Is Recession Coming? – With Raoul Pal

Published on
July 15th, 2019
66 minutes

Is Recession Coming? – With Raoul Pal

The Expert View ·
Featuring Raoul Pal

Published on: July 15th, 2019 • Duration: 66 minutes

Raoul Pal sees rising risk of a global recession — and due to the precarious construction of the recent economic expansion, the resulting damage could be unusually devastating. In this deep-diving presentation, Raoul presents many specific indicators of weakness, speaks to the potential market impact, and explains how a "doom loop" could quickly take matters from bad to catastrophic. He also suggests steps that savvy investors could take to prepare themselves. Finally, he previews some of the conversations he plans to have over the next two weeks on Real Vision, as he seeks to better understand both the current risks and the potential opportunities. Filmed on July 8, 2019 in New York.



  • AC
    Avi C.
    28 July 2019 @ 05:42
    The more I read and watch everyone here, the more I think of Dow 50000
    • PJ
      Paul J.
      17 August 2019 @ 13:57
      Best of luck with that Avi!
    • MM
      Mike M.
      11 March 2020 @ 22:33
      How did that play out for you?
  • JC
    Joe C.
    10 December 2019 @ 06:46
    Um, wow.
  • AS
    Andrij S.
    29 November 2019 @ 19:25
    But maybe you ignore sone things.
    • AS
      Andrij S.
      29 November 2019 @ 19:38
      Sorry. touched reply to early. So - maybe you ignore some things about the cause of this political shifts. First, China is a fake communist regime. They have build Cities for getting investments. They just produce numbers for investment funds. China has also an aging population, so this growth will stop. Then we have a big bunch of "Millenials" who own nothing, and are excluded from the whole Business thing. They are Smartphone addicted and unable to work - because there was no work, because everything shifted to China - based on fake numbers. All this dept is to fake the old 80/90ies economy and nobody is building something subatancial new. In fact, the goods we can buy are expensive because they are bad. Not even the size of shoes are correct anymore - we are flooded with cheap crap which kicks out every good old manufacturer out of business and ruins whole cities. Thats why it is correct to change the "global trade" (which is none, it is just everything to china). So yes, there will be a crisis, we are already there. In europe money is crippling, you pay double the price for goods if you check it with Deutsche Mark, and you can not save money anymore. Some Young people can not afford meat - and the stress level is gigantic. We are mids in a mass Depression (an psychological on). And prices are rising - pensions are not existent anymore (yeah, 90 Euro per month..) and all medical insurances are kaputt running on depth. Did i mention the taxes? How can we, the younger one, pay all this? We can not. And this has to change. Thats why WallStreet is not the real economy.
  • GF
    Gordon F.
    1 November 2019 @ 04:24
    Raoul, Starting at around 39:00 you talk about the Doom Loop. I just ran across this again on YouTube, and I think you nailed - way back in this video - why the Fed started POMO and QE again in September, and keep extending the time it will run. We know - now - that they have been loaning out tens and hundreds of billions of dollars, but are totally mum as to who is needing it. Might you consider doing an update of your analysis in this video in light of the recent Fed operations? And if they are indeed trying to prevent the Doom Loop you described, is there any hope of really being able to avoid it?
  • MD
    Mitchel D.
    27 July 2019 @ 00:54
    Can you get google chromecast put onto your videos. Any and every video feed that is something has chromecast. If i am just missing where it is can somebody enlighten me?
    • PJ
      Paul J.
      17 August 2019 @ 13:58
      Chromecast works fine with Realvision. Just hit the button in the videos
  • SM
    Sebastian M.
    31 July 2019 @ 10:15
    I'm wondering about consumer credit. P2P lending is getting more and more popular in Europe with both loan originators and lenders flocking to these platforms. Does this have a potential to turn ugly too?
    • PJ
      Paul J.
      17 August 2019 @ 13:55
      Suspect most P2P lenders going to zero!
  • PJ
    Paul J.
    17 August 2019 @ 13:54
    Raoul, been following you (and Grant) from day one of Realvision! This video encapsulates all of your views over the last few years. Suspect this is the endgame! Thanks for sharing!
  • RI
    R I.
    15 July 2019 @ 10:00
    RP is a perma bear and hasn’t changed his tune since 2009. He also discusses probabilities as if he dynamically measures them. Here’s an epic example:
    • ns
      niall s.
      15 July 2019 @ 11:28
      Thanks , that adds a little perspective .
    • PG
      P G.
      15 July 2019 @ 12:57
      I feel the smae
    • DD
      Daljit D.
      15 July 2019 @ 14:01
      Thanks for the article link. RP isn't a perma bear, that article was written circa May 2012..the world looked absolutely on the brink. Then came Draghi's 'Whatever it takes' speech and subsequent reduction in systemic risk, cycle highs for credit spreads.
    • TR
      Travis R.
      15 July 2019 @ 14:11
      Daljit D. That is the whole point. CBs can print infinitely to float asset values in nominal terms.
    • TE
      Tito E.
      15 July 2019 @ 17:29
      You're free to buy the US stocks on leverage mate. Thats what makes a market.
    • RM
      Ryan M.
      15 July 2019 @ 23:09
      Not as bearish as Grant lol
    • WM
      William M.
      16 July 2019 @ 04:34
      You were warned. (9 years ago).
    • WM
      Will M.
      20 July 2019 @ 19:56
      Ok you raise a good observation R.I. The question is, are thing better or worse since Raoul's 2012 work? I have read many folks who thought 2102 would see the start of the next downdraft and then again in 2015. Here we are in 2019 and the data is all very much worse. The financial world has been in hot water since 2009 with the temp slowly rising. The permanent bears simply see the inevitable. However the inevitable is simply not punctual.
    • CT
      Christopher T.
      23 July 2019 @ 15:36
      Thats the key, hes been singing this tune for a while. And given all the bears in the comments, looks like this bull market still has a nice runway.
    • NP
      Nicholas P.
      15 August 2019 @ 18:52
      Reading that slide deck, I can't help but think that he wrote that about 7 years too early, and that he underestimated the lengths monetary authorities would go to prevent that from happening. Reading that deck, it feels as though we are now on the cusp of The Big Reset
  • av
    aramis v.
    12 August 2019 @ 21:23
    Raoul, on the remaining 13:50, was that guess Peter Zeihan? Please invite him again
  • TB
    Tad B.
    9 August 2019 @ 21:00
    Im going to have to digest this again.... Fab video mate! Well done Raoul. 👍🏻 Anyone got any thoughts on YEN (JPY) over the coming 3 years ? Going up strongly with the dollar and then tanking to zero ?
  • TB
    Tad B.
    9 August 2019 @ 20:49
    I feel sick 🤢
  • MK
    Marko K.
    1 August 2019 @ 08:44
  • DS
    Dan S.
    30 July 2019 @ 00:58
    Excellent later half of the video!
    • AM
      Artur M.
      30 July 2019 @ 21:43
      Thank you for the link Dan.
  • zy
    zhang y.
    30 July 2019 @ 13:19
    I remember when Raoul you said in January 2018, I give up my bullish US Dollar thesis, then it would have been marvelous to turn bullish, after one year and a half of Us Dollar bullishes, now claiming to go bullish the us dollar... I wonder if it would happen the same now,
  • DS
    Dan S.
