Meeting of Minds – August 2017

Published on: August 28th, 2017

Raoul wraps up his Retirement Crisis analysis with some prescriptions for preemptive action while Julian’s piece on Europe sets the scene for a sudden change in correlation between equities and bonds in the Eurozone.


  • GD
    Gus D.
    22 September 2017 @ 01:31
    Raoul - Unsure if this has been asked before, but in surely the point of a professional pension fund manager is to scale up the cap structure (i.e. reduce equity holdings and increase bond/cash allocations) gradually as an individual approaches retirement. By saying that pension funds are maxed out from an equity allocation perspective, are you taking the view that they haven't been doing this?
  • GS
    Garrett S.
    7 September 2017 @ 03:19
    Raoul- Explain to me how Trump gets his massive tax plan and infrastructure plan without massively growing the debt and slashing rates. I think the plan would be a replay of 1987 in equities with the Feds hitting the button on another QE while politicians (wink wink) work together to pass a major tax overhaul bill. Lets not forget Mnuchin was just at Fort Knox and Trump hasn't revealed any real plans on his tax overhaul. What's that, a 3 month extension on the federal debt???? What a deal maker!!! PS the market isn't going to be buying the USD when they already know what the plan is.
  • RI
    R I.
    6 September 2017 @ 13:26
    Raoul - The US economy is currently transitioning away from the baby boomers to the millennials, such that the growth rate for the highest spending cohort (35-55 year olds) will be increasingly positive starting this year and through the next 5 years. How does that fact fit into your analysis? Doesn't that serve as a mitigant to the downside case you've laid out in this and prior reports?
    • RP
      Raoul P. | Founder
      6 September 2017 @ 23:00
      I dont think they have thr spending power to offset this yet. In due course, they will step in but they are still economically too small
  • gm
    gordon m.
    4 September 2017 @ 18:30
    Raoul - regarding your advice to not follow the crowd (sell what is popular etc), these days practically everywhere I look there is talk of the US equity markets being overpriced and ripe for a crash. Barron's even proclaimed this in a huge headline in a recent edition. So, if so many people think this, and I am only asking this slightly tongue in cheek, it is a serious question, does this then mean that the contrarian and safer view may be to stay invested ?
    • RP
      Raoul P. | Founder
      6 September 2017 @ 22:59
      I think there is room for a blow off top...
  • vt
    vadim t.
    28 August 2017 @ 19:14
    There is very little chance (I'd say no chance at all, but for an accuracy' sake...) that we'll have a bear market during the next recession. Quite the opposite it'll be the buying opportunity and the market will crash anybody who dare to short it, underestimating "whatever it takes" -tool is very expensive. There will be no crisis 2008 -style nor smaller neither bigger, no big bear market without a civil war or social disorder first and even then i'm not sure how "so called markets" will react. The will be flash-crashes or 5+% very sharp corrections here and there but it'll be next to impossible to make money on them. The next crisis will be very different it'll be huge but we gonna be very surprised how isolated "markets" will be at that time.
    • vt
      vadim t.
      29 August 2017 @ 18:45
      Turned out today is a perfect day just to illustrate the point. Free market, huh? From Marketwatch today: "Investors now think central bankers will protect us from nuclear war". Raoul, seriously, how do you see this: CBs just take a vacation and let the market fall? What's the screenplay?
    • CY
      C Y.
      31 August 2017 @ 13:55
      its nice to see the central bankers have you convinced of their omnipotence.
    • RP
      Raoul P. | Founder
      2 September 2017 @ 12:57
      Surpressed volatility leads to hyper volatility. If the central banks really did buy enough equities to stop them falling, which I think is likely at some point, then the currencies or bond markets will take the strain. In Japan they bought bonds too, so you are eventually left with the currency market, which will react in time.
  • RM
    R M.
    28 August 2017 @ 23:30
    Excellent reports, thank you. R&J: Can a US recession in the next 1-3 years be mitigated by growth in Asia and Europe, both of which are doing well? What indicators can we use to watch for Asia (China/India) potential slowdowns? Repeating a question below, as long as EEM holds over 42, is there any reason currently to Asia? Thanks, enjoying Macro Insiders!
    • RP
      Raoul P. | Founder
      2 September 2017 @ 12:55
      Yes, strong growth elsewhere can certainly extend the business cycle. It is questionable whether there is really strong growth in Asia. That being said, Im am not concerned too much yet, but like Julian, would take some money off the table. I am still long some EM>
  • SH
    Santiago H.
