The True Tightness of Money

Published on
November 7th, 2018
23 minutes

The True Tightness of Money

The Expert View ·
Featuring Raoul Pal

Published on: November 7th, 2018 • Duration: 23 minutes

Is the latest sell-off a "false flag" - or have we entered the broader topping process for U.S. equities? Raoul Pal, co-founder and CEO of Real Vision, expands his "macro is back" theme, exploring rising rates, the shortage of U.S. dollars in the global market, and explosive U.S. indebtedness. Filmed on October 31st, 2018 in Grand Cayman.


  • PK
    Patrik K.
    5 September 2019 @ 16:59
    Seeing this again after almost a year. Incredible forecasts.
  • AM
    Artur M.
    8 November 2018 @ 19:17
    I have a question - Raoul is talking about Libor 3Yo3Y% change (inverted) but on the chart, we see 2Yo2Y% (inverted) ( 12:40 minutes left )- which one is correct?
    • MF
      Michael F.
      15 July 2019 @ 19:08
      Based on Raoul's latest Recession video I found that the paramters to reproduce his LIBOR/ECRI Chart are 2Yo2Y% for Libor and 36 months lag for ECRI Weekly (NOT 24 months as shown in the video)
  • dk
    dobromir k.
    24 April 2019 @ 06:53
    Wow ... resperct for the knowledge and for showing to the world the way you think ! However, the prediction so far couldn't be more wrong. As Howard Marks said , the fact that something is well overpriced doesn't mean that is going down tomorrow.
  • Sv
    Sid v.
    9 November 2018 @ 17:57
    Great video. What about the Fed Put? Won't the Central Bankers come to our rescue?
    • LC
      Lloyd C.
      11 March 2019 @ 09:36
      Exactly what they did. 11 March 2019.
  • MH
    Marco H.
    27 November 2018 @ 21:21
    The babyboom generation, this presentation and Danielle DiMartino Booth are the three must see this year. But do have a question. I have seen the copper pricegraph. But when you look at inventory from the same LME you see a big drop in inventory from May onwards to just 30%. From inventory you would conclude demand is higher. Yet: price telling us the opposite. What is telling the correct story?
    • LC
      Lloyd C.
      11 March 2019 @ 09:35
      Probably trend towards electrification in cars and houses driving higher copper consumption.
  • RM
    Ryan M.
    26 January 2019 @ 04:08
    Being an extremely big Stan Druckenmiller fan, I find it quite comforting that Raoul did this interview a month and a half before Stan did his Bloomberg interview. Parts of this were nearly verbatim to what Stan told Erik. Would love an update from Raoul on his view of the state of global macro at the moment. Love the call though, it takes courage to be a pig!
  • JC
    Joe C.
    26 November 2018 @ 21:20
    "If you try and add into sell-offs, you'll have your face ripped off." "If you try and add into sell-offs, you'll have your face ripped off." "If you try and add into sell-offs, you'll have your face ripped off." I say this every night. Like a little prayer.
  • dm
    dan m.
    23 November 2018 @ 23:27
    Boobus Americanus living high on the hog.
  • NR
    Norbert R.
    11 November 2018 @ 17:08
    How to you play the bond trade?
    • CC
      Chris C.
      23 November 2018 @ 20:39
  • bs
    bob s.
    14 November 2018 @ 16:50
    What do we all think of the silver stocks here?? Wow could be quite an opportunity Excellent Raoul
  • YB
    Yair B.
    14 November 2018 @ 02:15
    Raoul, as always, fascinating! I think one of the things that separate you from others, is knowing when to say "I was wrong". This builds a lot of credibility in what you say.
  • AH
    Alan H.
    13 November 2018 @ 21:33
    A brilliant analysis and presentation, Raoul. Thank you.
  • DF
    Dominic F.
    11 November 2018 @ 12:25
    Thanks Raoul. Great analysis as always.
  • JV
    Joel V.
    10 November 2018 @ 00:46
    Good presentation with helpful slides. One of the comments reminded me of something Doug Noland said. Any chance you or Grant could interview Doug Noland again? His interview in 2016 was really good - would love to hear a follow up.
