Don’t Ask Me About the Yield Curve

Published on
April 4th, 2019
53 minutes

Don’t Ask Me About the Yield Curve

The Interview ·
Featuring Tony Pasquariello

Published on: April 4th, 2019 • Duration: 53 minutes

Tony Pasquariello is an old friend and colleague of Raoul. As the partner who runs Macro Sales at Goldman Sachs, he is one of the most connected and respected people in financial markets - and has the ear of the most successful investors of all time. Tony discusses his out-of-consensus bullish views on equities, how he sees the macro opportunities playing out in 2019 and where he sees the biggest risks. Filmed on March 28, 2019 in New York.



  • gg
    georgy g.
    16 April 2019 @ 17:40
    Bearish arguments always sound so smart! This was a good change at RV
  • MM
    M. M.
    8 April 2019 @ 18:06
    So what would be a way to trade volatility? Some pointers for novices would be nice now and then.
    • RS
      Robert S.
      14 April 2019 @ 14:32
  • AS
    Amit S.
    8 April 2019 @ 11:09
    IMHO CBs drive liquidity which in turn drives the markets. GDP and earnings driving the markets apparently does not apply in the current scenario.
  • FM
    Faris M.
    7 April 2019 @ 21:10
    Just buy US equities;There’s a reason they’re nicknamed ‘Government Sachs.’
    • LC
      Lloyd C.
      8 April 2019 @ 09:01
      I like baldman goldsachs. lol
  • MS
    Matthew S.
    5 April 2019 @ 17:13
    This interview is unique in that there is constructive debate between a relative bull vs a relative bear. It avoids the echo chamber dynamic that exists when you have a interviewer teeing up questions for an interviewee who agrees with him. I'd like to see more RealVision interviews structured this way. Thanks!
    • JH
      Jesse H.
      5 April 2019 @ 17:44
      Well said. Completely agree.
    • DS
      David S.
      8 April 2019 @ 03:30
      Both respect each other and each other's opinion. This is a civil conversation. Thanks. DLS
  • AG
    Adam G.
    8 April 2019 @ 02:52
    "idiosyncratic opportunities" when Goldman starts spewing this garbage take cover.
  • aa
    allan a.
    8 April 2019 @ 00:12
    Couldn't watch it past the first 3 min. When unemployment is down and stops dropping for over a year and 4 month, and the yield curve inverts then starts to un-invert we go into a recession. Just punch it in the FED graphs. The unemployment rate stopped falling in April of 2018. Add a year and 4 months to that and then wait for interest rates to start to go back up. The inverted yield curve with the corresponding falling interest rates is acting as a temporary stimulus.
  • wm
    willem m.
    7 April 2019 @ 10:39
    Another U$ centric view. We need to hear more inside from China/Asia.
  • GS
    Greg S.
    6 April 2019 @ 05:22
    He contradicted himself referencing Buffett saying is it better to be in or out of stocks. Well Buffett is majorly out sitting on tons of treasuries/cash because valuations are too high.
    • PP
      Patrick P.
      7 April 2019 @ 10:28
      I think you missed Buffetts point ...he is not a retail investor.....he's looking for a huge company to buy with all that cash and he hasn't found one cheap enough.
  • JH
    Jesse H.
    5 April 2019 @ 18:26
    Very good interview, and good to hear both sides of different issues. Raoul and fellow RVers - can you please explain to me how corporate buybacks are not essentially a not-so-subtle form of a Ponzi scheme? You are basically artificially goosing the stock price of your own company using cheap debt, taking shares effectively out of EPS increases. How are market participants not seeing that this is a big accident waiting to happen? I.e. probably a big reason for Fed dovishness is that further increases in rates would have caused this problem to surface in a nontrivial way. Please explain - trying to understand exactly what is going on here.
    • DS
      David S.
      7 April 2019 @ 03:06
      Jesse H. - I agree with you, but it is more like an executive compensation scheme. You issue a lot of stock options and increase the price of the stock with corporation funds. Much easier than investing in an uncertain world. Corporations are buying back $900 billion dollars of stock in 2019 per Mr. Pasquariello. Corporation buyback at high P/Es are certainly driving the market. I am sure that there are other reasons for corporate buybacks rather than just executive compensation. RVTV could do a comprehensive program on stock buybacks and give us a complete picture. One thing is for sure, if corporations stop corporate stock buybacks for any reason, the market would probably drop significantly. DLS
  • DC
    Dean C. | Contributor
    6 April 2019 @ 22:16
    why oh why is the giant sized clock of time left in the interview to keep popping up in the middle of the screen? so distracting.