    30 July 2019 @ 00:52
    The FED will probably print and buy the corps.
  • AM
    Artur M.
    29 July 2019 @ 21:32
    Where can I get ECRI data?
    • DS
      Dan S.
      29 July 2019 @ 21:58
  • PL
    Pete L.
    18 July 2019 @ 11:44
    "And I've come on to Real Vision a couple of times to talk about the bond trade because I said, look, the cycle's turning, the best thing to do is be long bonds. And that's been a spectacular trade." vs "Big BBB stocks fall, and bonds fall even more sharply," - Are you saying you'd be getting into bonds with the EUR/USD & Gold/Bitcoin or out of bonds? Sorry if I've misunderstood something here.
    • JC
      Joe C.
      18 July 2019 @ 15:30
      BBB refers to corporate credit, ie corporate bonds, which is where the leverage/bubble/risk is this cycle. You definitely do not want to be long corporate credit (HYG, JNK). The call here is to be long US treasury bonds. Raoul favors the short end (eg 2s, 5s) as these will be the most sensitive to Fed rate cut action, but many have made the case for long duration (10s, 20s, 30s) as well. See the recent David Rosenberg video or any of Hedgeye's work for arguments that favor bonds "across the curve" in this environment. Keep in mind this trade may not be over but is starting to get long in the tooth, and there's quite a bit more risk going long bonds now than there was in October 2018 when this call really started to work. I personally am still trading around a core long position in TLT and foresee this working through the next quarter or so, until we start to see green shoots in the data.
    • JG
      Judith G.
      28 July 2019 @ 19:06
      Does one need to utilize a broker to do the 'bond trade? I am new to investing. Have been responding to coming zero interest rates the past couple of years by investing in 3% CDs, which is obviously an ignorant way to play it. Any guidance is appreciated.
    • JC
      Joe C.
      28 July 2019 @ 23:24
      @Judith... there are ETFs easily available to us retail traders. Check out tickers like TLT (long dates bonds) and SHY (short dated bonds). TMF is a 3X levered play on TLT. But be sure you know what you’re trading and why :)
  • DD
    Derek D.
    27 July 2019 @ 20:34
    The Fed must do anything but be really aggressive. They're the reason we're here. It's an awful alternative, but it's the only alternative to merely kicking this can further and creating an even worse crisis. We. Must. Let. This. Burst. But will this blasted baby boom generation ever take their lumps and show some empathy/concern for their progeny?
  • RM
    Robert M.
    23 July 2019 @ 01:44
    Tried to watch this but not interested in looking at Raoul's chest. Common man, button some buttons, pretend you're a professional.
    • RT
      Rune T.
      23 July 2019 @ 16:47
      He is living in the tropics! Go to Cayman and see just how warm it is, especially as we are nearning summer! I've personally not worn shoes for over two years on Cayman! who give f*ck what you wear so long as you look clean enough! >)
    • IH
      Iain H.
      24 July 2019 @ 13:21
      Why would you want to miss, what could be hugely important information, because you don't like how he dresses?
    • PB
      Paul B.
      25 July 2019 @ 02:04
      I respect him more for not dressing up in a suit and being fake like every other banker.
    • GB
      George B.
      25 July 2019 @ 20:56
      This is the sort of comment one gets when subscriptions are given away to knuckle heads! Those of us who paid for subscriptions enjoy the content..
    • BM
      Bryan M.
      26 July 2019 @ 04:17
      Robert, I suggest you seek professional
  • wj
    wiktor j.
    24 July 2019 @ 11:31
    Looks to me that the dollar will go a lot higher. The fed has assured this with the bailouts/loans given in the last recession to institutions and gov outside of us. Just look how much money Deutsche bank got. I wonder when all this money is due. China Looks like china will have to import protein food from US. This will add pressure to dollar availability. I found a funny article that china has signed a deal to purchase food from Russia. Made me laugh as Russia has problems feeding its own people. Perhaps yes in couple of years if they grow a lot of food yes Russia can export. But this wont happen in near future. Not to mention their dollar debt. EU When the zombie companies start going under in EU (Word is its 20% of public traded companies wont be able to repay the debt) capital will flee to the US. I imagine this will happen when the debt gets downgraded to junk. Also most countries in EU deficits will grow higher due Merkals “let them come” policy. In Sweden we see already some states going bankrupt. Even read a story of children in Swedish schools being fed yogurt like product for launch because state has not more cash. I also find it laughable that the leader of the EU is woman who left the German army in catastrophic situation wants to build a EU army. This will ofc never happen. Her bad performance in Germany can still be found. Perhaps she was voted in because some countries know this will be the downfall of EU! What will happen to Euro? Metals I think the dollar will outperform the gold and silver when the end game starts. At that time I will be buying into the metals. Its not about the price of silver or gold its about the asset that most people will want. Cryptos Cryptos is still too hard for normal people to buy because there aren’t that many exchanges. I cant go find an exchange here in my country where I can go and exchange my currency for cryptos or vs versa. So unless the cryptos start rolling out exchanges its just speculation. Perhaps Forex can be persuaded to add cryptos to their exchange. But I can go into forex and exchange my fiat money for dollars! Pensions Will not exist in near future. The elderly will receive food stamps and live in dorms.
  • CL
    Chris L.
    24 July 2019 @ 00:08
    Looks as tho my original comment is missing lol
  • MS
    Matt S.
    23 July 2019 @ 21:05
    Awesome video - surely in this environment 50% gold would not be a crazy idea? Noting else is safe! Other than working farmland but that would need serious security...
  • MS
    Matt S.
    23 July 2019 @ 18:30
    "Agreeing a new debt ceiling" - which bit of ceiling don't they understand?
  • CE
    Carlos E.
    23 July 2019 @ 00:39
    Good presentation, Raoul. I hope some people in authority at the Fed see this presentation and share it with their colleagues.
  • NO
    Nikolas O.
    22 July 2019 @ 20:22
    the Deutsche Bank prime broker example gave me flashbacks of Bear clients leaving for Lehman...then Lehman clients coming back to Bear PB reanimated as JPM PB. It's musical chairs when liquidity dries up.
  • DF
    Dominic F.
    21 July 2019 @ 13:25
    Brilliantly articulated Raoul. Love the Doom Loop scenario explanation. My question: Do you think the G20 will do an orchestrated Fiscal Stimulus across all countries as monetary policy loses its potency? I think this will be the case and possibly stimulate Commodities in the short term, but as it will add an enormous amount of debt, will be the catalyst to actually make things worse in the long run. What say yee? Thanks.
  • GR
    George R.
    15 July 2019 @ 22:15
    For those interested, please read up on IRS Required Minimum Distributions (RMDs). You cannot keep retirement funds in your account indefinitely. You generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 70½. For each subsequent year after your required beginning retirement date, you must withdraw your RMD by December 31. If you do not take any distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required. Is a boomer gonna take his RMD at S&P 3000? Unlikely, because he's greedy and he will hang on for higher prices. In reality, he'll puke and take his RMD for this year in Nov/Dec probably selling into much lower prices and S&P 2300 or worse. Best of luck to the boomers.
    • RC
      Robert C.