  • SM
    Sarit M.
    9 November 2018 @ 16:52
    Always love watching your videos, Raoul! Great analysis with so many different data points. As a retail investor wanting to learn more about trading bonds, what's the best way to learn the basics... I've heard the bonds section of this video multiple times but still don't think I can explain it myself. I'd love to get to a point where i can understand and talk in the same language. So welcoming any pointers that the group here may have... Thanks!
  • AW
    Arthur W.
    9 November 2018 @ 14:29
    Great video, agree with almost everything here! One of the only things that makes me hesitate from going net short this equity market is the following: if we get into a substantial correction scenario, what stops the FED from turning QE back on in order to bring everything back? This bull market seems to have been mainly QE fueled, why does that stop now?
    • TM
      The-First-James M.
      9 November 2018 @ 15:21
      I don't think anything stops the FED from doing that, apart from the potential hit to their credibility and the strengthening economy narrative they have planted and driven. I am certain they will come back in again with QE4. The only question is about what level they will come in at and how big the volume of shouting and screaming from market participants in a hole shoots up for them to do so. Personally, I doubt they'll be quick enough to stem the initial decline, and when they do intervene with QE, I can't see it being anything other than negative for the Dollar. It's just a waiting game in the meantime...
  • NG
    Nick G.
    8 November 2018 @ 09:09
    There are some very reliable models out there which are finally beginning to agree with Raoul. One of the most remarkably accurate ones, with the best long term performance, comes from asset spread measurements and it indicates that we are in a very early stages of a topping process, analogous to mid-2007, when the market was still resilient but the asset class spread relationships were breaking down and indicating trouble ahead. By far the best is on Something that RV should cover: very little is talked about spread relationships between equity sectors and asset classes, yet they are the most reliable indicators of future risk demand and market trend.
    • NC
      Nic C.
      9 November 2018 @ 09:49
      Yes, agree, some advanced models are beginning to show worrying trends and the best one I have seen is on
  • js
    jan s.
    9 November 2018 @ 08:01
    Man i love RV Thanks for this servace and i also need to watch this 3 more times
  • CM
    C M.
    9 November 2018 @ 03:07
    Technical topic: video screen is now too large in my Chrome browser (15 inch Windows laptop). Can't see the full graph unless I go to full screen. First time I have run into this formating issue on RV.
  • IM
    Istvan M.
    9 November 2018 @ 02:36
  • BH
    Ben H.
    7 November 2018 @ 17:55
    Retail investor here. I've twice re-watched the section about how to play bonds and I'm still not clear. Should I be in short or long term?
    • JO
      Johnny O.
      8 November 2018 @ 15:16
      I think Raoul is saying yields won't keep going up and so bond prices (etf TLT) will start going back up. It seems to have one more small down move in it. And then it is due a retrace up anyway. Some people think yields will continue to climb, and therefore long TLT is only a short-term retrace play. I think Raoul believes it is a much more long-term end to rising yields and therefore long TLT long-term.
    • CA
      Craig A.
      9 November 2018 @ 01:37
  • MS
    Mat S.
    9 November 2018 @ 00:45
  • HJ
    Harry J.
    7 November 2018 @ 17:43
    Please make a short comment on Gold Thank you
    • RP
      Raoul P. | Founder
      7 November 2018 @ 18:39
      Im still indifferent to gold. That time will change but not yet.
    • NI
      Nate I.
      8 November 2018 @ 02:23
      Suggest you watch the RV videos about gold with Simon Mikhailovich. Nobody gives a gold a more thorough and unbiased explanation. I have been accumulating PMs for many years because I don't think it will be possible to time it. And when you need it, you will really need it. It's a bit like hurricane insurance. By the time you see it coming, you won't find a company willing to sell you a policy.
    • HJ
      Harry J.
