Flash Update – August 10 2018

Published on: August 10th, 2018

Raoul’s framework has triggered a few opportunities that require urgent attention… Published August 10, 2018.

Comments

  • SD
    S D.
    19 April 2019 @ 02:59
    Hi Raoul I've been listening again to Bass's interviews on China during some long drives I've had to do and I think they're really significant. I'm referring to his interview with you on the currency, and also with Bannon - and it's shocking that Bannon's world view is so poorly or little understood because it's compelling, logical, and convincing. But I have two questions: 1. How do projections for the gold price play into Bass's view that an impending dollar shortage is going to cripple China. Surely they will have anticipated precisely what Bass is expecting, and they will have a mitigation strategy designed to exploit the situation, above and beyond what you two refer to - opening up their financial sector to shove a bunch of bad debt on to America's balance sheet. We don't know how much gold they have, but we do know they have masses and continue to acquire more. Why then, are countries like Canada and the UK failing to shore up their own reserves? Would a gold buying program by either of these countries be seen as somehow disloyal to the US, and the US dollar? What is the rationale for a refusal to insure a nation against currency disruption by at least having some sort of commitment to bullion of various types? This all strikes me as profoundly political, because it's so essential. 2. You seem to imply that the impending dollar shortage you've been talking about now for nearly two years may be politically motivated a la Russia. Is this correct? If so, can we please hear more about this. And about anything at all to do with expectations of how China anticipates any type of movement towards convertibility, which you guys believe is inevitable, for sound reasons, seems like. This all just strikes me as stupendously important but it's never discussed, and I wonder if that's because the mainstream media remains so adamantly allergic to anything Trump they cannot stand to contemplate the basis or rationale for his world view, and thus, the world is being deprived of necessary information to allow for preparation for what sound like a fairly seismic shift. I realise there are other factors here, but restricting the frame to yuan convertibility makes sense given the daily drip feed of news on China credit at the moment, especially in the context of trade. You have provided really essential context on these issues. Please continue to pursue this issue, it would be appreciated greatly.
  • DY
    Dmytro Y.
    29 September 2018 @ 14:04
    1.5 month later all these ideas did not work out. EEM is not down. USD is down. I have a growing frustration for MI and RV advise and ideas in general....track record seems poor. Sorry but saying as it feels
  • SD
    S D.
    17 August 2018 @ 03:06
    I was uncertain about resubscribing but your recent offerings are strong proof of value and I'm glad I did. Thank you both.
  • TR
    Todd R.
    15 August 2018 @ 17:45
    this is excellent thanks!
  • DY
    Dmytro Y.
    13 August 2018 @ 13:28
    Raoul, thanks for your last flash update. however i think this needs to be more specific. 1) Where do you see Gold going here given your USD view? 2)what liquid instruments to make your suggested trades in USD and TLT you can advise where trade can be done via liquid options, including selling options. 3rd part of this question is abt instruments with liquidity & availability of longer dated options such as 6-12 mths forward, not just very short term dated futures-options as basically is the case for TLT & UUP (short dated & also very wide bid-ask spreads). Thank you
    • DY
      Dmytro Y.
      13 August 2018 @ 13:30
      Gents (Raoul and Julian). Excuse me but a) there needs to be a forum or a way to ask the questions and to get answers. This membership is not cheap and we should be able to obtain the replies. B) targets have to be more specific. What levels in EEM you expect, what levels in USD vs EUR or etc. What vehicles to trade. Given the cost of this product the contents and advise need to be really improved.
    • TS
      Tyler S.
      14 August 2018 @ 16:39
      I agree with Dmytro y. there has to be some kind of basic interaction.
    • RP
      Raoul P. | Founder
      15 August 2018 @ 14:31
      We have been quite clear from the outset that our role is not to run anyones positions or give some tip sheet of trades. Our job is to show you the themes and the ideas that can help you make your own investment decisions. We charge $40,000 a year for open access to us via GMI and MI2, our full research service, and even there we don't necessarily chose a specific instrument for people, they follow our themes and recommendations and choose their own risk profile. MI has many subscribers of different skills and knowledge and its impossible to take those into account. Many people have differtent brokerage accounts too - some like Saxo and IB allow for more complex trades and others dont. We are as specific as we can be considering all of this. We are going to be creating a larger forum for discussion but again, Julian and I arent there to answer every question that thousands of people have, as its just not feasible nor desirable. I hope that explains things a bit.
    • TB
      Tim B.
      15 August 2018 @ 17:17
      Hi Raoul, That EEM trade is off to a brisk start! Thanks MI. I'm glad to hear you're looking to create a larger forum for discussion. As great and as revolutionary as the RV world is, I for one certainly feel that a richer environment for cross-pollination among subscribers would help in enabling smaller subsets of the RV subscriber base to collaborate and share ideas. Cheers
  • TA
    Talib A.
    13 August 2018 @ 18:45