      16 July 2019 @ 03:30
      Sens. Ben Cardin, D-Md., and Rob Portman, R-Ohio, reintroduced legislation late Monday that would raise the required minimum distribution age from 70 ½ to 75 and also help workers pay off their student loans. Cardin and Portman’s Retirement Security and Savings Act of 2019 overlaps with some provisions in the Retirement Enhancement and Savings Act (RESA) of 2019, which was introduced on April 1, but RESA only raised the RMD age to 72. Anyway the Treasury working on some relief, but they need a lot more.
    • GR
      George R.
      18 July 2019 @ 09:39
      That's good info Robert. Thank you. RV is great! Always learning. I found this link which tracks the bills progress and likelihood of success.
    • WM
      Will M.
      20 July 2019 @ 20:31
      Just excellent comment ! For those of us facing this issue in not too many years its really important. I believe the RMD will be extended to garner voting support from boomers. 75 feels like a no brainer given longevity increases.
  • EL
    Erik L.
    15 July 2019 @ 18:13
    I love real vision, been a long time subscriber. This is however not real vision for me. Thumbs down from me.
    • Hv
      Hannah v.
      16 July 2019 @ 04:05
      Hi Erik, I’m curious why this thesis left a bad taste in your mouth? Cheers, Hannah
    • TR
      Travis R.
      16 July 2019 @ 05:19
      Maybe that the thesis has been touted since 2010 just with updated charts. I agree with the presentation and the thesis but CBs are all in. CBs throwing caution to the wind and printing to infinity. There is NOTHING they cannot do. They can stave off the downturn for another 50 years. So lets say corporates get into trouble... what is stopping the Fed from buying $1 trillion of corporate bonds? Or $5 trillion? Also they changed banking rules. Mark to market (which accelerated the 2008 meltdown) is dead. It is mark to model now. So banks can load up on debt and mark to model: hold to maturity and voila no losses! Lots of holiday bonuses to go around! I know it is insane but it is what it is!
    • PU
      Peter U.
      16 July 2019 @ 09:19
      Travis R. I agree with your comments. It is F*&% sad!
    • EL
      Erik L.
      19 July 2019 @ 19:37
      Hey Hannah. To me this is a thesis backed up buy cherry picked charts backed up by lines on those charts to fit the thesis.. A bit like Elliot Wave really.. maybe it will prove right maybe it won’t. I learn more, and enjoy more the long format interviews.. cheers:)
    • WM
      Will M.
      20 July 2019 @ 20:21
      As Martin Armstrong says continually..... its all about confidence. Once that is lost bad things can happen. Once confidence in the central banks is lost, we will see financial chaos no matter what they do. HOWEVER, folks have been saying the precipice is right in front of us since 2006. So I am not holding my breath that Raoul's Phase 2 will lead to Phase 3 any time soon. But if you believe the central banks can just buy everything for ever with no real consequences than I have a used car I need to sell you.
  • MR
    Max R.
    15 July 2019 @ 15:32
    Remember the old days, when an economist, or Wall Streeter, would always speak from an expensive leather chair? I'm not convinced people want it any other way. I'm a huge fan of RealVision, but I have my worries they're breaking some rules that can't be broken.
    • TS
      Tyler S.
      15 July 2019 @ 17:47
      agreed and I've told them they have really bad UX
    • MR
      Max R.
      15 July 2019 @ 19:09
      Even in this very comment. The "Reply" button is above your comment! It looks like I'm about to reply to myself. I only know from past experience it will reply to your comment--I hope! I sent them the story last week, crickets. So I figured I'd post it here on this video. Not my first choice. Anyway, glad I'm not the only one scratching my head. Again, I'm a huge fan of this effort and want them to succeed! I understand they're trying to reach a new generation, but like you say, I don't believe they understand how important UX is, and more importantly, how the new generation will avoid a bad one.
    • PG
      P G.
      15 July 2019 @ 20:36
      UX and UI need a lot of help, I am writing it here because nowhere else did it help... Its time to level up the game.
    • DH
      Daniel H.
      15 July 2019 @ 22:49
      The interface is clunky, but I can live with that if they don't junk it up with a lot of silliness, like over dramatic millennial tutorials, snippets from interviews past, and an obsession with crypto for a while.
    • WM
      Will M.
      20 July 2019 @ 20:12
      Good article Max. I have been on RV for quite a while and subscribe to M. Investors. However I fully agree the site is getting cluttered and a challenge to follow. Hate the snipers of videos pointing to older videos. These need to be separate from the latest articles. The music effect have been toned down after several comments. Now RVT needs to address the interface with some urgency to get it as good as their videos.
  • TR
    Travis R.
    15 July 2019 @ 14:23
    Raoul Pal increasingly sounding like a elitist globalist shill.
    • TR
      Travis R.
      15 July 2019 @ 14:34
      Complaining about President Trump "picking on" countries via trade talks. Seeking truly fair trade is the new bullying.
    • DK
      D K.
      15 July 2019 @ 15:00
      I’m all in support of Trump taking on trade. Waited for decades to see this... except, you don’t take on the whole world at once.
    • SH
      Sean H.
      15 July 2019 @ 15:52
      Sorry my friend but I disagree with this comment greatly. Cheers.
    • OC
      Otto C.
      15 July 2019 @ 18:17
      Raoul spoke the facts, if I'd like sugar-coated presentations, I would be watching Fox News or any of the biased news networks.
    • TR
      Travis R.
      16 July 2019 @ 05:23
      Otto C. RP stated in an interview with conviction that the entire Trump administration is going to prison. Haha it takes real brainwashing to believe and espouse that nonsense.
    • MB
      Matt B.
      17 July 2019 @ 09:04
      Far better than sounding like an offshoot of Breitbart, Infowars or ZeroHedge.
    • WM
      Will M.
      20 July 2019 @ 20:03
      Travis, this is not a political channel but a financial one and as a commentator above said, Trump has gone after everyone almost at once. A slightly measured approach with less dammed tweets might have got better results. Raoul is simply noting here that as a result of the political and trade uncertainty, business conditions have been aggravated exactly at the same time as financial conditions continue to deteriorate. I think Europe is going to be the source of the coming contagion and the US will get caught up in it as it did in the early 1930s. RP is definitely NOT an elitist.
  • XY
    Xin Y.
    15 July 2019 @ 10:45
    Why ECRI instead of ISM PMI?
    • SS
      Stephen S.
      15 July 2019 @ 22:05
      Raoul said he finds it more reliable than the ISM, which he doesn't use much any more.
    • VK
      Viresh K.
      15 July 2019 @ 22:29
      Was a valid question, why would this get downvoted?
    • WM
      Will M.
      20 July 2019 @ 19:52
      Viresh, downvotes probably because Raoul did explain in the video why he dropped the ISM.
  • DN
    Douglas N.
    19 July 2019 @ 15:57
    Epic. Curious was this sped up to fit content in just over an hour, or did Raoul drink 3 Redbulls and a pot of Coffee before recording?!?!
  • TS
    Taranvir S.
    19 July 2019 @ 14:58
    There's really just two things that will trigger a recession: significant downfall in liquidity or policy errors (fiscal, monetary, trade or even military) --> this will hit confidence and thus risk assets globally --> Gold and BTC will (and already) start to look attractive
  • MH
    Martin H.
