RIP Corporate Capitalism Update: That Was Quick!

Published on: May 28th, 2020

A few months back, Julian wrote a two-part series published in Macro Insiders called “RIP Corporate Capitalism.” In it, he looked at how some favourable long-term ‘tailwinds’ that had benefited equities since the early 1980s might be starting to reverse. Julian specifically identified Globalisation, Demographics, and Laissez-Faire economic policies as all reaching high-water marks where it was reasonable to expect past tailwinds to turn into future headwinds. Well, rather like what happened when he wrote on the theme of US/China trade relations (“Chimerica: When Love Breaks Down”, September 28, 2018), these issues have come into play much sooner than Julian imagined at the time of writing.


  • JW
    Jim W.
    31 May 2020 @ 14:47
    Julian (or possibly Harry), reading through this, it sounds like there are a couple of reasonable speculations to make. There will be a "fur us" group in the US sphere, including Japan, UK, Oz, Taiwan and a few nations in Europe that have developed stronger defense ties over the past several years with the US. Those supply chains will deeply integrate, but the demographics are not very good across the group. India could be the wild card, depending on how things develop, as China pokes them over the border. Does NATO continue? With the increased needs of the Germans to depend on the Russians for energy, I wonder... It also sounds like big companies are where the advantages are going to be in the next cycle, as they have the ability to deliver into government contracts and also the ability to deal with an ever increasing set of regulations. Based on some of the commentary, it looks like the tech giants of the net are going to have some real issues, though that doesn't mean a breakup of, say, Amazon, would be bad for shareholders. The question I would ask is "what companies did well in Japan during the zombification period", and start with those sectors. (I did a quick google, but no answers obvious). "Zombie Creation" might be another RV theme like "Recession week" that could be very educational.
    • HM
      Harry M. | Real Vision
      2 June 2020 @ 13:17
      Jim, I am asking a colleague who is an expert on Japan your question. I think your speculations are on the money. I own an Australian rare earth company called Lynas (I have done very badly with it) but I noticed that the company has just won a contract with the US to create a processing center in the US. I think this is precisely the kind of thing you are talking about. Re NATO, I would assume it continues, but the tension it sets up with Germany interest in Russian energy is very much in evidence (NordStream).
    • HM
      Harry M. | Real Vision
      2 June 2020 @ 13:53
      My colleague who is a Japan specialist gave the following answer. "As for sectors that did well: Tech, autos, auto parts, telecoms. The one thing they have in common is that they were not dependent upon bank financing--they had direct access to capital markets--and they generated a lot of cash. " And re: breakup risk, I agree entirely. I have promised myself to buy Amazon on a DoJ breakup. I imagine it will be similar to Standard Oil.
  • J
    Jim .
    1 June 2020 @ 16:08
    Julian, from your writings to God’s ear regarding the end of Crony Capitalism -privatizing the profits while socializing the losses. The question is -Will the Fed get the message? I was astounded (but I guess not surprised) when Powell said on Friday with a straight face that “Fed policies “absolutely” don’t add to inequality”. The Fed expands its balance sheet by $2.7 trillion, buys corporate and junk bonds via ETFs (so far) and US billionaires are $434 billion richer since the shutdown, while small businesses (the job creation engine of the US economy) are closing down, many permanently, and 40 million hard working Americans are forced to file for unemployment insurance due to a government directed shutdown of our economy. I yearn for the days when we become a capitalist economy again and I am referring to the version of capitalism In which “capitalism without failure is like religion without sin”. Call me a skeptic as I am not holding my breath. Anyway, great piece as always and apologies for the rant.
  • JS
    Jim S.
    30 May 2020 @ 03:51
    Great Julian, you never disappoint. So how should we position this? I’m not sure that picking a sector would be prudent here, but picking companies that will be instrumental to shoring “US” supply chains (using US broadly here) could be important. My mind thinks of Intel, Qualcomm, Micron, US based steel... any well capitalized manufactures that already resides in the US may get “first mover” advantage... but never moving? Thoughts? Please feel free to tell me how wrong I am too.
    • HM
      Harry M. | Real Vision
      31 May 2020 @ 14:38
      Pending JB looking at this I will note you seem to be on the right track. JB also mentioned basic materials sectors and the cheaper commodities. Ultimately, producers need to be incentivised to produce. Thats true for farmers, and its true for onshoring chip producers.
    • JS
      Jim S.
      1 June 2020 @ 03:58
      Thanks Harry, yes I put some positions on in HCC and MSB per JBs recommendation on XME when it was really beat up about a month ago... Great call and advice by you all. Also, I just saw this tweet on a WSJ article on Semi Lobbyists looking to shore up US Supply supply chains. Thought you all might like it if you haven’t read it yet.