    thanks Raoul what is your view on gold if this is the case ? I remember once you mentioned USD and gold MIGHT rise together ! however, this wasn't the case ! im wondering if there is anything to do to hedge gold position( bullion) as USD heading higher . dispite gold being as insurance policy ... losing that much % in just few months is quite awful
    • RP
      Raoul P. | Founder
      15 August 2018 @ 14:33
      Julian gave a great trade idea in a dollar hedged Gold trade, that might well be your answer. For GMI I have been long gold vs a basket of non-dollar currencies for a while. It hasnt really performed but hasnt lost money yet either
  • RK
    Robert K.
    12 August 2018 @ 18:50
    FYI: Betting on USD strength was something I've jumped on earlier. What worked for me so far is going long USDZAR. There are more factors which will make this pair fly further (I am still in it). Note: this pair is extremely volatile - but very tradeable.
    • RK
      Robert K.
      13 August 2018 @ 17:34
      I am proven correct often but not this fast ... (look at the USDZAR action).
  • PM
    Philip M.
    12 August 2018 @ 07:13
    How to size? on a typical fx trade, 8-10x leverage / 1% of portfolio stop? Or do you measure with ATR? And if trading outside majors? Would also appreciate more charting advice for trade management. Thanks for all the great content...
    • RK
      Robert K.
      12 August 2018 @ 18:52
      I would suggest that "being all in" with max 3x leverage. Risk only 2% of your NAV. 10x leverage is bananas.
  • MB
    Markus B.
    12 August 2018 @ 10:46
    Raoul, thanks - very helpful. Would you recommend a short position in gold and metals as well?
  • SR
    Steve R.
    12 August 2018 @ 08:03
    Having just read/analysed a whole shed load of data over the past couple of days, I now tend to think Raoul's view on US Bonds may be the right one. This is also supported by recent work from Peter Brandt (technicals) and Charles Gave (fundamentals). With the rest of the world slowly falling behind the US, when the US does finally crack, where else are investors going to park their money? I would argue, a large amount will head straight to US bonds in an instant.
  • RM
    R M.
    10 August 2018 @ 18:19
    Thanks for posting, Raoul! What about $Yen, you have mentioned this in past?
    • RP
      Raoul P. | Founder
      11 August 2018 @ 08:37
      Im still not clear on it so best leave it for now
  • RS
    Rajesh S.
    10 August 2018 @ 19:12
    Not Comfortable shorting EEM. Is there any other instrument that can express that view. Looking at option a put spread.
    • B
      Bob .
      11 August 2018 @ 07:26
      EUM is a -1X of EEM It is clean and easy, and liquid. It has an annual expense of .95%. Proshares also has a -2X and -3X version if you are so inclined.
  • LM
    Lawrence M.
    10 August 2018 @ 22:15
    Thanks Raul! I appreciate you including an ETF option (UUP), I know ETFs aren't always the best way to handle a trade but It's much easier for someone like me (never traded currencies, can't trade currencies with my broker, don't want to pay monthly fees to Interactive Brokers / some others). Just adding some more UUP is simple enough for anyone :)
    • AS
      Armando S.
      11 August 2018 @ 00:10
      ETFs are certainly easy to use. If you have views on the dollar and trade them from time to time, you might want to consider a cheaper option at some point down the line. UUP expense ratio is .79% on a low vol, unlevered exposure, so you need a lot of it at that fee to have any impact on your portfolio. (And at around 6% vol, the dollar might move a few percent--the fee will eat a lot of that.) You mention IB, where you can trade the same underlying USDX futures contract that UUP wraps, at something like $2 per contract (nearly $100k notional exposure per contract)--much cheaper. These are also tax efficient for short term trades (in Raoul's case, a 3 month horizon). There is no monthly fee at IB except for very small accounts that are also very inactive with trades.
  • YJ
    Yvonne J.
    10 August 2018 @ 17:59
    I am not comfortable shorting FX yet so what do you think UUP instead? Thanks much!
    • EF
      Eric F.
      10 August 2018 @ 19:50
      Well it’s not a short but is a recommendation. Raoul also says it could retrace so maybe look at the chart and set yourself an entry price with alert. I haven’t checked options but alternatively buy a call? You then limit downside but have open upside. Really wish there was a forum where we could take Raoul’s (and Julian’s) trade recommendations for further discussion.
    • AS
      Armando S.
      10 August 2018 @ 23:42
      Raoul mentions UUP as an option in the piece. All FX trades are pairs--long one currency vs short another. UUP is simply a wrapper around usdx futures, which is long the us dollar vs short a basket of currencies. If you make a dollar trade, you must be comfortable with shorting something :) Probably the most efficient way for a retail investor to implement long USD/short other currencies is with currency futures. Though I would not really recommend this to a retail investor who is not comfortable with leverage, position sizing, risk management, portfolio construction...
  • MH
    Marc H.
    10 August 2018 @ 17:25
    Why can’t Trump have his weak dollar? It would make US exports cheaper and foreign imports more expensive, which would likely decrease trade deficit. It might blow up the budget deficit since It may deter purchases of treasuries down the road but I don’t think he cares about that.
    • EF
      Eric F.
      10 August 2018 @ 19:52
      My take Marc is he can’t have it because his actions are inconsistent with achieving this. It’s maybe what he wants but talking it into existence is not enough.
  • SD
    S D.
    10 August 2018 @ 17:33
    Thank you Raoul.

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.

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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.