    19 July 2019 @ 03:00
    You have Silver wrong guys. It will follow gold and out preform, it is a great opportunity. Note the current breakout.
  • PQ
    Peter Q.
    18 July 2019 @ 21:43
    Ford Credit is most of the debt and in the GFC the loss ratios were shockingly low. Ford's balance sheet ex Ford Credit is probably at extremely low levels.
  • AH
    A H.
    16 July 2019 @ 20:27
    How do I go long on bonds?
    • CH
      Connor H.
      16 July 2019 @ 20:31
      TLT, EDV, VGLT, ZROZ all liquid large ETFs, the last is zero coupon.
    • CA
      Chris A.
      18 July 2019 @ 00:22
      is there a decent way for a retail investor to go long the short end of the curve with enough leverage to make it count?
    • JL
      James L.
      18 July 2019 @ 02:05
      @Chris A. SHY ETF is 1-3 year treasuries.
    • JC
      Joe C.
      18 July 2019 @ 15:43
      @Chris A. The SHY ETF has such low volatility that buying it with a cash account will barely net you a return (and lock up a huge % of your capital). I recommend looking into trading options (buying long-dated calls, even Robinhood offers this now) or using a levered ETF. I trade TMF, a 3x levered play on TLT. It allows me to deploy less capital to realize a return, while keeping my % or $ risk in line with what I'd be risking going outright long TLT anyway.
  • CT
    18 July 2019 @ 12:37
    Great video!
  • AS
    Alex S.
    18 July 2019 @ 03:34
    Hell yeah Raoul. Reminds me of old school RV. Such a privilege to be able to listen in on the debate.
  • JL
    James L.
    18 July 2019 @ 02:07
    You might be planning this already after it's been available to paid subscribers for a while, but I'd love to be able to send this to people I know that haven't subscribed. It's a very important talk.
  • BF
    Brooks F.
    18 July 2019 @ 01:45
    Listen, and pay close attention! Then hear it again.
  • PD
    Petar D.
    17 July 2019 @ 18:29
    That video came straight to the top of my favourites - thanks for sharing your thoughts Raoul. However, one piece I expected to hear at the end, which never came, was a trade in shorting BBB. That's a product of my independent research on BBB European Corporates where the corresponding iBoxx yields 90 bps (OAS is about 130 bps). My considerations extend to entering a long/short where the bonds (short) would provide the safety net and the long (say S&P 500 ETF) would give the upside. As much as I agree that there's a considerable chance of recession ahead, time has shown that markets can stay irrational for quite a while (and maybe that rate cut will give people & corporates all they need to keep buying). I would love to hear your thoughts.
  • MN
    Maverick N.
    15 July 2019 @ 20:33
    Thought provoking to say the least...... Have a serious question for Raoul - a guy who is CEO of RV (that employs upwards of 70 ppl) - when do you get the time to think about this stuff? It surely must have taken a significant amount of time to take in, analyze, think, re-think and crystallize this material in your head in order to be able to present that well. This is what blows me away!
    • RP
      Raoul P. | Founder
      15 July 2019 @ 22:01
      Thanks. I’ve been in the markets for 30 years and have been writing The Global Macro Investor for 15 years and Macro Insiders for 2 years. I’m obsessed by macro and the beautiful puzzle. But yes, it’s really hard to find the time for it all
    • TT
      Trenton T.
      16 July 2019 @ 00:11
      I'd really like to see Mervyn King and Harold Malmgren sit down with Raul and discuss how the IMF and the CBs resolve the worst-case scenario. That doesn't trade well but would do us all some good, regardless of where we live in the world and what we do.
    • RM
      Richard M.
      16 July 2019 @ 15:28
      Excellent idea Trenton! I would second that request (with those guests specifically).
    • MB
      Matt B.
      17 July 2019 @ 09:09
      Yes, I'd love to see FORMER central bankers & their political counterpart "telling it all" on the era they lived through. i.e. what they couldn't say in public when they were in post and events were still current - and how they apply this knowledge to what we see now. Any lessons learned? What would they have done differently? How about Alan Greenspan & Robert Rubin? Ben Bernanke & Hank Paulson? Mervyn King & Alistair Darling?
  • MB
    Matt B.
    17 July 2019 @ 09:01
    Wow, what a presentation. Will need to listen to it at least 3 times to take it all in.
  • AF
    Alex F.
    17 July 2019 @ 06:02
    Thanks Raul, great piece. I know who your new best friend is.. Harry Dent. He has been predicting this, every year, since 2013. Finance, Debt, Money etc - Japan have clearly illustrated how this man-made illusion can be perpetuated for decades. A modern ECB and FED will improve on this. The BOJ only took control after credit froze and prices collapsed. I suspect the ‘New Turks’ intend to ‘go one better’ and control the bubble before it deflates.. prolonging it possibly longer than most of us believe possible. The thesis is credible and you have to take the trade. But use options the loooong loooong dated ones!
  • MN
    MIMI N.
    17 July 2019 @ 04:21
    Thank you. Very well done.
  • bt
    brian t.
    17 July 2019 @ 01:34
    Excellent, This is why iam here! Bringing valid points, over lay charting, discussions, points, facts. Even the tasteful plug at the end. Good stuff, look forward to seeing what you come out with next. In regards to the corporate debt, doesn't is seem like corporations are selling off parts of there company, to get some cash flow, based on a market share in that area. Subcontracting, out sourcing, less risk, less cost, can sever ties if business goes down.
  • rr
    rlw r.
    17 July 2019 @ 01:11
    Raoul thanks for kickstarting this series - so apropos for this summer
  • JD
    John D.
    17 July 2019 @ 00:29
    This is the best segment on RV yet.
  • TS
    Tor S.
    16 July 2019 @ 23:36
    That felt like taking punches for one hour and then some. Extraordinary. Already an RV classic. Cant wait to se the follow ups.
  • LP
    Lynn P.
    16 July 2019 @ 23:22
    the unknown is the degree to which the cash flow of AT&T, as presently configured, will be correlated to the business cycle, and the degree to which that will impact it's access to capital. It has been reducing leverage, but Raoul suggests this might be a race against time to clean up its balance sheet if/when it must roll over its debt. Would Raoul agree with that? Where would he lay the probabilities of an AT&T default? This matters to many of the retired investors whom Raoul suggests (not unreasonably) are likely to sell in a panic.
  • SG
    Steve G.
    16 July 2019 @ 11:12
    He’s been fear mongering pretty much from the start
    • JR
      Jace R.
      16 July 2019 @ 11:55
      Yeah, it feels like that during a good portion of this video as well.
    • CB
      C B.
      16 July 2019 @ 23:03
      Don't you mean, data mongering?
  • MA
    Mark A.
    16 July 2019 @ 22:40
    This is a great video. Thank you.
  • RE
    Richard E. | Contributor
    16 July 2019 @ 22:11
    Very good analysis as usual. You might want to speak to Ryan Swift at BCA who has a bit of a different view on US credit. Thanks.
