Meeting Of Minds – September 2018

Published on: September 28th, 2018

In September’s In Focus, Julian returned to his Liquidity analysis and his framework for examining vulnerability in bubble stocks. He examined classic bubble patterns and highlighted Netflix as a candidate to short. This week he followed up with a Flash Update for Amazon. Meanwhile, Raoul re-examined his framework for assessing both USD and US bonds. He sees the current decline in the USD as a brief correction in a bullish trend but is hesitant to say the same about bonds as they are currently testing key levels on his “chart of truth”.


  • AP
    Alfonso P.
    5 October 2018 @ 13:53
    comments on interest rates and TLT would be useful
    • PC
      Paul C.
      22 October 2018 @ 09:30
      Hi Alfonso P, I'm currently short TLT. I'm loving the correlation between historical TLT v ISM: Prices Index - great leading indicator for TLT. Also chart the historical TLT v the 12m Ave of the Monthly rate of change of the Fed Funds Rate - again spot on correlation. If you chart them & also factor in the Fed's Dot Plot it suggests that the TLT will rise to test resistance at around the 115-1117 area until the end of the year. From then on, the charts suggests TLT should trend lower to test support of round 107 towards the end of 2019... Where the business cycle could break?
  • BD
    Bryan D.
    5 October 2018 @ 06:25
    Great piece on the US China relationship at the moment. Its really hard to see how this gets any better before it gets worse as they both think they have the upper hand.
  • ag
    anthony g.
    4 October 2018 @ 18:58
    The current yield on the US 10 year Treasury is about 3.20 % . This takes it over the long term channel on the high side. Comments re earlier expectation of lower rates would be useful ?
  • SV
    Steven V. | Contributor
    29 September 2018 @ 18:25
    Long-term bond yields would be falling if not for the speculative short interest on Treasuries. QE caused short-term yields to fall and long-term yields to rise, which is easily seen by using the FRED database to chart 10-year Treasury yields against the Monetary Base. In the latter half of QE1, QE2 and QE3, long-term yields rose. In between, long-term yields fell. As the Fed engages in QT, short-term yields should rise, and they are, and long-term yields should fall, but they aren't due to the speculative short interest. If the Fed were to completely unwind their balance sheet, which they won't, they could drive long-term yields to zero for an extended period of time. What I don't get is why everyone thinks long-term yields have to rise. Clearly they don't understand QE/QT, our monetary system, or how the Fed broke the inflation-creating mechanism in our economy back in the mid-1980's. If the speculators are doing this to keep the yield curve from inverting, then I understand. Otherwise the speculators are fighting the Fed's unwind, which will lead to the biggest short-squeeze in the history the Treasury market and will validate RP's view.
    • TM
      The-First-James M.
      4 October 2018 @ 12:56
      I don't understand your assertion that QT should result in long term treasury yields falling. Surely by not being in the market buying via QE, one major source of treasury demand is not present. This implies potential for yields to rise, not fall. If the Fed are just holding treauries to maturity and allowing them to run off their balance sheet, i.e. QT, baring a surge in external (non-Fed) demand for new issues of longer dated treasuries, I can't understand why you assert that longer dated yields should fall under QT. What am I missing in your analysis?
  • MB
    Matthias B.
    4 October 2018 @ 12:44
    as the 10y & 30y US yields have rallied through important levels (eg 30y now above the infamous 3.23%), is that now the rallying which would indicate the path to the next recession? if so, what is the historical context suggesting how far up it can go before reversing again (history does not repeat but it rhymes)? or is the current situation rather a usual seasonal pattern amplified by the dollar shortage that base swap and 3-mth forward hedging costs have substantially increased? I know many questions but I reckon that with yesterday's and today's yield move, we may have now entered a very interesting period
  • AM
    Alonso M.
    1 October 2018 @ 18:17
    Nice work.
  • GH
    Gary H.
    1 October 2018 @ 14:02
    What's with the stale charts of 2,5, and 10 year rates? Looks like Raoul posted charts from a month ago?
  • MW
    Marco W.
    1 October 2018 @ 01:22