    • RP
      Raoul P. | Founder
      6 April 2019 @ 22:40
      You just need to move your mouse off the screen
  • AB
    Aditya B.
    6 April 2019 @ 16:41
    Raul’s questions were good. His inputs challenging the guest were great ! Overall, a good balanced interview with lots of take home ideas ! I especially liked the ending where you could gain some insight into corporate buy backs by following the corporate credits.
  • RK
    Roger K.
    6 April 2019 @ 14:42
    One of the best interviews! Thank you.
  • GG
    Gary G.
    6 April 2019 @ 06:36
    Thank god finally a bull and not another brainless bear. Great conversation.
  • JP
    Jeffrey P.
    6 April 2019 @ 05:28
    This interview really challenges my current bear bias. After getting burned pretty bad in Q418 I've largely soured on the endless growth theme, obviously missing the Q119 bull run, but perhaps deep OTM SPY calls may be worth a serious consideration but I don't think IV is as low as he claims. Great interview overall, this is the content I've come to expect and admire from RV. Keep it up!
  • RS
    Ranjit S.
    4 April 2019 @ 21:07
    Classic 1st order thought process.....
    • AG
      Adam G.
      6 April 2019 @ 02:16
  • MZ
    Matthew Z.
    5 April 2019 @ 17:33
    Great interview. Raoul doesn't believe a dang thing coming out of this guys mouth. Awesome
    • AG
      Adam G.
      6 April 2019 @ 02:16
      But he’s so polite.
  • LJ
    Lucas J.
    4 April 2019 @ 16:40
    I think these guys who spend there time in the financial centers of New York, San Fran and London are completely out of touch with what is going on in the global economy. Europe, South America, Australia, the heartland of the USA are all economically weak and they act like ll is well. The point he makes about Europe adding one company to the 500 largest companies yet not selling MSFT because Germany had a bad manufacturing print is blows my mind...the global economy is completely linked together and you cant have the rest of the world sick and have USA stay healthy. I am sure Tony is a good guy but he does run Macro Sales at GS.
    • LJ
      Lucas J.
      4 April 2019 @ 16:44
      sorry "their time"
    • DS
      David S.
      4 April 2019 @ 18:14
      The world of finance and the real economy overlap, but do not coincide. Mr. Pasquariello is managing the money of the one percent. There is no doubt that he understands your point of view, therefore, he hedges his client’s portfolio. As in the 2008 crisis, his major problem will be the counterparty risk paying off his hedges. DLS
    • LC
      Liliana C.
      4 April 2019 @ 22:58
      Well.. perhaps both views are too broad? I am in South America at the moment; Bolivia to be precise. This place is humming along nicely and has been for at least the past 15 years. Hear the same about Peru. Most people don’t know or care about Europe, the US or developed ROW.
    • RM
      Rainer M.
      5 April 2019 @ 18:05
      Agreed Lucas, and as you stated it GS macro "sales" not research either. The bullish forever narrative is easier to sell than have a less constructive view on risk assets.
  • JH
    Jesse H.
    5 April 2019 @ 17:46
    Very engaging and interesting interview - great to get different views, and I like how Raoul really listens to Tony, and like Grant, keeps the focus on Tony's views, even though he almost certainly disagrees with many of them.
  • NG
    Nick G.
    4 April 2019 @ 14:57
    SPX volatility in single digits? Hmmm. You have to go to September over 3,100 for it to drop pennies under 10. Otherwise agree with his views. Very sensible. New ATHs in stocks, bonds very much sideways, USD contained upside.
    • AK
      Arthur K.
      5 April 2019 @ 16:48
      I checked and see it under 10 now.
  • MB
    Michael B.
    5 April 2019 @ 07:36
    I didn't get the point re the Candy Brothers and $ strength. Surely dollar strength helps the oil oligarchs afford London flats?
    • JA
      James A.
      5 April 2019 @ 12:06
      I think he was alluding to the fact that with $ strength oil prices (as a lot of commodities) would automatically be priced lower in $ terms meaning less wonga to spend on expensive Kensington houses.
  • BS
    Bernd S.
    5 April 2019 @ 09:47
    Another great interview! But I'd like to challenge Tony's and Raoul's take that "there's been cleaned out so much last February" so that there's unlikely to be another ghost around the corner. There's an interview with Chris Cole at Macro Voices ( where he takes the exact opposite stance, and backs this up by numbers: If I remember correctly, he guesses (thinks/knows?) that before February last year there were 2 or 3 trillion in assets in the vol-trade, and only 5 billion of those were cleaned up in February 2018 - the rest, he expects, will unwind over a timeframe of another 1 to 2 years. Would love to have Real Vision interview Chris Cole, and maybe somebody who takes the other side of his argument.
