Dollars and Debts

Published on: December 20th, 2019

Sometimes Julian and I see things differently; it’s part of the value of Macro Insiders – honest debate and different time horizons. As I am still long, I want to give my views on the dollar and also add some comments about what the hell is going on in credit and funding markets!


  • JW
    J W.
    7 January 2020 @ 11:13
    Thanks for another compelling analysis. I am wondering however whether you are staying away from equities completely or whether you see opportunity for certain sectors. Even if this thing will fold it it likely that certain sectors will continue to grow - healthcare, 5G, IoT, some consumer stocks (people will continue to eat & drink).
  • SS
    Steven S.
    28 December 2019 @ 01:43
    "Sometimes Julian and I see things differently; it’s part of the value of Macro Insiders – honest debate and different time horizons." ...this is one of the main reasons I subscribe to MI. The presentation of differing viewpoints, coupled with thoughtful debate is a precious commodity.
  • JW
    Joel W.
    20 December 2019 @ 20:23
    Raoul, I think you’re right that you and Julian will both be right. My $0.02 is that the dollar will weaken for ‘a while’, then strengthen in a hurry Q1 or Q2 next year. Also, I’d like to take advantage of the corporate debt situation you describe, but I’m not sure how to best do so. Is it as simple as shorting an ETF like JNK, or is there a better way?
    • JW
      J W.
      21 December 2019 @ 07:33
      OK OK .. I changed it .. :-)
    • JW
      Joel W.
      23 December 2019 @ 23:54
      Thanks braddah. You’re clearly the better man.
  • AH
    Ali H.
    21 December 2019 @ 08:12
    Fantastic analysis Raoul.. Could you clarify the comment on Bull steepening. I would have thought JPM would move to short dated not long dated Bonds to take advantage of the expected FED cuts.. slightly confused as to which part of the curve will give you the most juice for the next recession.. Thanks
    • RM
      Richard M.
      21 December 2019 @ 17:40
      Raoul, I am confused too! I thought a bull steepener was when short-term rates are falling faster than long-term rates - implying the bigger percentage move would be in the shorter dated paper. Please help me understand where I am wrong. Many thanks!
    • JQ
      JACK Q.
      22 December 2019 @ 06:33
      Pls correct me if i'm wrong - but my thought is, your front end still outperforms. But from bank's perspective, funding comes to mind and with 2s @ 1.6x depending on your funding cost its extremely expensive to hold - O/N UST repos trading roughly at or thru that level. So if you move to long end, you're still going to get some carry minus your funding but at the same time benefit from yields going lower :)
    • AP
      Adam P.
      23 December 2019 @ 21:29
      Think of it this way: If yields on the 2's and 10's both fall 50 bps at the same exact time, you'll get better performance out of being long 10's because of the duration. The price move will be compounded over 10 years instead of 2 years. If you are using a product like TLT to go long duration, we're talking 20+.
  • JL
    J L.
    21 December 2019 @ 13:23
    how do members see a long of 2Y at 1.64 for Q1 and Q2? seems the chances of a hike are literally zero before election after powell went full chicken. Sustaining any hikes over time will prove tough as well, while the upside of them having to cut down to 50bp or lower is considerable
    • JQ
      JACK Q.
      21 December 2019 @ 13:53
      still don't prefer outright long 2s - preferring 2s10s steepener more here
    • GP
      Geoff P.
      21 December 2019 @ 23:06
      FWIW, I think rates go lower. I like 2yrs with excess cash while directing the entire 2 years worth of coupon into 1 yr plus calls on ED contracts. Based on my strikes, it's about a 40% return (on the face value of the 2 year notes) if EFFR gets to 35bp at expiry (meaning no option premium left). It's not a high conviction trade, but I'll wager the income on cash that rates go lower. If I'm wrong I lose the opportunity cost of a higher returning asset or at best inflation. Since I feel inflation is much less probable than deflation, it's a good risk / reward for me.
  • HK
    Hendrik K.
    20 December 2019 @ 19:21
    Did not Druckenmiller just said on Bloomberg he is selling the long end of the Curve or am I mistaken ...
    • AH
      Ali H.
      21 December 2019 @ 08:13
      Yes he did.. short duration was his trade
  • GP
    Geoff P.
    20 December 2019 @ 22:29
    I've never seen so many identical charts across assets classes. Every asset appears to be keying off this fake Fed stimulus. Even CCC is inoculated. When the market figures out that the Fed isn't actually providing the underlying liquidity they think it is, there will be a serious vacuum. 1H next year is going to be make or break for this bullish psychology of traders to permeate into actual business decisions. Razor thin. Thanks Raoul.
  • wj
    wiktor j.
    20 December 2019 @ 21:25
    Awsome work guys Perhaps you guys could include the move index also. In your next analysis.

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.