      8 November 2018 @ 18:58
  • RE
    Richard E. | Contributor
    8 November 2018 @ 18:50
    It is hard to argue with any aspect of this analysis. A couple questions I would have, which I think the more bullish prognosticators would suggest. First, in the US, companies lead consumers and not the other way around. The tax reform of 2017/18 was clearly targeted at companies and definitely not at consumers. It was a generational reform lowering US rates to inline with the rest of the world. Yes it has led to buybacks, but now that election uncertainty is out of the way and if trade uncertainty also goes, we could see an acceleration in capex. It has actually been quietly quite good. Second is China. China is a mess and has fallen quite substantially. However, they have also put an immense amount of stimulus in the system over the last 3-6 months. This acts with a lag, but couldn't we see this kick in at the early part of 2019?
  • gg
    georgy g.
    7 November 2018 @ 15:43
    Raoul how does election change any of the key points?
    • RP
      Raoul P. | Founder
      7 November 2018 @ 16:30
      Doesn't for me really. It's all about economics. Probably lowers chance of a large fiscal stimulus which reinforces my case a tad.
    • KS
      Kathleen S.
      8 November 2018 @ 15:01
      Raoul -- I know you are brilliant, but I totally disagree with you and your thoughts on election results not making a difference. I think due to the results there is now a willingness on both sides of the aisle to spend and spend like crazy. Remember all politicians are whores and would throw their own mothers under the bus to win, and most of them don't know anything about economics -- so when they see that the Republicans don't care about deficits then why should Democrates care -- reality all they care about is winning their next election. Trump knows winning the election was all about economics (it always is) -- For the democrates to win 2020 they need to give their constituents something and it can't be bigger social program give aways for the poorest (this is what has the middle/lower white blue collar base walking away from them) they need to win back the white voter in places like Michigan and Wisconisn and they can do this with infrastructure and middle class tax cuts. And if they don't and keep obstructing (as they have been doing) Trump will call them out on this and blame them for blocking his policies that would help the economy. And we all know Trump is really great at blaming and calling out others in a why that appeals and makes complete sense to the very white voters the Democrates are losing in droves.
  • KS
    Kathleen S.
    8 November 2018 @ 13:27
    What about infrastructure projects in US??? And Trump has also talked about a middle class tax cut --- I think with the Democrates winning the house they are now more willing to come to the table and make a deal. Before the elections the Republicans had total control, thus the Democratic strategy was complete obstruction -- this has changed and I think for the Dems to get their big blue wave they need to do SOMETHING and infrasture and possible middle class tax cuts is the ticket. Big cities are dying and this is the Dems constituency - the infrastructure projects can put money into these cities. Face it, the US doesn't care about deficits - (and Trump knows the US$ days are numbered) so "go for it". These big projects can give another pump to the economy and keeps the game going longer and I wouldn't forget about the tax cut for the middle class. The people don't have anymore money to spend and they are in debt to their eyeballs, but that doesn't mean the US Govt can't spend and I think it will and big time.
  • BF
    Bret F.
    8 November 2018 @ 10:12
    2001 and especially 2009-10 consumer debt was huge. But anyone and everyone filled bankruptcy. Have to wonder? If that is the mindset now. Its not like you have to give up your home or car. Just credit card debt and such. Tighten your belt for 3 years and off to the races again . The "Bankruptcy cycle"
  • SB
    Samuel B.
    8 November 2018 @ 09:59
    I think what will be interesting is US manufacturing stock (CAT, HOG, DE), stocks that have rallied signficantly in the last 2 weeks since the sell off but are manufactured in a higher us dollar environment making them less competitive vs other international firms. I think CAT still has 43% or so of its core manufacturing in the US. Many of these stocks are also very much linked to commodity markets and in a predicted recessionary environment with high manufacturing cost in US dollars terms this cant be healthy.
  • PM
    Paul M.
    8 November 2018 @ 09:57
    Eur is falling against USD? Sure if you don't believe in maths: 1,0516 the low in '16 vs. 1,1425 right now, all in the face of 'positive' carry in USD. As to EM funding in USD and consequent shortage - yes they do fund in USD but they typically get paid in USD as well, especially commodity-based economies. Great overview of problems in US economy and stock markets, much appreciated.
  • NI
    Nate I.