  • GR
    16 July 2019 @ 22:01
    Agree with the risks ahead overall but would add two comments: - most recession indicators presented are related to the manufacturing sector, so it could be just another sectoral problem as we had in 2016 and a few insurance cuts would keep the cycle going on for a few more years; - the YoY change on Libor is mentioned as a problem on the way up (during the tightening cycle) but it is ignored when commenting the easing cycle (2x25 bps won't do it, it was always in 50 bps increments, etc).
  • KC
    Kenneth C.
    16 July 2019 @ 21:50
    Always enjoy your analysis Raoul.
  • FB
    Floyd B.
    16 July 2019 @ 00:18
    Raoul,at this level of absolute rates why isn't a 25 bps cut equivalent to a 50 bps cut historically?
    • DS
      David S.
      16 July 2019 @ 02:13
      Mathematically you may have a point. Psychologically it may make the market a little happier for a short time. Economically I do not think it will make much difference in corporate investments. DLS
    • GR
      16 July 2019 @ 21:40
      Great point, he talks about the YoY Libor change on the way up but doesn't consider it on the way down.
  • YB
    Yair B.
    16 July 2019 @ 21:33
    Raoul, thanks for a fascinating video. It seems like part of the solution is to allow pension funds to buy junk bonds. Then you have a buyer of bonds instead of more sellers. Does this make sense?
  • DM
    Doug M.
    16 July 2019 @ 20:38
    Great view, thanks -- especially interesting on pensions, tax receipts.
  • SR
    Steve R.
    16 July 2019 @ 20:36
    Raoul, regarding the USD, are you not worried the central banks will intervene to force down the USD?
  • J
    JP .
    16 July 2019 @ 13:48
    Which contract on the Euro dollar futures would you suggest looking at (2 yrs out etc) , and at what indicative price on the near month would you start buying?
    • MT
      Mike T.
      16 July 2019 @ 20:12
      l believe the best method of using eurodollar futures is not to play one particular cycle but to play spreads between two or more
  • JB
    J B.
    16 July 2019 @ 15:01
    FYI - Transcript error at 1:02:35. Raoul: "You won't be able to buy bonds." Transcript: "You might need to buy bonds." Opposing advice.
    • M.
      Milton .. | Founder
      16 July 2019 @ 17:19
      Thanks JB, we just fixed it.
  • MM
    Michael M.
    15 July 2019 @ 19:13
    If the debt doesn't get rated at junk, then there isn't a problem. There I fixed the problem, that was easy.
    • DS
      David S.
      16 July 2019 @ 16:58
      Ratings and reality are often at odds. Most Mortgage Backed Securities were rated AAA until they were re-rated. It is even possible that pension could be allowed to own a certain percentage of junk bonds. The fundamental problem with defined pensions is they are on a treadmill that is not supported by current market returns. Like the government pensions in Greece, the pensioners will be paid less than the defined pension obligation. Congress may think about bailing out the private pensions, but it cannot bail itself out federal pension, SS and Medicare. The piper will be paid. How is the question? DLS
  • DS
    David S.
    15 July 2019 @ 20:30
    Mr. Pal and all the RVTV team: Thanks for all your hard work on our behalf. I am looking forward to all your guests this week. This was an excellent beginning! DLS
    • RP
      Raoul P. | Founder
      15 July 2019 @ 22:03
      David, you are the unsung hero of the Real Vision community and for that we are all extremely grateful. Your daily comments and thoughts are something I always look forward to. Thank you from all of us.
    • DS
      David S.
      16 July 2019 @ 08:11
      Mr. Pal, thank you for your kind words. It is I, however, who am grateful. You and all the RVTV team have developed a community of market-oriented followers who have a wide range of interests and market beliefs. The comment section is a brilliant addition to the RVTV community. I enjoy reading other’s comments and learn more from their opinions of my perspectives. It is very frustrating to hear a discussion on CNBC and not be able to ask how others really feel and put forth your own opinions for review by a greater community. It is by other’s reflection that we learn what we really believe or if we should review our beliefs. I cannot be happier with the time I invest in RVTV. DLS
    • RM
      Richard M.
      16 July 2019 @ 15:26
      Who in the world would down thumb this comment?!??!?! For gosh sakes, at least explain WHY you think the comment is unreasonable or disagreeable. FWIW, I agree with you David!
  • CC
    Chris C.
    15 July 2019 @ 16:05
    Good stuff Raoul! Not defending Trump here but he's not responsible for China's behavior. "The US is forcing everybody out of China"??? Seriously? Xi has turned China into a complete Orwellian country and the world (not just Trump) is finally recognizing this. Doing business in China is no fun unless you are an academic taking Chinese bribes or a US Think Tank that's taking Chinese money to write good things (or not write bad things) about China. Yes I had to include the last sentence & I know it will piss off the academics, but truth hurts....
    • SS
      Sam S.
      15 July 2019 @ 17:54
      True that, China cannot be trusted and they're NOT our friends.
    • DS
      David S.
      15 July 2019 @ 18:56
      The Chinese administration is doing what it sees in its own best interest just like the American administration is doing what it sees in its own best interest. The fact that they are different is not surprising. DLS
    • WC
      Wilson C.
      16 July 2019 @ 14:43
      just curious if you travel frequently to China, I'm surprised if you wrote this as a frequent china visitor. DLS comment is spot on below.
  • RC
    Robert C.
    16 July 2019 @ 03:57
    Interesting comment about the debt ceiling resolution and temporary tightening like a QT. Don't quite understand that. Why does raising the debt ceiling cause a tightening when Treasury is issuing new bonds? Would like more discussion on that. Really enjoyed the video.
    • LT
      Luc T.
      16 July 2019 @ 14:34
      Is it because the treasury issueing more bonds increases competition for all bond issuers and as such increases interest rates?
  • PR
    Phil R.
    16 July 2019 @ 13:40
    Compelling watching, looking forward to the series.
  • MK
    Mack K.
    16 July 2019 @ 13:28
    Excellent & Interesting viewpoint ! very broad overview of the landscape. Just one query- you think in the end the Fed May need to buy Corp bonds- do you think the ECB has reached that stage already ? What with banks in major downward spiral (in terms of prices / earnings) & continuation of negative rates unable to help turn banks around - does ECB need to buy corporate &/or Bank debt (so a more aggressive form of LTRO ?)
  • KF
    Kristian F.
    16 July 2019 @ 12:18
    This is why I subscribe to Real Vision! Impossible to get this kind of insight by listening to mainstream media like Bloomberg or CNN,CNBC etc.
  • BJ
    Brian J.
    16 July 2019 @ 11:19
    Raoul is the best presenter out there... hands down
  • AM
    Andrew M.
    16 July 2019 @ 11:16
    The liquidity risks are entirely of the CB's making, and totally predictable. Forcing investors, pensions and banks (see European bank balance sheets) into highly illiquid parts of the market (credit, some HY and EMD) was never going to end well. ECB is the main culprit, but Fed is to blame too. BOJ has also sparked a massive yen carry trade that is very susceptible to an unwind (US credit and European bonds would get hit). And the problem is, the more CBs instinctively fall back on QE and kick the can down the road - and they will again - the worse these distortions get as companies take on ever more debt to sustain themselves (i.e. according to recent IIF report, debt has recently exploded once again, and every time the $ weakens EMs load up on $ debt). The bubbles and distortions have gotten worse because there's an illusion that CBs will always be there to back-stop these markets with liquidity or outright buy the assets if they need. Just like people were worried about the $10 trillion $ carry trade in EM a few years ago, and the liquidity of HY/credit ETFs, these problems are only now coming to the fore.