  • DS
    David S.
    5 April 2019 @ 09:45
    The video is well worth watching a second time. Compared to Mr. Pasquariello, I am like Chance the gardener in the movie Being There. And yet, I am not as sanguine as he is about the near- or long-term stock markets. Maybe his long-term, family office perspective gives him a better view of the future than I have at 73. Today's announcement by Samsung of a 60% drop in 1Q2019 profits did not help. DLS
  • LH
    Laurent H.
    5 April 2019 @ 04:20
    Very good. Evidence to back up every point but still has good awareness of the bear side for stocks
  • gg
    georgy g.
    5 April 2019 @ 00:31
    Finally, non bear!
  • RM
    Ryan M.
    4 April 2019 @ 23:02
    I am getting sick of being a cheerleader, but wow, being able to listen to these conversations is such a pleasure.
  • JZ
    Jeffrey Z. | Real Vision
    4 April 2019 @ 15:12
    Tony was awesome...come back! Nice to hear a nuanced yet balanced look at where the opportunities are in global markets.
    • DR
      David R.
      4 April 2019 @ 20:38
      Yes, and without all those f-bombs like in your Think Tank interviews.
  • DS
    David S.
    4 April 2019 @ 19:56
    Suggest RVTV presentations on the Tri-Polar World with Mr. Pelosky. DLS
  • mw
    mathias w.
    4 April 2019 @ 19:20
    Great interview. What was the chart he referred to, new cyclicals vs old cyclicals? Sox semiconductor index vs dow Jones transportation index ? Not at an ATH as he mentioned...
    • mw
      mathias w.
      4 April 2019 @ 19:21
      19 min in
  • TY
    Tyler Y.
    4 April 2019 @ 19:21
    Excellent! This is quintessential RV! Views from two incredibly knowledgable people that you wouldn't have access to otherwise. This interview is like Marco-Insiders-lite.
  • DS
    David S.
    4 April 2019 @ 19:17
    Over the last 40 years in constant dollars, US wage purchasing power has not changed. To look at wage growth over last year does not tell the story. This is why the natives are restless. DLS
  • DS
    David S.
    4 April 2019 @ 19:00
    It is reasonable to say the 12/24/19 market sell off and recovery was Fed related. It does show the liquidity problem of everyone trying to exit the market at one time for any reason exacerbated by the holiday. There are always major market moving events. Each one will be a greater or lesser liquidity trap. Rather than be invested and trying to get out, I am out waiting to get in. The world’s smallest family office. DLS
  • DS
    David S.
    4 April 2019 @ 18:38
    The market consequence of massive corporate buybacks is another grey swan. Corporate buybacks are a strange use of corporate cash flow when P/Es are high. It seems even more foolish to borrow to buy back stock. Part of the buybacks are recovering stock option dilution for executive pay. Corporate buybacks at one time were considered stock manipulation. Now they support the markets. Mr. Pasquariello asked the question what happens when massive corporate buybacks stop? RVTV is the best place to do a research video on this. DLS
  • JS
    Jason S.
    4 April 2019 @ 15:24
    Stocks only go higher yet nobody’s bullish?
    • KC
      Kenneth C.
      4 April 2019 @ 17:46
      Money has to seek a return no matter how unpleasant.
  • AG
    Adam G.
    4 April 2019 @ 17:43
    Vampire Squid now casting ... love it
  • VP
    Vincent P.
    4 April 2019 @ 15:16
    Cut. Out of respect for Raoul, no further comment.
  • MM
    Michael M.
    4 April 2019 @ 14:22
    Agree to disagree that US has more “scope to cut”. Deficits rising & size of treasury roll next 12 months is under appreciated factor here. Private money has been replacing sovereigns at treasury auctions. More price sensitive & fickle as buyers.
  • SM
    Shane M.
    4 April 2019 @ 13:26
    Very interesting interview, great to see something non consensus, bullish and yet still actionable on RV
  • Nv
    Nick v.
    4 April 2019 @ 12:38
    Citi Economic Surprise Indices have changed quite a bit since this recording. US have tanked and EM and Europe is bouncing
  • AM
    Artem M.
    4 April 2019 @ 12:28
    At least on the Europe comment I don’t agree, even though “Europe” has not created any new companies, does not mean that the companies that ‘start’ in America do not have a massive European presence. Therefore a slowdown in the European market will absolutely have an impact on their revenue and theoretically share price.
  • VH
    Vladislav H.
    4 April 2019 @ 10:32
    Curious and pleasant conversations, but with a few doubts ;)