    8 November 2018 @ 02:16
    Thanks Raoul. Great piece. I agree with you on the long bond trade based on the economic outlook - it's pretty much textbook, but what worries me is simple supply and demand imbalance. Have you found any data as to whether or not there will be enough buyers to soak up the supply of bonds that will be issued in coming years? US debt is just exploding and neither party (D or R) seems willing to curtail any spending. Similar story in Europe. The whole damn world is awash in debt and I'm wondering if bond prices decline simply because there aren't enough bond buyers.
    • RP
      Raoul P. | Founder
      8 November 2018 @ 02:39
      The pension system and households dwarf all supply... then there’s the Fed if we go to recession
    • AM
      Andrew M.
      8 November 2018 @ 09:39
      And BAML fund managers surveys indicates managers will start buying the 10-year when yields hit ~ 3.7-3.8%. That's now, with equities at ATHs, so it gives you some protection. I'm sure that will come down if there are any major hiccups. Anecdotedly, I've spoken to many fund managers that agree that THE trade during the next crisis is long US duration. It's basically the only developed gov bond that has room to rally, and the Fed will be aggressive in their financial repression.
    • AM
      Andrew M.
      8 November 2018 @ 09:43
      But there is also some research (from Barclays I believe) that show curve steepeners are very hard to time before the Fed makes it's move. Raoul is clearly trying to pre-empt, and that's fine since the downside is probably limited (especially when it comes to shorter duration). I'm still so torn on rates in the short - mid-term that I'd be happy to wait before buying TLT - probably sometime next year.
  • BD
    Brian D.
    7 November 2018 @ 23:23
    What does GMI stand for? How is the composite constructed?
    • LC
      Liliana C.
      8 November 2018 @ 08:21
      Global Macro Investor
  • DS
    David S.
    8 November 2018 @ 00:43
    The short end of the US bond market may simply be showing huge-risk off buying from all over the world including the US. Where else can investors go as $US shortages continue to rise in FX markets. US rates across the spectrum are better than elsewhere for the risk. The normal gold spike is attenuated in $US now because of higher US bond yields and investors’ memories of losing money when gold got ahead of itself. US bond requirements are increase sharply because of tax and budget deficits. The Fed must keep US rates high to attract every buyer it can. DLS
    • RP
      Raoul P. | Founder
      8 November 2018 @ 02:41
      Actually, generally speaking the lower the yields, the more buyers they attract... function of safety and need
    • DS
      David S.
      8 November 2018 @ 08:10
      I, of course, bow to your knowledge and experience on trading in FX and international bonds. I am just looking at capital preservation. I believe that many worldwide investors also want and need to preserve capital. Many are probably investing in US bonds even at high $US FX rates. I would rather have a 2 yr. US bond at a higher interest rate than a 2 yr. Italian bond at a lower rate while I wait for a major market correction. When Mr. Draghi stops or is forced to stop buying Italian bonds for any reason their value will plummet. I am lucky that it is my own money. I should have enough if I do not lose the principal. I simply could not invest other-people’s money. I would freeze. DLS
  • JD
    Jeff D.
    7 November 2018 @ 22:42
    Super good. Thanks for the warning! Raoul, I follow Stansberry research, mostly for a different perspective, and they are calling for a crazy "melt up!" and are selling subscriptions shamelessly. I never take their advice, and sometimes even trade the opposite of their recommendations. They probably don't even trade their own money anymore, because they make a fortune selling subscriptions. I'm planning on loading up on LEAP ( +2 years) put options as soon a volatility cools off, in the next month. That ( +2 years) should give my trades time to be right. Question: What might cause some kind of "melt up" and would it only happen in a few select stocks? Thanks
    • JO
      Johnny O.
      8 November 2018 @ 07:32
      I like that plan. The Dow has already retraced an amazing 70% of the October melt-down. FAANG and Nasdaq don't look so strong. But need to see if the melt-up so far is a correction to a bear or leads to new highs. I fear Donald Trump was at a sentiment high and may find upside surprises more difficult to pull off.
  • JO
    Johnny O.
    8 November 2018 @ 07:20
    Just a bit early on TLT in the previous video; still a good call. Seems to be in a final 5th wave down now; then should rally. Still expect USD up.
  • SS
    Steven S.
