Flash Update – April 20, 2020

Published on
April 20th, 2020
Duration
8 minutes

Ask Me Anything with Raoul – April 10, 2020 (LIVE)


Flash Update – April 20, 2020

Insider Talks ·
Featuring Raoul Pal

Published on: April 20th, 2020 • Duration: 8 minutes

Raoul Pal has a quick update for Real Vision Pro members on the extraordinary price movement in oil markets today, driven by COVID-19. Raoul believes how this once-in-a-lifetime event points to his thesis of how the market narrative of a strong recovery is wrong, and he sees that June futures contracts will eventually be trading lower as well as it is more likely that the recovery will be slow and labored. He also talks about what this price movement in oil means for other parts of the market.

Comments

  • RW
    Robert W.
    27 April 2020 @ 08:45
    Quality near movie quality video. Much better
  • DE
    Daniel E.
    22 April 2020 @ 23:02
    Hi Raoul, what are your thoughts on GDX breaking above $32 today? I believe you mentioned that you were looking for these levels to be reached before you'd consider going heavy into a position here. Would love to know more of your strategy and what you are doing here.
  • SK
    Srisaila K.
    22 April 2020 @ 14:30
    Raoul, thanks for the update. Is it true that the oil storage is still not full but there is no storage for lease available? Is there any model/data set to predict how long this oil glut will continue? Thanks
  • AB
    Arawata B.
    22 April 2020 @ 10:50
    Is there a 'Petrodollar' system without the 'Petro' ?
  • MJ
    Matthew J.
    22 April 2020 @ 07:54
    Raoul, many thanks yet again for the update. Oil an indicator. Wave 4/5 or straight to Insolvency Phase? I may be bringing the narrative to a excessively short time scale, however: On today's (21st Apr) Daily Briefing discussing oil as the leading indicator of the real economy and the market coming down to meet the real economy in due course physical first (thanks for the tweet), Ed Harrison said with regards to the Insolvency Phase, "that is where we are going right now, oil is telling you that we are there, yesterday marked the day". - Liquidity Phase - Has the Fed cut short the liquidity phase (so no wave 5)? - Making this 'wave 4' rally the Hope Phase? - Is shear demand destruction going cut short the Hope Phase . - So perhaps we get a super compressed 1929 cycle hope phase, heading straight into insolvency due to the extent of the situation. - The Fed Can't save everyone etc. How does that sit with what you are seeing? P.S. Constantly amazed by the quality, timing and delivery of key topics and perspectives by yourself and your highly talented team.
  • MB
    Matt B.
    21 April 2020 @ 13:09
    Why specifically would oil producers still pump like mad at loss-making prices? Explain more on this...?
    • EO
      Elena O.
      21 April 2020 @ 14:54
      my flatmate is an ex-Shell economist and she said that it is actually very hard for oil producers to slow down pumping, i.e. reduce the pressure of oil coming out, let alone all together stop. Full stop means abandoned oil in the ground. So it's actually the last thing that oil companies will do before all else. Also, to decide which wells to fully stop takes time and engineering effort. Its not switch on/off type of biz.
    • JB
      Julian B. | Contributor
      21 April 2020 @ 22:29
      Just to add a little colour. While neither Raoul or I generally discuss single stocks. This inability to turn off oil production is why I mentioned oil tanker company stocks in the last video.
    • AW
      Agus W.
      22 April 2020 @ 05:18
      thanks Elena for the info, besides the technical reason to keep the oil wells pressured(ie pumping), there is supposed to be a financial reason for doing this also, but I do not understand it at all, if someone will be kind enough to explain it please.
  • LH
    Luis H.
    21 April 2020 @ 23:29
    I believe that the negative oil price situation will reverberate in the mind of many persons and will make them question if the shares they own will actually have any meaningful value. That may be a turning point (for the worst) in the current crisis.
  • MD
    Matthew D.
    21 April 2020 @ 16:41
    Thanks for the timely update Raoul
  • WW
    Will W.
    21 April 2020 @ 13:22
    What is the risk or opportunity of seeing similar dislocations in other future markets? There have been rumblings surrounding the GLD ETF for a while now, and with disruptions in the physical metal market could it be possible that long future contract holders would actually want to take delivery of the metal, thus leaving shorts scrambling to find physical gold to deliver?