  • MT
    Max T.
    31 May 2020 @ 10:21
    Wonderful piece Julian. We are in the midst of such substantial change and while fascinating it’s also a bit worrying to see how this will play out. As always there will be winners and losers but I don’t see many winners on the whole from what we’re going through. Given recent events, I can’t help but remember your comments from past videos about bullets being the true metal to own at the end. I hope we’re not heading that way. I can’t see who this is good for as a shareholder. As a bond holder it seems you’re destined to be made whole but I don’t see much return.
  • RM
    R M.
    28 May 2020 @ 19:33
    Julian's pieces are always thought provoking. Like many who can afford MI, I received more personal benefits from "unbridled capitalism" than negatives. I watched (from a level below) the C-suite take most of the benefits for themselves. They outsourced relentlessly, off-shored aggressively, and in general took the broader population in the USA for granted. It would be welcome if the pendulum swung back a bit. The issue off AI/Robotics/3D printing looms ahead. On the one hand, it may prove to be the next transformative wave that gets us out of stagflation by greatly enhancing productivity (Lacy Hunt briefly touched on tech transformation in his recent excellent interview). On the other, if Jeff Bezos and his ilk are the primary beneficiaries of the all this new tech, the general population is screwed. I have no idea what the outcome, but it seems to me politics will play a crucial role in the "who benefits from the new tech?" arm wrestling. In the meantime, I am in on the some of the stagflationary trades, Silver was an excellent call.
    • HM
      Harry M. | Real Vision
      29 May 2020 @ 15:59
      Totally agree. The Chinese have a curse "may you live in interesting times". Seems to me that politics is set to be "interesting" for some time.
  • MS
    Michael S.
    28 May 2020 @ 15:36
    What I don't understand. Is why in the world, there is still some debate in the investment community around owning physical gold ? All the things you pointed out, in my mind, will lead for confiscation of paper assets direct or indirectly via the tax code, meaning "If it has a CUSIP, it can (will be) be zapped". Any even physical Gold presents challenges, as you need to buy and sell it via dealers. Strict reporting of buys and sells will be logged by them in-order to remain in business. And yes, the scenarios above, will eventually lead to ownership of lead and brass. My guess, is actually like in other times of desperation, there will be a long and terrible war OR a massive arms race and beefing up of production for a "hot war" that never gets fought with China, but lasts for decades..
    • HM
      Harry M. | Real Vision
      29 May 2020 @ 15:58
      I think a lot of people see a reason to hold some physical. Problem is it can get inconvenient to hold a lot of physical. Insurance, custody etc. That said, I for one remember the 1933 Executive Order 6102, which forbade the "hording of gold", and empowered UST agents to inspect all bank safe deposit boxes.
  • JG
    Johan G.
    28 May 2020 @ 14:23
    Wow Julian, that is what I call disruptive! What you are describing here is no less than turning the world we know upside down! What about stranded assets? For most companies their assets are a complex mix of hard assets such as plant and machinery, and soft assets such as people, business models, brands etc. All will change in this scenario, and the balance sheet losses of corporations will be formidable, and global in scope. It takes time for corporations to adjust, and change is now so rapid that corporations cannot possibly adapt quickly enough in my opinion. Could we see a 'permanent' reduction in the global economy supply capacity? Change is so rapid that supply curve shifts downwards?
    • HM
      Harry M. | Real Vision
      29 May 2020 @ 15:55
      Forgive me for answering for JB, but I know he will eventually adjust my reply if I get something wrong. Yes, massively disruptive, but normally the pace of disruption would be variable. The pressure to shift supply chains is very obvious at this stage. When Julian first wrote about it (2018 I think) it was not so obvious. But I think the cost of shifting supply chains will be very high but partially mitigated by automation when the shift is to the US. Often the shift would be too a US ally state like Mexico. Disruptive and will require substantial new investment. I would argue that we will see disruption, and it will be inflationary at the margin, but its hard to imagine a contraction in global supply. Simply cos where the US experiences direct pain from forcing supply chain shifts they will act to mitigate that pain limit the speed of the transition.
  • WM
    Will M.
    28 May 2020 @ 15:12
    Julian, what do you mean by Margret Thatcher "dropping the flag on unbridled capitalism"? Is that a reference to her ending union domination of UK industry and freeing up the beginning of financial corporate capitalism?
    • WM
      Will M.
      28 May 2020 @ 15:22
      Sorry I hadn't finished reading the letter and it became clear later in the missive. Thanks.
    • HM
      Harry M. | Real Vision
      29 May 2020 @ 15:42
      Julian is a Formula 1 fan.
  • PM
    Philip M.
    28 May 2020 @ 16:04
    I can't wait for Amtrak Airways

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.