    8 November 2018 @ 06:57
    Very nice and extremely informative and valuable as usual, Raoul. I agree with almost all of your assessments (well, I also disagree with the Google story ...I would argue with the 'canary in the coal mine' view of Google), but I did have one question: I haven't seen the data on fixed vs. adjustable mortgage percentages since 2008. I would think that many homeowners and real estate investors have fixed rate mortgages and thereby aren't subject to this recent 30+% recent increase in rates. Hence, the macro impact from mortgage servicing expenses might not be as profound as you're thinking. Is there a good source for that you'd recommend on the percentage of adjustable mortgages in the US? Thanks again. I always learn a tremendous amount from RV and MI.
  • RP
    Raoul P. | Founder
    7 November 2018 @ 14:42
    ok, who gave me the downvote? ;-) I bet it's one of the Real Vision gang...maybe Milton himself...I cant trust me.
    • RP
      Raoul P. | Founder
      7 November 2018 @ 14:43
    • RL
      Radu L.
      7 November 2018 @ 15:00
      me/him...freudian slip much? :)
    • DS
      David S.
      8 November 2018 @ 00:10
      A thumbs down shows that you actually said something important. If they do not comment, then it is of no importance. DLS
    • CM
      Carl M.
      8 November 2018 @ 03:53
      You just had to make Milton a "Ginger" didn't you!! I might have to reconsider my thumbs up.
  • WM
    Will M.
    7 November 2018 @ 11:38
    It feels like there is a general refusal to look at the facts and deny the raft of issues facing economies. Add to Raoul's comments the escalating pension crisis which has DIRE consequences for the retiring baby boomers and consider the impact of falling stock markets on pension funds and retirees. The private, public and social security crises are all going to hit us within the next few years in addition to another financial crisis. The FACT that there is now more debt risk than in 2007, the FACT that China represents a massive banking system bust in the wings, the FACT that Brexit is now at hand, the FACT that Italy is so close to precipitating another Eurozone crisis....... and it goes on and on. Are we actually underestimating the magnitude of the coming crisis and the likely extent of government intervention to address it? Feels that way to me.......
    • DS
      David S.
      8 November 2018 @ 02:46
      Thanks for the correct additional perspectives. The government is out of bullets. Congress and the president are now dysfunctional. If Clinton would have won, the Republicans would have her in hearings all the time. Now, the same will happen with Trump and his administration. I am in $US dollars mostly now, maybe gold if I see a breakout. DLS
  • SD
    S D.
    7 November 2018 @ 23:07
    Analysis on Italy is thin on the ground. I think it's because everybody hates the populists. But I think they have a pretty good hand to play, really. Do you agree? I would be really interested in how Realvision sees Italy playing out. People are now pointing to France, and its deficit, questioning where this ends. If the entire Brexit vote and Visegrad 4 actions are all predicated on resistance to the authoritarianism of the EU Commission, surely there's a story here that's much larger than the Italian debt. Italy seems intent of forcing through radical change on the EU and that changes everything. Doesn't it? Am I wrong? You've talked about Spanish banks, but surely Italy is far more serious but also politically significant? And nobody talks about how diminished the EU will be once the UK leaves. The UK supplies 20 percent of the EU budget. Anyway sorry for the rant, it'd just be great if somebody actually did some sensible reporting on the EU for a change.
    • SD
      S D.
      7 November 2018 @ 23:13
      And Rome is speaking to both Russia and China about funding requirements. The Italian finance minister was in the FT the other day emphasizing the government's commitment to the voters, and pointing out that he comes from a region with 60 percent unemployment. There is growing dissatisfaction among the EU membership, and it is being avoided as an issue by a mainstream media sympathetic to the EU project and out of touch with the current mood among voting publics.
    • DS
      David S.
      8 November 2018 @ 02:28
      Personally, I think everyone I know loves Italy and Italians. I certainly do. I believe that Raoul's emphasis on the Spanish banks is their large exposure to Turkish and Latin American debt. The political imposition of the Euro was an economic and moral mistake. China and Russia like the US are deeply in debt and do not have the wherewithal to bail out Italy much less the Euro. Pressure on major changes to the Euro structure will just destroy it. The only way the Euro could have worked was that every country had to obey all the initial rules forever. This, of course, could never have happened. I do not know what the end game will be. It will be very hard on all the citizens of Euro Countries and the rest of the World. I wish you and all of yours the best of luck. DLS
    • WS
      William S.