  • ME
    Michael E.
    16 July 2019 @ 10:06
    Excellent. This is my old RV. Thanks,
  • SS
    Stephen S.
    15 July 2019 @ 22:14
    Great stuff, Raoul. I believe that you are right about these risks and problems. But, if your thesis does not play out, what will be the cause? The obvious choice to me is that central banks came to the rescue, with the US providing abundant supply of dollars. The CBs seem to be low on ammo, but look at their creativity in 2008. Thank you.
    • PU
      Peter U.
      16 July 2019 @ 09:31
      Insightful comments. It is the threat of what CBers' could do that keeps asset prices high (and the bond market in check - meaning manufactured prices).
  • ja
    juan a.
    15 July 2019 @ 19:54
    New QE Fed buys Junk bonds, spread never widen.... maybe that is how the gov stop the doom and loom
    • PU
      Peter U.
      16 July 2019 @ 09:26
      precisely how it is stopped
  • JH
    Jesse H.
    15 July 2019 @ 18:47
    Well done, Raoul - this was excellent and thought-provoking. Thank you. My own analysis largely agrees with yours at a very high level, but some of your chart interpretations I respectfully part ways on (e.g. the Dollar). The key thing is that the overall direction makes sense, and the shake-out you describe in the corporate bond and therefore wider market is somewhat terrifying, even if one is well-positioned for such an eventuality. I would say, like you, that this is a high-probability event (a BBB bond downgrade, that is), especially given that we are definitely end of cycle and the Fed seems to be trying to "punt" an already exhausted cycle, to quote Julian. My biggest concern with your analysis, which I'd welcome your thoughts on, is...if we get a nasty corporate bond unwind, or even a moderate shock, could the bond market sell off WITH the equity market? I believe that to Chris Cole's point, on a previous episode, US stocks and bonds have moved in a correlated fashion for much of the past 300 years - it is only in relatively recent history that they have behaved in an anti-correlated way. Thanks again, and can't wait to listen to what's coming this week. Cheers, Jesse
    • JH
      Jesse H.
      15 July 2019 @ 19:05
      I especially like the part where you briefly say, "Maybe you can go and get a stiff drink..." LOL. As in, we're pretty fucked (excuse my French) you might want to go get something to help you relax because what I'm about to describe is going to stress you out like hell. This would be hilarious, if it weren't actually so depressing. I'll stick to Pellegrino for now so I can keep my wits about me as we enter this maelstrom. ;-)
    • PU
      Peter U.
      16 July 2019 @ 09:22
      Jesse H. . . . .IMO, the ratings agencies will never downgrade the BBB corporates. Either the Fed Gov (implicitly) will prevent it or the fear factor alone felt by the decision makers who work at the ratings agencies don't have the intellectual kahonas to do it!
  • WS
    William S.
    16 July 2019 @ 06:17
    Well the only trade can’t be Treasury bonds. There is a point at which US credibility in Treasury Bond markets falters. In other words both bonds and equities blow up at least initially until the coordinated action of Central banks is clear..similar to. 2008/9. Great thesis and a lot of moving interconnected pieces, but even at 50% is downright scary. With exception of Gold, not GLD, but hands on the hard metal, there may be no place to hide if general worldwide credit markets unravel due to a “loss of confidence” in the US credit markets and the underlying dollar. This may usher in the era of a true worldwide Digital currency not based on the US dollar but a policy mandated worldwide Euro concept...would take years to implement but solves a lot of problems the US buck is at the heart of.
    • AM
      Andrew M.
      16 July 2019 @ 09:16
      Treasuries always rally during crises, where as gold initially sells off as people are forced to liquidate / raise collateral. I expect the same will happen during the next recession - and the spread between USTs and Bunds and JGBs will shrink bc the Fed will adopt similar policies: zero rates, QE4, and potentially asset purchases (i.e. BBB- bonds or credit?). US fiscal issues will be an issue one day, but for now, a circa $20trn collateral base is not that actually much when you consider: 1. The sheer amount of bad debt (EMD, HY, Credit, and negative yielding EU HY?). When this capital needs a home, it will go to USTs - and despite the big run lately, most investors around the world, and even in the US, are VERY underweight USTs. 2. Treasuries remain the most sought after, liquid safe haven in the world. Nothing else comes close, aside from reserve balances. p.s. I expect gold to do well eventually, but a global rush into Treasuries (especially unhedged) would be very positive $ and negative gold in $ terms.
  • CH
    Charles H.
    16 July 2019 @ 08:03
    Masterful, compelling view and presentation. Can’t wait to follow the journey.
  • MB
    Michael B.
    15 July 2019 @ 17:46
    mortgage up 40%? Leverage up 80%...who borrows at floating rates with rates so low?????
    • DS
      David S.
      15 July 2019 @ 18:51
      In the US we can easily refinance at a fixed rate. I do not know if fixed rate mortgages are the norm elsewhere. RVTV subscribers are all over the world. Are 15 – 30 fixed rate mortgages normal in your country? Thanks. DLS
    • TM
      Timothy M.
      15 July 2019 @ 19:05
      I work for a large bank. 90% of my $750MM loan portfolio secured by CRE is tied to floating rates, primarily LIBOR.
    • JM
      John M.
      15 July 2019 @ 21:15
      15-30 year mortgages are definitely not standard (available) in Canada.
    • DS
      David S.
      16 July 2019 @ 07:44
      Timothy M. and John M. Thank you for your responses. Timothy M. : Where is your bank located. Thanks. DLS
  • MH
    Martin H.
    16 July 2019 @ 06:30
    If gold good here then silver is great. GSR is sitting in the 90's, dirt cheap.
  • SU
    Shakeel U.
    15 July 2019 @ 19:00
    Does anyone know what happened to Brian Price?
    • SS
      S S.
      15 July 2019 @ 19:22
      He left RealVision and went to Cheddar.
    • JL
      James L.
      16 July 2019 @ 06:19
      that sucks, i liked brian price
  • JS
    Jason S.
    16 July 2019 @ 05:54
    Simply excellent - the bank chart & bond charts are truly astonishing.
  • SJ
    Steven J.
    16 July 2019 @ 05:36
    WOW - Classic RealVision at its finest! I've been a subscriber from close to the beginning and to be honest, this past year has been a little challenging for me to stay as engaged with the shift in format, content and depth. I really enjoyed this episode. Raoul - you, Grant and the other RV staff continue to "hit it out of the park". I cant wait for the rest of the series.
  • AH
    Andrew H.
    15 July 2019 @ 18:06
    This is a great summary/ analysis of the current situation. In a "free market" I would suspect that there is a lot to be discerned from Raoul's presentation for future allocation decisions. The issue. We are not in a free market, the central banks are more informed that these issues are apparent, and they will react to avoid/ delay the expected "free market' outcomes. We know the central banks will: Buy corporate bonds Buy stocks Print money Suppress IR Negative IR I do not know if the central banks will lose control at this time or when they will lose control, so we don't know when Rauol's negative outcome may develop, or the timing of such event (even in the eventuality of a coming recession). One additional thought. If we see a huge flood to the USD as an outcome to the current framework, then the central planners also see this potentiality. As a (much) stronger USD would be expected to exacerbate the negative aspects of the current framework, then I would not rule out an orchestrated attempt to avoid any substantial run up in the USD, and could occur sooner than many would normally expect.
