et a final trade from him. this is what he thinks is the most distorted market on the planet. take a listen to this. hugh: inevitably there will be an air pocket. where is your protection? so in protection terms, i think , the most distorted asset class in the world is the two-year german bond. i would be short that. people are willing to lose 75 basis points a year for security. you know what? you don't need that security. it is the wrong price. jonathan: kathy jones, the two year, that is a stubborn trade. kathy: the problem is we have been saying that for how long now? jonathan: quite a while. kathy: yeah, and so people get tired of fighting the trend. they are starting to stand back, but it doesn't make sense. i am not willing to pay the government of germany for the privilege of buying their debt. jonathan: certainly not 70 basis points. george, i would ask the depot rate of the ecb is -40. we have an ecb talking about pulling back, pulling back on qe, as well. yet, bund yields ha

take you back to the hedge fund world what we've seen this morning, big headline overnight saying hugh hendry is closing his funds. he was the star of 2008, even though later on his portfolio shrank quite a bit do big names still work in the hedge fund industry? is it about whether you have an ai-trained person on deck? >> one ai-trained person will not cut it i wish it would. you have to find -- it's challenging. you have to be nimble enough to be flexible and venture into the new areas. that's the challenge with a larger organization, new ideas find it harder to make it through. it's also a question of budget that makes it harder for smaller companies to continue to push for these innovations. it's becoming more and more costly so you do have to have a certain size but at the same time the organization has to be flexible and nimble enough to venture into the areas you were just pointing out ai is one area that has advancements that takes place i think it's necessary to go into these and look into these approaches and use them eventually and funs organizations are not willing to do that they

capital vehicles this is, as you mentioned, just the latest in a string of closures it follows hugh hendry'sement last week he'd be closing his first eclectica and andy hall announced he'd be closing astenbeck. the city saw findustry saw fewe sures during the second quarter. fell to 222, decline from the prior quarter and same quarter last year. at the same time, hedge fund launches totaled 180 compared with 170 during the second quarter of last year and it harks back to something julian robertson told you, kelly, at last week's delivering alpha, said one of the key issues plaguing the industry right now is competition and pine river is just the latest to succumb, guys. >> tough out there >> yeah, i mean, you would have thought we're through it by now. >> no. >> leslie, just real quickly, feels like this dribble continues, don't you think there are years when it accelerates, but doesn't feel like we're through it yet. >> not at all. and, you know, digfferent reason for the closures andy hall cited algorithms, no longer as a fundamental manager compete with the computers you're seeing redempt