      8 November 2018 @ 02:32
      I am a major italophile, have lived and traveled extensively in Italy; I'm extremely fluent in Italian, and follow the Italian situation closely. IMO, Italy's best play would be to "move first" in terms of getting out from under the thumb of the EU, taking its lumps in terms of allowing defaults to happen, re-establish the lira, and pivot significantly (though not exclusively) towards Russia and Eurasia. That being said, Italy is not a unified country. Its regional differences run deep and date back centuries. It is, in many ways, still several different "city states" joined together only by a common language. In short, I'm far from convinced that it can manage to combine its various regional strengths in order to both handle the hard times to come and then to rise again and prosper in the aftermath. Even so, I will be rooting for them all the way.
  • DS
    David S.
    8 November 2018 @ 01:44
    US baby boomers with money are spending on food, clothing and travel. Next it will be nursing homes and they know it. So back to the restaurants - no dishes to wash or house to clean - clothing and travel. DLS
  • RH
    Rick H.
    8 November 2018 @ 01:16
    Love to see these updates from Raoul. I originally was skeptical, but am now seeing the pieces of his puzzle fitting together. Speaking of regular updates...Really miss Grant's weekly commentary on AIF and wouldn’t mind seeing the occasional video update from him as well.
  • AD
    A D.
    8 November 2018 @ 00:36
    If spending is rising in "eating and shopping" financed by credit cards it can last a while, since , at least here in the US, nobody told cc companies of impending risks- it's easy approvals and teaser rates galore. I have "fair' credit (in large part due to maxing out on 0% APR offers) and still credit is super easy to get. My housemates (Millennial vagabonds) get 2-3 ccard teaser offers per week each, in absentia. I am trying to be careful, but live and let live. Best, AD.
    • DS
      David S.
      8 November 2018 @ 01:02
      Best to you too A. D. - You have played the game well for now, but the 0% loans will dry up in an instant when the recession hits. It is no fun, but I would suggest that you get an extended term bank loan or equity line of credit to pay off most of your 0% credit card debt, while you can. You will establish much better credit and have much lower interest on your debt when the merde hits the fan. Good luck. DLS
  • JF
    Joseph F.
    8 November 2018 @ 00:26
    Excellent perspective. The best, no bs financial web site ever!
  • VS
    Vasil S.
    7 November 2018 @ 23:54
    Strong, as per usual!
  • LP
    Lynn P.
    7 November 2018 @ 21:02
    This is the kind of of information that I look forward to in subscribing to RealVision. Most of the videos are interesting but too esoteric for my smaller portfolio. This video was a clear warning, along with cogent advice to "not get my face ripped off". I tend to lower my average cost by buying on the way down, so maybe this time I'll wait for what looks like a bottom and add on the way up.
  • CC
    Christopher C.
    7 November 2018 @ 21:00
    Very interesting development given your premise. Curious to see if it is one time aberration or continuing/growing trend. Suspect the former.
  • JL
    Juan L.
    7 November 2018 @ 20:58
    Gracias Raoul. Many large Spanish banks do have a problem with EM exposure, but it´s not on the news. Peolple is worried(entertained about a supreme court decission of who pays (client or banks) a tax related to mortgages. Almost nobody sees the storm is coming. IMO
  • MR
    MARK R.
    7 November 2018 @ 20:50
    *keeps powder dry*
  • MF
    Michael F.
    7 November 2018 @ 20:39
    Just a remark with regard to the RMB Chart - a cup with handle is not a bottoming formation, it requires a prior uptrend from which price builds a base. In this case it looks more like some sort of inverted head & shoulders formation.
  • KL
    Ken L.
    7 November 2018 @ 20:28
    Can you please comment on oil? I remember watching "The Exchange" where you and the guests were discussing the sequence of markets to fall before the bubble finally pops and markets become 1 big trade. I made a checklist to track that sequence (Bonds -- EM -- Equity Markets -- Copper -- FANG -- Oil) and noticed only oil was remaining. I realize WTI is near a bear market, but would like to know your thoughts. Thank you.