    29 August 2017 @ 18:37
    Hi Raoul, What's the median retirement savings held by Baby Boomers? I seem to remember ~20K (avg around ~150K BUT of course a heavy tail skews this metric). If this number is correct, do you think it's still enough to see impact driven by massive equity selling? I can picture the change in consumption patterns and the challenges the SS system faces, but I'm having a harder time trying to quantify the potential impact of equity selling. Would love your view on this. Thanks!
    • RP
      Raoul P. | Founder
      2 September 2017 @ 12:53
      That is direct ownership of equities. You need to add in pension funds and mutual fund ownership. Those too need to be drawn down on in retirement unless you are lucky enough to have more than enough money.
  • DP
    Devraj P.
    30 August 2017 @ 04:10
    What I am wondering if problems are already known would there be any way it can be solved other than triggering recession? Aren't there any options? What are they? I love to understand the other side to fully know how to play this..
    • RP
      Raoul P. | Founder
      2 September 2017 @ 12:51
      The point being, a recession is inevitable. It is a function of the capitalist system. Thus, there needs to be a discussion of when it comes, not if it comes. The only variable that is likely to change is the latter - an extended business cycle, which seems a reasonable probability.
  • TA
    The A.
    30 August 2017 @ 19:57
    Raoul, I know you read no other research. But you are so bearish... The funny thing however is I agree with your view and have had a very similar view for several years. However, I read as much other research as I can, I want to know why other people have a different vision, how is it otherwise possible to find the mistakes in my own thinking is my reasoning for doing this. On your oil special for RealVision you interviewed a few different guests but they all had the same vision. Wouldn't it be more helpful to really try to understand why smart people like Russell Clark and Jawad Mian have a completely opposite view of the world as you (on growth, oil, the dollar,...)? You told in a previous Insider Talks that you are looking at why the commodity cycle might go on longer than expected. This would be very interesting research to read. Is it because the data from EM and Europe is so strong now, does Russell Clark has a point when he said people focus to much on the US and the world is shifting more to the east which may imply that your ism business cycle model becomes less relevant to monitor the world economy. I once heard you say somewhere that you have roundtable discussions at your home with prominent macro managers, so all in all you are probably aware of the opposite visions. It would just be very helpful if you try to explain where the reasonings behing them go wrong. Thank you very much. (of course you can't write everything in one piece, I'm just being impatient)
    • CY
      C Y.
      31 August 2017 @ 13:52
      when a response starts with "I know you read no other research" you know you're about to get a real gem of a response.
    • CS
      C S.
      2 September 2017 @ 01:47
      My guess is it was a slip of the 'tongue', lol
    • RP
      Raoul P. | Founder
      2 September 2017 @ 12:49
      Thanks. What people really are paying for is our personal thought processes. If we just discuss others views then we are a aggregator and not an originator. The more insitutional level research products are all about orginal content. It is really for the reader to assimilate others views and reach their own conclusions. This is one of the reasons Julian and I teamed up, so there are some differing views without it being overly confusing. I am always cognitive of the alternative narratives and it is against that backdrop I write. As time develops you'l see when I get it dead wrong and how i deal with that and also if my framework changes. For examples, the very elevated ISM means that I cant be bearish of equities beyond a quick correction. My long term macro framework is more bearish as we are nearing the end of the business cycle and there are large structural issues at play. I'll try to write some more on my framework in the next In focus or Meeting of Minds so you get a better understanding of my thought process.
  • JV
    Jason V.
    31 August 2017 @ 08:58
    Julian, To clarify from the perspective of the retail investor, the best trade here is to short the VGK ETF (buy puts, perhaps looking around six months out - March 18?) to participate in the potential DAX fall? What target do you have in mind? Would you recommend entering the trade now, or rather waiting for the potential catalysts you mentioned, eg. spike in Bund yields above 0.6%? Also, regarding the gold trade, GDX, are you happy that overhead resistance has been cleared and it would now be a good time to enter the trade? Many thanks, Jason.
    • JB
      Julian B. | Contributor
      31 August 2017 @ 16:58
      Hi Jason that's a pretty decent way of playing it. As for timing now is not ideal since we've already seen some of the down move and underperformance in the DAX. Personally, I'd wait either for renewed highs in EURUSD or ideally a clear change in the market's growth/inflation metric that triggers a move in Bunds. As for GDX, yes it looks like we have a clear breakout. The next test is a band of resistance of previous highs that comes in around 25.80
    • JV
      Jason V.
      31 August 2017 @ 19:54
      Excellent. Very much appreciated. Thanks, Julian.
  • KA
    Kelly A.
