Bubble Stock Watch

Published on: September 14th, 2018

Two spigots of global liquidity are being turned off: Central Bank QE and Global FX Reserve Accumulation. Patterns to watch in the bubble stocks as the bathtub drains.


  • AM
    Alonso M.
    20 September 2018 @ 15:49
    I noticed CACC is on Julien's list of symbols. This fits well with Raoul's recent comments on the auto sector. I took a few minutes to read through the company's 2017 annual report. I thought it was quite informative as the first 10 pages or so discuss the company's experience with past cycles. It seems to me CACC has materially grown its full recourse loan book over the last couple of years, which I see as much higher risk than their dealer financing business where they are relatively well protected against loan losses. Has anyone else looked at this? Am I interpreting this correctly?
    • MH
      Marc H.
      26 September 2018 @ 16:28
      In re CACC, Real Vision TV has a video from Max Wolff from four or five months ago where he talks about auto finance, check it out. The gist is if 18 to 19 million units are sold it implies selling to folks with poor credit, and if gas prices go up and wages don't really, and interest rates go up and if you check the quarterly NY Fed Reserve report on auto loan delinquencies you can get an idea if things are happening
  • DB
    Daniel B.
    22 September 2018 @ 04:58
    Hi Julian, I find myself reading your piece for the forth time to find anything relating to the impact CNY oil contracts could have on USD demand. What’s your feel on this situation, are the repatriation of USD and FX reserve flows far greater than the CNY oil contract? My view is that as long as oil (both WTI and Brent) is strong that’s an indicator the demand for CNY contracts are not that big a risk to the dollar bull theory. Does that hypothesis hold merit? Thanks PS: love your’s and Raoul’s work
    • JB
      Julian B. | Contributor
      25 September 2018 @ 19:51
      Hi Daniel Ultimately, the threat to the dollar's dominance posed by CNY denominated oil is considerable but so far its only a very small piece of the pie. It will take many years for the CNY to rival the dollar not least because they need to run a current deficit and open their capital markets. If and when the CNY clears those hurdles then yes we will be on our way to a multipolar reserve system. Short term the biggest risk to the $ from the Chinese would be for them to start unloading their treasury holdings as part of an escalating trade spat.
  • RM
    Richard M.
    15 September 2018 @ 16:08
    Julian, excellent piece. Very thought provoking. One question, as I was looking thru the charts of your selected shorts the issue you have listed as RDIB could not be found. Is there a misprint on the symbol name? Many thanks, Rick.
    • JB
      Julian B. | Contributor
      19 September 2018 @ 18:25
      Hi Rick...its READING INTERNATIONAL B Shares
  • km
    ken m.
    15 September 2018 @ 03:50
    Just outstanding, as always! Appreciate your taking the time to explain things so clearly. That is probably not easy for long-time professional experts to do. But, to me, this (along with your very specific recommendations and specific ways to look for confidence in a position) is what makes Macro Insiders worthwhile. One question I have is where default plays into this overall picture. I certainly see the pressure you have mentioned on EM and EM currencies (and have benefited from following your recommendations to be short). But, what if - instead of trying to repay US denominated debt, these countries do what they have done in the past....and simply default. I assume it would hurt EM even further and that US equities would start to feel the pain, but what does that do to your strong dollar assumptions?
    • JB
      Julian B. | Contributor
      19 September 2018 @ 18:05
      Hi Kenneth...have you been reading Russell Napier https://bit.ly/2OBOTev ? He is brilliant and in fact I think in the case of Turkey he might be broadly right. However, ironically the debt most at risk is the local currency debt and not the $ denominated debt. History shows us that when it comes to $ debt, which is usually subject to UK or US law, creditors have a horrible habit of seizing overseas assets planes, boats, ambassadorial residences when debtors try and default. However, together with my concerns about US/Chinese trade (I'll be writing about this next week), I am worried that if Turkey does try and walk away it could really undermine the whole EM story. Short term it would certainly hit EM and yes eventually even US stocks. However, for me all that does is accelerate the $'s strength as cash is repatriated back to the US by investors as they liquidate their holdings.
  • DD
    Donal D.
    18 September 2018 @ 03:37
    Julian, Excellent piece and whilst I had appreciated the implications of QT the impact of Reserve Accumulation was new to me: I have a few questions which hopefully you or one of the other readers can shed some light on: a) You suggest shorting Netflix with a potential 3:1 ratio. Would taking out a long dated put option also be a good alternative?. As of Sept 18th the cost of a $350 June 2019 Put Option is about $45 or $4.5/share. b) You highlight potential concerns with a number of high flying stocks so would you consider going short the NASDAQ using the PSQ ETF? Thanks again for a great piece really enjoy reading your contributions.
    • JB
      Julian B. | Contributor
      19 September 2018 @ 17:49
      Hi DD Re the option, thats not a bad idea at all and you could possibly even lower the sprike to $325. In general what you want to remember is that the "Bust" or sell off phase of a bubble is the least scripted chart wise. Sometimes the drops can be fast ie DDD or slow as with the Nikkei in 1990. So while they all eventually fall you want to give yourself time, which this does. As for the ETF I've never actually used that particular ETF (have any other readers?)

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.