  • CQ
    Colin Q.
    7 November 2018 @ 18:00
    Hi Raoul. Appreciate this is macro and I appreciate the US is a leading group of indicators. Is similar available for UK? Could you perhaps build a “macro” picture for the UK? And help people position themselves?
    • RJ
      Ryan J.
      7 November 2018 @ 20:01
      Yes please!
  • LJ
    Lucille J.
    7 November 2018 @ 19:23
  • SS
    Sam S.
    7 November 2018 @ 18:56
    Raoul looking sharp and sounding even sharper! Top Notch discussion what the data is telling us and what to be aware of. The "tell" is a real tool for us to understand. Terrific!
  • MH
    Manuel H.
    7 November 2018 @ 18:43
    Gracias Raúl!!
  • AH
    Andrew H.
    7 November 2018 @ 15:41
    I am really interested in the U$D in this scenario. I realize that the U$D is a safe haven, but a further move would really crush EM. There is a long list of items that would be U$D weak: End of IR increases, further pain in EM, increased deficit/debt(especially w divided government). I can see a scenario where US equities underperform, U$D falls and the rest of the world does better on a relative basis, commodities could do better on an absolute basis. Time will tell, but I am in a holding pattern watching IR and U$D, for determining my future allocations(PM, EM, commodities, maybe zero coupon bonds if things really begin to unravel).
    • gg
      georgy g.
      7 November 2018 @ 18:04
      Thank you Raoul! Tend to agree, but weaker usd on margin helps markets a touch. Also think HFs returns are poor this year so a chase into YE is possible, even likely, no?
  • CC
    Chad C.
    7 November 2018 @ 17:37
  • rr
    rlw r.
    7 November 2018 @ 16:52
    A really comprehensive macro overview, thanks Raoul. Plus the many chart overlays were really super. An excellent presentation.
  • BS
    Buy100oz S.
    7 November 2018 @ 16:42
    Always enjoy Raoul's presentations, he needs to come on more often. Big fan of looking at lots of charts as well!!!!
  • JL
    Johnny L.
    7 November 2018 @ 16:20
    That closing comment is about all you need to take away from this presentation.
  • NH
    Neil H.
    7 November 2018 @ 15:34
    excellent as always but no comment about last nights election unless this video was done prior or the election does not matter. If the democrats are able to slow down Trumps fiscal policy initiatives, won't that give the Fed more room to stop hiking, and if so won't the dollar decline instead of rally.
  • HO
    H2 O.
    7 November 2018 @ 15:17
    Thanks very much for a great update. Agree completely that the investing herd in the US is pretty much oblivious to the cracks in the growth cycle, and the likelihood of a Fed pause after December. I am familiar with the core-periphery framework, but am confused at this point as to causality and consequences. By that I mean that the GFC was the first major crisis to be caused by the core in a long time, and the prospect of a major correction in US equity and bond (HY and gov) markets is an even bigger risk to EM than current USD liquidity tightness. At the same time, in the absence of an immediate central bank bailout in the event of a downturn - and the expectation should not be for reflexive QE - this means that foreign savers (predominantly from EM) are probably going to demand higher risk and term premia on US treasuries given the expansion of US twin deficits and/or because the dollar is going to plummet. In other words, the core-periphery model seems to have blown up like everything else. After an initial flow of USD funding back into the US (where we are now), it is unclear to me why USD assets should be attractive for ROW in the event of a major US market correction or recession. Couldn't guvy yields have to correct higher first, before stabilizing? Based purely on Fed rate hiking schedule, sometime early next month we should be buying the front end of the US curve. But, isn't it also possible that capital outflows from the US and US recessionary effects dominate rates, at least during the initial adjustment?
  • CD
    Chris D.
    7 November 2018 @ 14:16
    "I'm a seller at zero - that's how bearish I am" - B.F.
    • CC
      Christopher C.
      7 November 2018 @ 15:05
      Love me some Fleck!
  • KC
    Keith C.
