Being Tested

Published on: October 21st, 2019

Although the economic backdrop is weak, the dollar and bonds are testing Raoul’s hypothesis… it’s time to assess where we are…


  • DD
    Derek D.
    25 October 2019 @ 18:14
    Did the Saudi attack ruin our death flush in oil?
  • DB
    Daniel B.
    24 October 2019 @ 05:30
    Raoul, what is the EPS Adjusted chart based on? Adjusted meaning it’s normalised for buybacks? Or adjusted earnings and we expect EPS to fall in line despite the buybacks?
  • TF
    Thomas F.
    23 October 2019 @ 13:54
    Is the Chart on the G10 Economies right? Seems like the wrong one...
    • DD
      Derek D.
      24 October 2019 @ 01:56
      Looks like the US chart just got repeated, yes.
  • JS
    Jim S.
    22 October 2019 @ 18:29
    Thanks for recommending turning down the noise, my wife and kids will appreciate it. Deleted my twitter account yesterday so I can stay focused. Have you heard Jeff Snider’s thesis on there being bad collateral in the repo markets that drove the rates up? And that there are plenty on excessive reserves to soak up the treasury issues, but that the dealers aren’t lending for some unknown reason.... just wondering if you had any thoughts regarding this ... not that I think it would change positions in any way.
    • MS
      Michael S.
      22 October 2019 @ 18:39
      Free advice is worth what you pay for it I guess. I've heard one major bank has has a epic derivatives blow up. There is uncertainty about how wide spread. I guess that might be considered a collateral problem. FWIW. Also fast and furious Chinese redemptions from all sorts or funds and asset pools. I'm unclear on this.
    • BM
      23 October 2019 @ 01:47
      Repo market collateral quality isn't what drove rates up. Excess reserves are concentrated in the largest banks, and the largest G-SIB banks (e.g. JPM, C, GS) are deleveraging into end of Q4 because if they don't they are at risk of higher G-SIB surchages. Lending excess reserves in repo would raise their balance sheet right when they are trying to shrink it. On top of this, banks are already complying with NSFR even though it isn't in force yet, and NSFR has a 5% stable funding requirement for Treasury repo but 0% for excess reserves--so they would be penalized for deploying your excess reserves in the repo market. The bigger deal regarding credit quality concerns is the Fed's proposed standing repo facility--they are considering letting non-banks participate. Fed would then be lending to counterparties of unknown credit quality, so we will have thrown Bagehot's principles out the window.
  • se
    scott e.
    22 October 2019 @ 20:43
    We cant argue with the data points Raoul but we know the markets can and will react to policy and politics ... in the UK, US , Japan , EZ and China we are likely to see dramatic intervention in line with both. It is a brave man to stand against this backdrop and the will of politicians to stay in power.
    • MS
      Michael S.
      22 October 2019 @ 21:39
      I agree Scott. When pomo was announced I blew out my long duration trades. I've kept gold, but that is like owning life insurance, you buy it and pray it never pays off. So I just don't watch it. If it falls whatever, I'll buy more.
  • MS
    Michael S.
    22 October 2019 @ 17:51
    I've held the view QE everything. Drives my stock jockey friends crazy. My question is: could the world be in the process of re-rating all debt in a massive repricing of credit across all regions and debt instruments (as seen in short term funding mkts) ? Boom, we wake up and the 10 year treasury is 10 percent? The standard playbook finally goes up in flames. I'm core in gold.. I have never really owned much, seems like the logical way to carry out the game theory. Guess bitcoin fits as well.. they seem to run tight together.
  • DC
    D C.
    22 October 2019 @ 07:13
    Equities feel dodgy. But so says everyone. 12 week ascending triangle on the SPX supports a break higher.
    • JL
      J L.
      22 October 2019 @ 12:35
      Indeed they say so. Repeated by most nonfinancial friends: I know the stock market will probably crash in the next 6 months but over a decade or two you always make money. Could it be both statements are wrong...
    • JL
      J L.
      22 October 2019 @ 12:36
      100% of my friends are passive millenial investors I should add
  • AH
    Ali H.
    22 October 2019 @ 07:43
    Thank you, excellent analysis as usual
  • PT
    Pradeep T.
    21 October 2019 @ 20:25
    Raoul, is the US 2s 10s curve steepening real based on what you feel about the dollar price action? The 'US10Y-US02Y' has broken a trend line towards the upside and so do you see this as a genuine curve steepening or a false break?
  • TB
    Thibault B.
    21 October 2019 @ 16:38
    It is not a test anymore. We clearly saw that the recent poor data from US had no impact on the bond markets. I see a trend clearly broken on ED. Given the COT, there is still some liquidation going on. If EDZ20 breaks 98.42 this is game over.
    • PT
      Pradeep T.
      21 October 2019 @ 20:20
      EDZ20 has demand/support levels at prices below (98.090 to 98.020 and 97.880 to 97.785). IMHO, all bets are off if both these levels don't hold (the first one in particular). If it bounces off, then it could be a false trend break.
  • JK
    James K.
    21 October 2019 @ 17:49
    Any comments on the current Bitcoin position ... ? Thanks ....
    • RP
      Raoul P. | Founder
      21 October 2019 @ 19:27
      Happy to hold it...I think its a wedge pattern and goes higher. Low is most likely in but not 100% certain
  • AB
    Aaron B.
    21 October 2019 @ 15:13
    Concerning your reference to the ED Dec 21 chart. Did you intend to refer to the ED Dec 20 chart?
  • AS
    Amit S.
    21 October 2019 @ 14:59
    Being tested is an understatement when one's g*nads are being squeezed!