    • TR
      Travis R.
      16 July 2019 @ 05:20
      Absolutely! CBs and fiat money have changed the rules. Financial Repression is the name of the game now.
  • GG
    Gary G.
    16 July 2019 @ 05:19
    Learning so much from RV and TT. Thank you so much Raoul!
  • KD
    Kaj D.
    16 July 2019 @ 04:34
    Raoul, I’ve heard you say a few times that you established RV so investors would be warned before a crisis occurs. With this video alone you achieve that and of course you do so much more. So thank you.
  • WB
    William B.
    16 July 2019 @ 04:08
    Even more mind blowing than WestWorld! I’m outta my little loop for sure!
  • JQ
    Joseph Q.
    16 July 2019 @ 04:03
    All I can is Thank you!! For your insight! Corporate Cash flows are the key!
  • CM
    C M.
    16 July 2019 @ 03:53
    Agree that something could break at some point and it could get ugly. Though with Trump's election, the market has shown it has 9 lives and took a leap with the tax cuts and pro-business positioning of the administration. But similar to Lacey Hunt's stance, believe the debt blanket will weigh on the economic cycle and slowly break it down until those BBB rated companies do start getting downgraded. Also like Treasuries. Still on the fence about gold and silver. Not a fan of Bitcoin. Like equities that have high yields and whose products are not as discretionary in a downturn. Following up someone's comment below, though I don't own any of this stock, ATT is not one of the best examples in this video as I believe their cash flow will hold up better in a downturn to service their debt loads as studies show cell phones are the last thing a consumer will cut. But high debt companies tied to manufacturing or discretionary spending, I am looking to avoid. Do like healthcare as politics have hurt pricing and believe the government is disfuntional enough to not get anything done. Yet healthcare products will be in demand as baby boomers age out. Risk is in product pricing.
  • Hv
    Hannah v.
    16 July 2019 @ 03:52
    Every evening after work I come to Real Vision to learn. Every new term, graph, acronym, industry.. I google them all. Tonight’s stunning thesis sews up all the pieces into a terrifying and exciting patchworked realization of what may be up next. Oi!! I wish I could give you something to express my thanks for creating this channel and sharing your life’s work with us in this medium.. the best I can do is to say thank you from the bottom of my heart Raoul for your years of study and dedication and sharing it all with us on Real Vision. And thanks too for obviously being a great boss, partner and leader; your staff (and partner Grant) are exceptional. You and your team makes a difference. Hannah from the West Coast of Canada.
  • MM
    Michael M.
    16 July 2019 @ 03:09
    Raoul, excellent summary can’t wait for the rest of the videos.
  • MM
    Michael M.
    16 July 2019 @ 03:07
    Funny Illinois was mentioned, with the increase in the gas tax recently gas is $.60 higher per gallon than across the border in Wis. Also my relative works at a large public company, alot of the executives she knows have sold their real estate and are renting. They want out of the state which coupled with a recession should lead to lower tax receipts and the negative loop at some point.
  • CF
    Christian F.
    16 July 2019 @ 02:57
    This is sensational. I’ve been looking for answers to this issue I’m seeing for ages. Excellent work.
  • GF
    Gordon F.
    16 July 2019 @ 02:40
    Raoul talks about the big five companies with regard to BBB debt, and how no one else really matters, but I strongly suspect that if just one small but significant gets downgraded, the knock-on effects could start an avalanche that could then overwhelm the big five, and everyone else. Just because something is inevitable doesn't mean that it is imminent, but given the history of the markets in September and October, I am going to expand my protection, especially in my IRA. If things develop as Raoul has outlined, it would not surprise me (dismay, disgust, and several other things, but not surprise) if the Fed followed the BOJ and bought huge quantities of stocks, ETFs, bonds, etc., just to try to keep the market from falling too much, and to keep a bid under the market. In terms of a big-picture view, this is one of the finest RV has produced. I look forward to the next two weeks.
  • DH
    Daniel H.
    15 July 2019 @ 22:38
    I have been very critical of RV TV for their meanderings in crypto and their silly attempts to appeal to millenials. This video is the exact opposite. This is why I purchased RV TV. I already knew about two thirds of this, but Raoul packages it all in a very compelling scenario. I am now looking forward to the two weeks of companion interviews. Thank you, Raoul!
    • RP
      Raoul P. | Founder
      15 July 2019 @ 22:52
      Thanks. We have content for everyone and take it all seriously.
    • MK
      Michael K.
      16 July 2019 @ 02:28
      This was exactly a point I was making comments about crypto week and the curated video ad service for corporates. RV has NOT lost its passion edge and utility for me, and it only continues to unfold in delightful creative ways. Rock on Raoul. Brilliant usage of publicity and content to grow RV so that it can continue to do what you do.
  • ra
    rehan a.
    16 July 2019 @ 01:31
    Raoul - any chance RV subscribers can get a freebie on the doom loop report ?
    • MK
      Michael K.
      16 July 2019 @ 02:27
      Subscribe to think tank and it’s there this week. He posts GMI once or twice a year as a teaser. It’s very worth it. Lot of great contributors and some that are a little niche and you can pick and choose. Sometimes grant Williams sometimes Jawad Mian, you never know.
  • JG
    Joseph G.
    16 July 2019 @ 02:23
    Thank you Raoul for such a deep dive on the current financial situation globally. We have been marching in the direction of a debt and demographic train wreck for many years now and seeing the acceleration recently makes me a believer. In the end it comes down to gravity. What goes up eventually comes back down.
  • MB
    Mark B.
    16 July 2019 @ 02:04
    Excellent video. I agree with nearly all of it. Regards Raoul's comments on Facebook and Google being broken up. I agree with Stanley Druckenmiller's here. There is much more than just a US/China trade war. It's much more an economic war and a difference in values. In this economic war the US FAANG's line up against the US BAT's (Baidu, Alibaba, Tencent). In this context it will be silly for the US to shoot themselves in the foot by breaking up Google and Facebook. To me, there is much for to these companies than meets the eye.
  • RM
    Russell M.
    15 July 2019 @ 19:41
    Raoul, assuming your thesis plays out as you think, why express your trade in eurodollar or short duration bonds, instead of long bonds where there appears to be more beta? I’m an equity guy. To borrow a line from the movie Margin Call, which I recomend to viewers for entertainment, please explain it in simple terms as if speaking to a small child or an irish setter. Thank you.
    • RP
      Raoul P. | Founder
      15 July 2019 @ 20:18
      The curve steepens this short rates move more than long term rates. All rates are roughly the same currently thus there is no extra juice from the back end of you duration adjust the trade sizing (I.e add leverage to equalize the volatility)
    • RM
      Russell M.
      16 July 2019 @ 01:05
      Thanks Raoul. I think I get it. I was looking at short term swing beta and I’m guessing you look through that to the beta of the entire move you expect? And must be using more leverage than I was thinking. I’m sure the crowd would be interested in a segment on leverage for this kind of trade - too much verses not too much.