    One more affected sector apart from internet: financials. US is likely having service surplus with China (investment banking and auditing). One can check the IPO sponsors of mega Chinese companies listed in Hong Kong in the past two decades. The sponsors usually consisted of China and US banks. For example, CLSA, GS and MS in The recent Xiaomi IPO. Discounting the divorce could be part of the reason why Financials underperformed while interest rate rising. PS: a recent incident of China AI propaganda reported by South China Morning Times ( Quote: [It was an outright lie,” Wang wrote in his Zhihu post on Friday. “The day may come when AI can actually understand natural languages and we lose our jobs, but it’s definitely not now.”]
  • RM
    R M.
    28 September 2018 @ 16:51
    Excellent, thoughtful pieces. Julian: The shift away from China may prove very advantageous to Japan, which will more tightly align with the US while offering competition to China across growing Asian markets. Japan also has no fear of robotics as their popultion is aging and capital is available. Thoughts? Agree Mexico and Vietnam will benefit long term as well.
    • JB
      Julian B. | Contributor
      30 September 2018 @ 12:24
      RM I think you nailed the benefactors. If this deteriorates over time to a full pseudo Cold War world, I believe we end up dividing the world into friends, foes and third parties. India potentially into that latter group. My hope is she moves to the West and I believe she is already poised to win some major contracts at the expense of China.
    • HO
      H2 O.
      30 September 2018 @ 23:28
      I am somewhat more constructive about the coming Cold War because it is about competition to build infrastructure in proxy countries, which promotes trade and other forms of engagement to net our the negatives. The US (yes, the US) Europe, Russia and India are all thinking about how to build up their respective backyards, or those in their perceived spheres of interest, and this is much better than arming rebel factions (Contras, etc). There may be some of that, too, but I think the optimistic view is worth considering.
  • AM
    Anja M.
    30 September 2018 @ 13:50
    Both sections are truely enlightening! Concerning Roul's analysis of the situation in Europe and Germany's position within, I would like to point to the 'Agenda 2010', developed in 2003-2005 under Chancellor Schröder, which greatly supported Germany's economic development. Agenda 2010 is a series of reforms by the then German government, a Social-Democrats/Greens coalition, which aimed to reform the German welfare system and labour relations. The declared objective was to increase international competitiveness, promote economic growth and thus reduce unemployment. These policies were economically successful, albeit eroding the middle class and thus laying the foundation for the rise of AfD, the new nationalistic / right-wing political party. Other European states, such as France and Italy trying to adopt this strategy failed due to union's opposition.
  • RK
    Ryan K.
    30 September 2018 @ 02:21
    This is one of the best pieces I've read. It provides a backstory to help those of us who are newer to macro and lays out the current world we're playing in. I would love more pieces like this.
  • MW
    Marco W.
    29 September 2018 @ 04:31
    Marvelous from Raul and Julian. One of the key conflicts in Chimerica is the AI bubble/propaganda. It gives infinite imagination and causes undue confidence and fear on both sides. The reports of huge AI investment race as well as revolutionary impact of AI appears in media from time to time (google "artificial intelligence magazine cover"). Then here is Spyos Makridakis's tweet ["When AI will reach the intelligence of a one-year old?” My own prediction: After a very, very … LONG time!]. Once the bubble burst, people will have clear and calm mind. After all, AI should be more about intelligence than speed. We mostly see information collection and (cloud) computing capacity buildup more than intelligence buildup. The cloud computing is quite similar to optic fibre in 2000.
  • HO
    H2 O.
    28 September 2018 @ 16:58
    For the chart on crude futures volume, can you post the bberg tickers please. Thanks.
  • RM
    Richard M.
    28 September 2018 @ 15:28
    Raoul/Julian, great pieces about "big picture" topics. Long term ideas to keep in the back of our minds as we try to play shorter term ideas.
  • ag
    anthony g.
    28 September 2018 @ 14:09
    sounds about right.

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.