    30 August 2017 @ 00:13
    Raoul's list of "what is going to happen" reminds me of Nouriel Roubini's work in 2007-08. Seems surreal at first, but... NR's call was prescient --and i was lucky enough to hear his domino list of catastrophe while I was on a trip in Europe. USA media wasn't playing his song until it was too late to get out unscathed. I was lucky to hear and believe and started selling at every opportunity. NR hasn't made a great call since then [to my knowledge], though. I subscribed for awhile, but it was a waste. I should check again though to hear what he has to say. Vadim T, below, makes great points, however, about CB's having to ride to the rescue and buy equities. That also makes rationale sense to me, and i really don't want to heed Raoul when it comes to selling my house now ;-). But, although i agree with Vadim's insightful point, i fear that once the panic is on with the BBs, the panic is ON. That means CBs won't have much they can do because it could all happen so fast. Perplexing. I've never looked into reverse mortgages, but perhaps it is time to hang an expensive home with some financial institutions and let them worry about a housing collapse???? Raoul, thoughts? You're the one giving us nightmares... how about a little sleeping tonic!?
    • vt
      vadim t.
      30 August 2017 @ 21:14
      If it starts happening too fast CBs just will turn off the "markets" for as long as they need. As simple as that.
  • JM
    John M.
    29 August 2017 @ 06:25
    Julian, Given your view on rates I assume you would suggest selling things like TLT? Thank you.
    • JB
      Julian B. | Contributor
      30 August 2017 @ 14:53
      Hi John, yes I do as my models suggest 2.6% on 10yrs is fair value. That said timing has been very tough and inflows into bond ETFs surprising strong. Watch the technicals
  • PG
    Paul G.
    30 August 2017 @ 03:40
    Raoul, any update on thoughts re USD?
  • NS
    Nicky S.
    30 August 2017 @ 01:00
    Raoul, I really like the line of thinking that you outlined in part 2 and have started thinking through the impact on multifamily realestate once the tide begins moving out. Would love for the group to check my logic but I'm thinking if BBs begin to sell retail houses in mass then this would put pressure on asset prices, leveraged commercial players would get squeezed again but rents could possibly rise due to demand vs inventory. This could push CAP rates higher and offer solid returns moving into the next cycle.
  • SD
    S D.
    29 August 2017 @ 18:10
    This is really great stuff. A pity that there is little to no public discussion about such a important topic for so many people. Thank you Raoul and Julian.
  • JE
    Jos E.
    28 August 2017 @ 16:39
    Julian, a question/comment. I'm a fellow Brit and your comment about low oil prices being stimulatory in Europe leaves me wondering; what is the mechanism for this? I suspect you are implying the oil price drop translates into much lower prices for petrol and therefore leaves more money in consumers pockets. However, the price at the pump in Europe/UK is primarily (80%ish) made up of taxes, so the 50% drop in oil prices mentioned (assuming passed on - which they often aren't in full) only translates into a roughly 10% drop in fuel prices. Ergo, perhaps the stimulatory effect is pretty limited. If you are talking about some other derivative impact then I apologise in advance and would love to hear what it is. Thanks.
    • JB
      Julian B. | Contributor
      28 August 2017 @ 18:11
      Hi Jos. E yes you are right the percentage of a gallon of petrol that is taxation effectively dampens the effect of swings in the underlying price of oil. However, it doesn't negate them. So from the end of 2014 until the lows of last year the price of litre of diesel fell 25-30% depending on the country and while it's bounced its still way down.
    • JE
      Jos E.
      29 August 2017 @ 07:00
      Thanks. I guess the recovery in Europe is a lot more broad based anyway so not really a significant portion of the thesis in any case
  • gm
    gordon m.
    28 August 2017 @ 16:33
    Raoul, when you say boomers should sell their equities, do you mean just US equities or all equities ? Various discussions in Realvision in recent months have recommended investing outside of the US, in recovering economies (e.g. Greece), in cheap markets (e.g. Russia), in gold and miners, and so forth. Do you subscribe to this or are you saying to dispose of all equities, of all types, everywhere ?
    • RP
      Raoul P. | Founder
      29 August 2017 @ 00:46
      Dispose of what everyone else owns and own what others dont, i guess would be the key thing. This way, you avoid being a forced seller. Also, a lower weight in equities overall becomes key, along with diversification of asset classes.
    • gm
      gordon m.
      29 August 2017 @ 02:05
      The corollary then would be to also short what everyone owns, presumably. Although timing that is tough.
  • IO
    Igor O.
    28 August 2017 @ 20:54
    Just listened Julian talking with Chris MacIntosh on his podcast. He made an interesting point in the end, that in collapse environment right stocks being store of value and medium of exchange. I'd like to see this subject expanded further.
  • DW
    Daniel W.
    28 August 2017 @ 15:15
    Thanks for outlining your Thesis Julien. In Terms of a potential spasm in higher yield in core europe, do you think it makes sense to accumulate puts now or would you wait for clearer signs - like yield > 0.6? Thank you again!

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.