  • HJ
    Hollis J.
    21 April 2020 @ 12:37
    Thank you Raoul for your timely thoughts and your big picture thinking. I am a new subscriber, and a "little guy" from an investor aspect. Your service is invaluable to me! Thanks again
  • MC
    Mathieu C.
    21 April 2020 @ 05:32
    is this a trade recommendation which will appear in the portfolio?
    • RP
      Raoul P. | Founder
      21 April 2020 @ 12:32
      No... there is no trade recommendation here.
  • BD
    Bryan D.
    21 April 2020 @ 11:57
    Raoul any thoughts if Russia in particular could start to liquidate its large gold holdings to cover their shortfalls from Oil revenue. Happy to be shown different data but i see them as the 5th largest holder with just over 2200 tonnes then Saudi at 17th with another 320 tonnes.
    • EO
      Elena O.
      21 April 2020 @ 12:31
      I think they will simply print for the needs...cause deflation wont be allowing printing have an impact for some time :)
  • SS
    Steve S.
    20 April 2020 @ 22:42
    Raoul. Tanker stocks a good buy now? It sounds too good to be true?
    • DJ
      Dhananjay J.
      20 April 2020 @ 22:58
      Well that train (Tanker) just left the station today!
    • CH
      Christoph H.
      21 April 2020 @ 11:08
      Thinking algos could still pick it up another notch on earnings
  • JM
    Julien M.
    20 April 2020 @ 21:45
    Thanks for the update. Off topic question: starting a position in BTC and wanted to know if there's a preferred platform?
    • DB
      David B.
      20 April 2020 @ 22:00
      Coinbase is easy for newbies. Most BTC enthusiasts recommend you subsequently move the BTC off of there and truly own it with a private key (otherwise you have an IOU from Coinbase). But it's also possible to screw that up and if you lose the key you've lost the BTC forever. Buying GBTC is another option. You pay a premium there but some think the premium will increase with institutional interest.
    • JM
      Julien M.
      20 April 2020 @ 22:04
      Not sure if it makes a difference but it would be a large position.
    • SS
      Shanthi S.
      20 April 2020 @ 22:37
      A lot of exchanges have OTC offerings for larger positions.
    • DB
      David B.
      20 April 2020 @ 23:45
      Julien, I think I heard GBTC will sell large positions off-market without the premium. Contact Grayscale.
    • MT
      Matthew T.
      21 April 2020 @ 00:03
      Gemini is also great
    • AE
      Anthony E.
      21 April 2020 @ 00:10
      I personally bought it on Coinbase. Then I highly suggest a cold storage wallet like Trezor or Ledger. Then you just move it off the exchange, unless you want to actively trade (use Coinbase Pro).
    • AH
      Andre H.
      21 April 2020 @ 03:59
      Hi Julien. Two very reputable exchanges are Pro.Coinbase.com and Kraken.com. Pro.Coinbase.com is the "professional" sister site to the more consumer facing Coinbase.com. Pro.Coinbase.com has much lower fees than Coinbase.com. Kraken.com has even lower fees than Pro.coinbase.com (significantly so). But unfortunately Kraken does not operate in every state in the US (for example they do not allow New York State customers because of the onerous New York State bit license laws.) Someone here mentioned Gemini.com. While it is true that Gemini has an excellent reputation for security, they do have extremely expensive fees. (And in my limited experience with them, not as liquid markets as Pro.coinbase and Kraken.) Here are the fee schedules for all three: Gemini.com: https://gemini.com/fees/web-fee-schedule#notice Kraken fees: https://www.kraken.com/en-us/features/fee-schedule Pro.Coinbase fees: https://help.coinbase.com/en/pro/trading-and-funding/trading-rules-and-fees/fees.html All three exchanges have excellent reputations for security (which is important with Bitcoin). And Kraken and Pro.Coinbase have good liquidity (Gemini less liquidity, as far as I remember--but I could be wrong about that.) If you are looking to buy BTC in the amounts of hundreds of thousands USD or millions of USD in big tranches, then you definitely want to explore using a Bitcoin OTC desk. (But this only makes sense if you are buying large amounts in a given buy order.) I'm less familiar with Bitcoin OTC desks but some players are: Kraken: https://www.kraken.com/en-us/features/otc-exchange Genesis: https://genesistrading.com/ Also, an excellent OTC desk that will accept smaller trade sizes is Galois Capital: https://galois.capital/otchome One thing to keep in mind is that you want to take a position in Bitcoin. The ticker symbol for Bitcoin is "BTC". You do NOT want to buy Bitcoin Cash ("BCH"). Sometimes people get confused and it would be a shame to mistakenly buy Bitcoin Cash, instead of Bitcoin! Hope this is helpful.