Mark Yusko

Morgan Creek Capital Management, Co- Founder, CEO, & CIO

Mark Yusko is the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management. He is also the Managing Partner of Morgan Creek Digital Assets.

Morgan Creek Capital Management was founded in 2004 and currently manages close to $2 billion in discretionary and non-discretionary assets. Prior to founding Morgan Creek, Mr. Yusko was CIO and Founder of UNC Management Company (UNCMC), the Endowment investment office for the University of North Carolina at Chapel Hill. Before that, he was Senior Investment Director for the University of Notre Dame Investment Office. Mr. Yusko has been at the forefront of institutional investing throughout his career. An early investor in alternative asset classes at Notre Dame, he brought the Endowment Model of investing to UNC, which contributed to significant performance gains for the Endowment. The Endowment Model is the cornerstone philosophy of Morgan Creek, as is the mandate to Invest in Innovation.

Mr. Yusko is again at the forefront of investing through Morgan Creek Digital Assets, which was formed in 2018. Morgan Creek Digital is an early stage investor in blockchain technology, digital currency and digital assets through the firm’s Venture Capital and Digital Asset Index Fund.

Mr. Yusko received a BA with Honors from the University of Notre Dame and an MBA in Accounting and Finance from the University of Chicago.

Anthony Scaramucci

SkyBridge Capital, Founder & Co-Managing Partner

Prior to founding SkyBridge in 2005, Scaramucci co-founded investment partnership Oscar Capital Management, which was sold to Neuberger Berman, LLC in 2001. Earlier, he was a vice president in Private Wealth Management at Goldman Sachs & Co. In 2016, Scaramucci was ranked #85 in Worth Magazine’sPower 100: The 100 Most Powerful People in Global Finance. In 2011, he received Ernst & Young’s “Entrepreneur of the Year –New York” Award in the Financial Services category. Anthony is amember of the Council on Foreign Relations (CFR), vice chair of the Kennedy Center Corporate Fund Board, a board member of both The Brain Tumor Foundation and Business Executives for National Security (BENS), and a Trustee of the United States Olympic & Paralympic Foundation. He was a member of the New York City Financial Services Advisory Committee from 2007 to 2012. In November 2016, he was named to President-Elect Trump’s 16-person Presidential Transition Team Executive Committee. In June 2017, he wasnamed the Chief Strategy Officer of the EXIM Bank. He served as the White House Communications Director for a period in July 2017. Scaramucci, a native of Long Island, New York, holds a Bachelor of Arts degree in Economics from Tufts University and a Juris Doctor from Harvard Law School.

Michael Saylor

MicroStrategy, Co-Founder

Mr. Saylor is a technologist, entrepreneur, business executive, philanthropist, and best-selling author. He currently serves as Chairman of the Board of Directors and Chief Executive Office of MicroStrategy, Inc. (MSTR). Since co-founding the company at the age of 24, Mr. Saylor has built MicroStrategy into a global leader in business intelligence, mobile software, and cloud-based services. In 2012, he authored The Mobile Wave: How Mobile Intelligence Will Change Everything, which earned a spot on The New York Times Best Sellers list.

Mr. Saylor attended the Massachusetts Institute of Technology, receiving an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology, and Society.

Alex Saunders

Nugget's News, Founder & CEO

Alex Saunders is the founder and CEO of Nugget’s News, a digital media company focused on all things crypto. Alex has been captivated by cryptocurrency since 2012 and in 2017 he began educating globally on the benefits of cryptocurrency and how to safely acquireit. Nugget’s News has been listed as a top-20 podcast by Business Insider, ShapeShift and Lifehacker and has over 120k YouTube subscribers with 9 million total views.Alex is also heavily focused on his cryptocurrency education platform Collective Shift which currently serves over 4,500 members. provides his unique perspectives by utilising his expertise in fundamental analysis, technical analysis and market sentiment. He is working towards his mission of making it easier for everyone to understand the financial world.