    7 November 2018 @ 14:21
    Like it, especially on the last part about reducing shorts in sell-off and loading up shorts in rally. Just out of interest, Raoul, is the credit market something you look at as a potential forward indicator for stock market please? Thanks!
  • PC
    Philip C.
    7 November 2018 @ 12:06
    Nice, well argued piece. You don't say a lot about USD, but I presume you are still bullish. It would be nice to get Luke Gromen back in and hear the two of you duke it out.
    • CL
      Charles L.
      7 November 2018 @ 14:13
      I'm looking forward to another Mike Green - Luke Gromen interview. If I'm not mistaken it's been over a year now since the last one. Curious to hear their thoughts on how capable the US is at withstanding a stronger dollar given such a big portion of tax receits depend on stock market valuations. If this is true and Raoul is right, then what will be the effect on capital flows towards the US and thus on the currency this time?
  • JM
    Joakim M.
    7 November 2018 @ 13:57
    found this fixed residential investment chart extremly interesting .Where can I found that? Or a proxy on it.
  • EP
    Eli P.
    7 November 2018 @ 12:21
    we love raoul !!!! -he is the man-pleaser keep update us as much as you can .
  • TJ
    Terry J.
    7 November 2018 @ 12:06
    A timely reminder Raoul, and serious food for thought. I have long since agreed with your thoughts on US Treasuries, but been less sure about your dollar and equity market views. The excellent charts you showed here now make the latter argument much more persuasive for me. It has also reminded me that I must rewatch your excellent video on the baby boomer crisis that will almost certainly unfold over the next decade. Thanks again.
  • OS
    Oliver S.
    7 November 2018 @ 11:19
    A useful update. It's been interesting watching the story unfold.
  • JM
    John M.
    7 November 2018 @ 10:25
    Once Again Raoul, WOW! In addition to the many excellent points you listed, Leverage, IPOs, M&As, Corporate Buy Backs also indicate we have been building a massive top. Additionally, with due respect to Dave Floyd, Elliott Wave analysis indicates near term potential for a "third of a third" event. This correction is different. "Buying the Dip" isn't as strong as it was earlier this year. But complacency seems to be at a high. We have broken major trend lines in most markets and no one seems concerned, possibly as you mentioned, because interest rates haven't inverted. In my humble opinion, manipulation of unemployment and inflation data has also caused the vast majority, including the Fed, to misjudge where we are in the cycle. The average person can't afford new homes, cars or major appliances. So they spend on small luxuries such as clothing or a meal out and of course, use a credit card. And you are right, Schlumberger is a tell. I've been involved in the oil industry for four decades and have seen many boom and bust cycles. I am also concerned that the recent run up and fall off in prices indicates a risk of recession immediately ahead. Since the debt around the world is higher than it was in 2007, I also expect that the problems ahead will be worse. I hope we are wrong, but fear we are not. Thank you once again.
  • BM
    Bruce M.
    7 November 2018 @ 10:17
    Pithy, well evidenced and very well presented in Raoul's incredibly logical fashion. Bravo!
  • VD
    Viknesh D.
    7 November 2018 @ 10:09
    I love Raoul’s analysis a lot. And your presentation is so clear. I agree that this is super spot on. I just still slightly differ on the time horizon. Whilst Q1 2019 is caveated to be a probability , I think the first wave of bomber attacks would unfold by Christmas 2018. Thanks Raoul in any case for the warning on the difficulties in trading an unfolding downturn!
  • AR
    Abishek R.
    7 November 2018 @ 09:50
    Spot on. Superb.

Mark Yusko

Morgan Creek Capital Management, Co- Founder, CEO, & CIO

Mark Yuskois 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 authoredThe Mobile Wave: How Mobile Intelligence Will Change Everything, which earned a spot onThe NewYork TimesBest 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 offeringwhichutilizesa 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 innovativeways 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 channelwatched 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 hebegan his career by training traders in technical analysis.

Peter McCormack

What Bitcoin Did, Journalist

Peter McCormack is a full timejournalist/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 humaninterest recordings, documentaries and films Peter has recently launched theDefiancepodcast andDefianceTV.

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 clientsand 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 whichhe 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. Meltemoversees 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.