    • CD
      Carl D.
      21 April 2020 @ 09:50
      Thank you all contributors. I have been trying to pick a reputable BTC exchange for the last while. I think I can now do so. The issue now is the biggest one. Timing. Will it pull back to about 3-4k or do I buy now. Decisions.....decisions.
  • DB
    David B.
    20 April 2020 @ 21:57
    Thanks, Raoul! I'm all-in on your framework, but am also always wary of echo chamber effects. Is there a credible bull you would be interested in debating for us? A real debate, not an interview. Having Mike Green on was great but he has a very particular thesis, and it wasn't a debate. Maybe @DaveHcontrarian? Thanks for everything you do!
    • RA
      Robert A.
      20 April 2020 @ 22:49
      Kevin Muir would work and David I think we have our own Macro Insiders debate going on as we write....Julian just went short the DXY and two other buys (XME and EWW) which are based on his same thesis of US $ down—clearly we know Raoul’s view on US $ up. Only thing I might add is that Julian is shorter term tactical on his trades and Raoul’s view tend to be more long term.
    • WW
      Will W.
      20 April 2020 @ 23:25
      The most credible bull I am aware of at the moment, who has pretty much a 180 view, is Tom Lee. He did a web cast today with market rebellion where he went over his bullish sentiment. I am not sure if there is a replay or not, but if you check out his twitter feed you can also get a pretty good idea of why he thinks March 23rd was the bottom, and why we are in a new "bull market."
    • EO
      Elena O.
      21 April 2020 @ 07:00
      +1 for @DaveHcontrarian - want to hear his thesis as he was right on a lot of macro
  • RA
    Robert A.
    20 April 2020 @ 21:54
    Thanks for the update Raoul. Audio was fantastic and the Video was really much improved lighting, clarity and color wise! Whatever you have managed to do is a HUGE improvement....can’t wait to see if it carries forward to your Daily Briefings, et, al. BTW, you have to be really proud of what your team is doing on the Daily Briefings....ED, Roger and Ash have just been killing it and the DB has been exceptionally well received. One final note...having been with RV almost since inception and having seen the various “stutter steps” to refining the offerings, platforms and billings for same I think the “Essential”, “Plus” and “Pro” offerings have resulted in an easy to understand Product offering that fits all the levels and needs of we RV’ers.
    • RP
      Raoul P. | Founder
      20 April 2020 @ 22:58
      That is amazing to hear. Its been a tough journey of learning but we are getting there! Thanks so much
    • GC
      Gerard C.
      21 April 2020 @ 04:11
      Agree that ED, Roger and Ash have been fantastic.
  • AH
    Attila H.
    21 April 2020 @ 04:02
    Thanks for the update Raoul.
  • JM
    Jake M.
    21 April 2020 @ 02:17
    Hi Raoul, while the economic narrative seems really bleak, the FED and US government also seem very willing to to support the economy through fiscal and monetary policies. In particular, I have been watching LQD and HYG, both being very flat recently. Regardless of the real economy story, I see potentially 2 outcomes: 1) QE, money printing and fiscal policy successfully hold the credit market from not collapsing. In this case, I think equity is still going hold and we might eventually see inflation. 2) US fails to hold and we have continuous deflation Looks like you are heavily leaning toward position 2) above. Why do you think 1) is not really attainable? Also, are bitcoin and gold going to do well in both of the above scenarios?
  • GP
    Gregory P.
    21 April 2020 @ 01:35
    Raoul- With the perfect storm of oil prices so low, continuing sanctions, and a huge CoVid problem relentlessly crushing Iran what are the chances that Iran just lashes out with extreme action and even war.??
  • DV
    David V.
    20 April 2020 @ 23:42
    Thoughts on EWW trade? Realize there's a difference between short and long term strategies for Julian and Raoul but like everything in this crash SPEED
    • DW
      Dean W.
      21 April 2020 @ 01:07
      I like the EWW trade long term and have taken a nibble. But I think there’s more downside in 2020 or perhaps even 2021 before it makes a true bottom. Will continue to take some nibbles on bigger down moves to build up my target allocation.