James Putra

TradeStation Crypto, Inc., Sr. Director of Product Strategy

James helped launch TradeStation Crypto’s offering which utilizes a true online brokerage model that self-directed investors and traders have come to expect for equities, futures, and foreign currency markets. He is a reputed crypto asset specialist and blockchain thought leader focused on helping people find innovative ways to participate in this space. He is active in the blockchain community with speaking engagements, TV appearances and mentoring. James has over 15 years of experience in the Fintech industry.

Raoul Pal

Real Vision, Co-Founder & CEO

Raoul Pal is the Co-Founder and CEO of Real Vision, the world’s pre-eminent financial media platform, which helps members understand the complex world of finance, business, and the global economy.

Real Vision members also have access to Real Vision Crypto, a cryptocurrency and digital assets video channel watched by over 80,000 people. In addition, Raoul has been publishing Global Macro Investor since January 2005 to provide original, high quality, quantifiable and easily readable research for the global macro investment community hedge funds, family offices, pension funds and sovereign wealth funds. It draws on his considerable 31 years of experience in advising hedge funds and managing a global macro hedge fund. Global Macro Investor has one of the very best, proven track records of any newsletter in the industry, producing extremely positive returns in eight out of the last twelve years.

He retired from managing client money at the age of 36 in 2004 and now lives in the tiny Caribbean island of Little Cayman in the Cayman Islands. Previously he co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul moved to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe. In this role, Raoul established strong relationships with many of the world’s pre-eminent hedge funds, learning from their styles and experiences.

Other stop-off points on the way were NatWest Markets and HSBC, although he began his career by training traders in technical analysis.

Peter McCormack

What Bitcoin Did, Journalist

Peter McCormack is a full time journalist/podcaster covering topics such as Freedom, Human Rights, Censorship and Bitcoin. Peter created and hosts the What Bitcoin Did Podcast, a twice-weekly Bitcoin podcast where he interviews experts in the world of Bitcoin development, privacy, investment and adoption. Launched in November of 2017, the podcast has grown to over 100 episodes with a guest list that is a testament to the diversity of knowledge and opinions that represent the broader Bitcoin community. Expanding his growing list of human interest recordings, documentaries and films Peter has recently launched the Defiance podcast and DefianceTV.

Caitlin Long

Avanti Financial Group, Founder & CEO

22-year Wall Street veteran who has been active in bitcoin and blockchain since 2012. In 2018-20 she led the charge to make her native state of Wyoming an oasis for blockchain companies in the US, where she helped Wyoming enact 20 blockchain-enabling laws. From 2016-18 she jointly spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain start-up. Caitlin ran Morgan Stanley’s pension solutions business (2007-2016), heldsenior roles at Credit Suisse (1997-2007) and began her career at Salomon Brothers (1994-1997). She is a graduate of Harvard Law School (JD, 1994), the Kennedy School of Government (MPP, 1994) and the University of Wyoming (BA, 1990).

Hunter Horsley

Bitwise Asset Management, CEO

Hunter Horsley is Chief Executive Officer of Bitwise Asset Management. Prior to Bitwise, he was a product manager at Facebook, working on advertiser products including the multibillion-dollar sponsored content ecosystem and ad breaks in videos. Before Facebook, Horlsey was a product manager at Instagram, responsible for multiple advertising products generating several hundred million dollars of revenue. He is a graduate of the Wharton School at the University of Pennsylvania, with a B.S. in economics. Recently, Horsley was named a member of Forbes’ 2019 “30 Under 30” list.

Luke Gromen

Forest For The Trees, Founder & President

Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst. He is the founder and president of macro/thematic research firm FFTT, LLC, which he founded in early 2014 to address and leverage the opportunity he saw created by applying what clients and former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America.

FFTT caters to institutions and sophisticated individuals by aggregating a wide variety of macroeconomic, thematic and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his clients. Prior to founding FFTT, Luke was a founding partner of Cleveland Research Company, where he worked from 2006-14. At CRC, Luke worked in sales and edited CRC’s flagship weekly thematic research summary piece (“Straight from the Source”) for the firm’s clients. Prior to that, Luke was a partner at Midwest Research, where he worked in equity research and sales from 1996-2006. While in sales, Luke was a founding editor of Midwest’s widely-read weekly thematic summary (“Heard in the Midwest”) for the firm’s clients, in which he aggregated and combined proprietary research from Midwest with inputs from other sources.

Luke Gromen holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University. He earned the CFA designation in 2003.

Meltem Demirors

CoinShares, Chief Strategy Officer

Meltem Demirors is Chief Strategy Officer of CoinShares, an investment firm that manages billions in assets on behalf of a global investor base, and is a trusted partner to investors and entrepreneurs navigating the digital asset ecosystem. Meltem oversees the firm’s managed strategies group and its New York office and leads corporate development.

Previously, she was part of the founding team of Digital Currency Group. As a veteran investor in the digital currency space, she has invested in over 250 companies in the ecosystem.

Meltem is passionate about education and advocacy, and teaches the Oxford Blockchain Strategy Programme and co-chairs the WEF Cryptocurrency Council.