  • NR
    Nelson R.
    16 July 2019 @ 01:01
    Good presentation Raoul. One comment I will make is regarding your debt to equity chart for corporates. Debt/Equity gives you an idea of how much damage the debt load can cause to the issuers if things go really bad, but it does not say anything about debt sustainability. As Singapore and Japan teaches us all, debt sustainability is determined by cashflow. Sustainability in a downturn is the really key variable to understand, because as long as there is enough cash coming in to service the debt it may not get downgraded. So for your thesis what you really want to be looking at is the total debt outstanding of issuers highly indebted in the BBB universe WITH poor debt sustainability. For sustainability you should be looking at Net Debt/EBITDA not Debt/Equity. Taking as an example your picked poster child (AT&T), yes nominal debt outstanding sounds high but Net Debt/EBITDA roughly 2.7x , on the high side for an IG issuer but by no means something that would be labeled unsustainable or posing systemic risk. Plus remember, cell phone and data usage will be the last thing consumers will cut in a recession when Pornhub becomes the only entertainment left they can afford, so telco cashflows are somewhat antifragile. On your chart, GE and the automakers look more shaky as they are highly cyclical, have large debts and little ability to maintain current levels of cashflow in a downturn. GE = currently produces no free cash flow, F = 3.28x, GM = 3.46x. For perspective, Dow Jones Industrials components (proxy for blue chip names) average 1.5x - 2.25x. Thanks for the great content, Cheers.
  • CC
    16 July 2019 @ 00:23
    Why are none of the charts available in the transcript? Hard to review without them. Please advise.
    • IC
      Ibrahim C.
      16 July 2019 @ 00:47
      They are all available, maybe you are looking for something else?
  • RJ
    Russ J.
    16 July 2019 @ 00:18
    Just awesome thanks- for a geek macro economic/trader- love it
  • BN
    Barrett N.
    15 July 2019 @ 23:31
    Brilliant analysis as always Raoul & RV!! The good news is, we know a lot of the bad news to come! Thank you for your time and effort to condense the immense amount of information into one phenomenal interview. Great interview. Very sobering. Thank you! BN
  • FB
    Floyd B.
    15 July 2019 @ 23:28
    Just one small addition to the IL. pension problem..the other way they are providing funding to the system is the issuance of pension bonds,which are paid off with tax receipts,so in a way they are leveraging their risk under your macro economic scenario. Also,sorry but I don't like the commercials but look forward to this week's video series. Thank you for providing the explanation on how to best structure the bond trade and why it is better that buying duration,see below. Please provide more details in the future,also I hope others with compare and contrast their trade ideas with yours. Cheers
  • JG
    Jose G.
    15 July 2019 @ 22:45
    Can anyone explain why the debt ceiling renegotiation can end up in a big tightening this summer? I think os the other way around, the problem exists when they dont renegotiate the ceiling. Please enlight me thanks.
  • so
    steven o.
    15 July 2019 @ 22:38
    Raoul's chart of CRB looks different than $CRB on The chart is at 30 year lows and looking adequately depressed, quite different from the chart that was shown on the video screen. Looks to me like the the collapse in $CRB has already happened. What am I missing?
  • BM
    Bryan M.
    15 July 2019 @ 22:36
    Perhaps the best presentation I've seen on RV...and I've been a subscriber from almost the beginning. Can't wait for the rest.
  • JH
    Jesse H.
    15 July 2019 @ 22:20
    Raoul - you talk about gold towards the end of the presentation. What about silver as a "high beta" gold trade? Cheers, and can't wait for tomorrow's interview with ECRI - should be v. interesting.
    • JH
      Jesse H.
      15 July 2019 @ 22:21
      Realise we may also have a dampening effect on silver due to global economic slowdown...but if even half of what you are saying comes to pass, I can silver being a brilliant trade. Many thanks.
  • JV
    James V.
    15 July 2019 @ 22:06
    In the Spring of 2005, I was fortunate to hear Stan Druckenmiller at the Sohn Conference in New York lay out his thesis, in great detail, of the problems in the housing market and their implications, which, of course, led to the Great Financial Crisis three years later. His warning stunned the audience, who, at least from the people I talked with at the conference, were mostly in denial. I just heard an equally disturbing warning about the future of our economy from Raoul in this interview. Hopefully, this time more investors will pay attention. I know I will. Thank you, Raoul, for your vigilance and your courage to deliver a controversial but important message that needs to be heard and heeded.
  • bb
    billy b.
    15 July 2019 @ 22:02
    How does this play out in real estate? I would seem that the floating rate impact would hurt CRE because of its reliance on floating rate/cash out over time. Single/Multi Family Residential would seem to be a beneficiary since primarily fixed rate/need for housing/e demand to generate income for investors?
  • PJ
    Peter J.
    15 July 2019 @ 22:00
    Raoul Don't know if the probabilities of your thesis coming to pass are high or not, but I liked the logic. Looking forward to some of your guests challenging the critique over the next two weeks and give us ordinary joes a chance to make up our own macro view. I personally would like to see a weekly or fortnightly slot permanently in the schedule on the evolving macro situation with a focus on the global picture. To my mind it is the key topic at the moment and likely to be so for the next year or so.
  • JW
    Joseph W.
    15 July 2019 @ 21:52
    playing devils advocate here but any talk of recession/crash/toppling of the rich definitely sells more subscriptions than dry and boring consensus trend-following talk
  • DK
    Dimitar K.
    15 July 2019 @ 21:50
    Hi Raoul, thank you for sharing this big content! i agree with most of your theses! My thoughts about the bond market are different. Yes there will be a huge debt restructering. And i think ther will be one big currency devaluation for all countries around the world. It has to happen"by suprise". So people dont chase after gold/assets when that big devalutaion comes. Some banks will get bailed out or in. Still banks will have money to loan. So you keep the money/debt into the system. Otherwise we could have a hyperinflation type scenario. Bonds wont go further negative like they are already in Europe. Money will be printed but this time inflation will start rising. You cant use the "trick" twice like 2008/09. More likely we get "helicopter money". People will get the money directly (There are many different types in history). So inflation will start rising over the next 30 years and the rates will start getting higher!
  • JM
    John M.
    15 July 2019 @ 21:50
    Bitcoin has been banned in China. As Raoul says, the Chinese are building their own cryptocurrency. I wonder if it will turn out to be the perfect capital control mechanism. In the US, did Libra run into trouble because it looked like something that could really be big given the number of Facebook users?
  • ET
    Eduard T.
    15 July 2019 @ 06:25
    Great, thank you!
    • tr
      tom r.
      15 July 2019 @ 21:32
      A truly excellent video. Thankyou
  • BB
    Bojo B.
    15 July 2019 @ 21:14
    This was superb, thank you.
  • PS
    Poyan S.
    15 July 2019 @ 21:00
    I've really trying to find out if RAOUL is talking to some one or just looking at himself in a TV. lol it's a mystery?
  • BB
    Bullionaire B.
    15 July 2019 @ 18:30
    RP & Grant The Gold Standards of RV :)
    • PG
      P G.
      15 July 2019 @ 20:33
      O ya!
  • EK
    Emil K.
    15 July 2019 @ 20:11