  • DW
    Dean W.
    21 April 2020 @ 01:04
    Great perspective. I don’t expect the equity market to roll over until there’s a squeeze on most of the SP500 shorts. I think it could go all the way to new highs if that’s what it takes to get the shorts to capitulate. Never underestimate the power of the plunge protection team to take the market higher than what would be considered rational by conventional measures, Shorting the SP500 is rarely easy, that’s why it remains the “vanity trade”
  • MC
    Michael C.
    21 April 2020 @ 00:04
    As usual Raoul you transform chaos into coherence, Thank you. Just wondering if it makes sense and is it possible to dig a little deeper into the Policy response (and transmssion mechanisms) to the crisis. Policy is in a huge tug of war with growth and (dis)inflation while market narratives lurch between two extreme outcomes. Measuring the ongoing success or failure of targeted policy initiatives would be helpful in understanding how these swinging market narratives oscilate around reality. And it may also give us some insight into what to expect from future policy initiatives (if we are looking at the same things policy makers are lookig at we can anticipate their next move).
  • RS
    Ravi S.
    20 April 2020 @ 22:44
    Hi Raoul Awesome as ever mate!! One question Though, can the fed print enough dollars to prevent USD from rising? Thanks Ravi
    • WM
      Will M.
      20 April 2020 @ 23:03
      Thats what I am still fighting to understand. Fully understand the dollar liquidity issue as described by Raoul and Martin Armstrong, but it is so difficult to fathom that even in the short term the dollar can soar.....and after today in the oil market it feels like trillions more dollars are on their way soon.
  • WM
    Will M.
    20 April 2020 @ 23:00
    Like someone below, I have been in the oil business since 1978 and today is at once, both shocking and yet totally understandable. I wonder how many oil shorts just made several years worth of earnings today. Why is it I have this gnawing worry in my gut that 2020 is going to go down as the year the Western financial system collapsed.......it started slowly at first and then happened all at once? It just feels like over the next few weeks we are going to see additional trillions upon trillions of dollars being created. My very average mind is wondering at the magnitude of the impact on everything, and all of us.
  • BJ
    Brandon J.
    20 April 2020 @ 22:43
    Raoul, I could honestly see the government stepping in as the buyer of last resort to bail these guys out and just burning it. Is that even possible? If all the storage space is gone you either turn the well off or...?
  • ML
    Michael L.
    20 April 2020 @ 22:13
    Many thanks Raoul! Appreciate your insights as always!
  • BJ
    Brandon J.
    20 April 2020 @ 22:02
    Thanks. Much appreciated today.
  • JW
    JW2 W.
    20 April 2020 @ 21:51
    Fantastic customer service, thanks. I find the divergence between the real economy and the financial economy both fascinating and worrisome. I hope the fabric of society holds.
  • JP
    Joel P.
    20 April 2020 @ 21:49
    As a newer subscriber, can't say how much I appreciate these one-off flash updates. Thanks!
  • MZ
    Matthew Z.
    20 April 2020 @ 21:48
    Raoul u and Julian need to get everyone in this tanker trade. Harris kupperman did a rv interview on this. All this oil is going to tankers and rates exploding. Up 15 percent today. Printing money faster then the fed
  • je
    james e.
    20 April 2020 @ 21:42
    R: I've been in the oil and gas industry since 1980. I remember well January of 1986 when we opened a new E&P office only to be greeted by $9.75/bbl two months later. I've been through every oil/Rec shock since and thought I had seen it all. Here is a new term for you (to describe being invested in oil, real estate and frac sand in the Permian): "the Texas Hedge". Another way of saying it is, "you're F'd". Only good news is I have no debt, cash/btc/gold and an early subscription to RVTV. You nailed it. Did you ever think your single digit oil call would be high? I'm afraid, by the time we are past CV, every industry will be able to say, "wow, I've never seen that before". None of us have. Fortunately, you saw it in your mind. Thank you for your service.
  • NR
    Nathan R.
    20 April 2020 @ 21:32
    Thanks Raoul.
  • AT
    Alez T.
    20 April 2020 @ 21:31
    The man! Thx
  • MS
    Mark S.
    20 April 2020 @ 21:29
    Thanks for the update Raoul.