"We're used to being the apex predator." But COVID may be pushing us aside. Brilliant, thought-provoking guy, terrific interview.

Hey Why is this Transcript not being uploaded ??

In regards to the question of why the VIX is still elevated, the index is just a reflection of option pricing volatility. Calls are elevated because of retail buying and puts are elevated because professionals are bearish for obvious economic reasons. Not sure if that means anything profound.

Sven is an expert at sounding smart while saying nothing.

Waiting for the Transcript and the charts of the talk pl

Best guest yet. That nervous laughter at the end really put a fine point on the whole situation.

Long term, multiculturalism fails, because it's purpose is to break down unity. Economics never last, but they can cycle back ... but this time there is no US identity, and too many institutions are dividers and anti-American. So, this time is different than any other "recession" or "depression".

If you have limited time, then watch the final ten minutes of this. Very important secular shift perspectives shared.

Nothing funny about losing our freedom and liberty.

That VIX is breaking below key support now too. The hapless USA, in my book one of the bigger basket cases in the world today, has turned to Venezuala's recent playbook - print endless trillions, nationalize debt markets, combine the central bank with the treasury, monetize everything, and see the *nominal* price of shares soar. The cost of life's essentials will soar, as they're already started rising (notwithstanding the BLS Bureau of Lying Statistics), and the average person eventually experiences a collapse in their personal economy. The US street riots are just starting and later they'll become much larger, widespread, common and aggressive. Anyone expecting a different end result for the US than Venezuala might be in for a rude surprise.

‘In Thursday’s press conference, Ms Lagarde said it was not the ECB’s role to “close the spread” in sovereign debt markets — referring to the gap between Italian and German bond yields that is a key risk indicator for Italy. The remarks stirred fears the ECB was retreating from being a lender of last resort to Italy just as concerns intensified about the economic impact of coronavirus, which has infected 24,747 people and killed 1,809.’ FT 3/15/2020 Clearly J. Powell took notice of this, the Fed will be the buyer and the lender of last resort, propping up ALL markets, until they fall on the weight of their own worthlessness. Day trader, professional manager and everyone in between will be horrifically affected for years to come.

It is simplistic logic. Congress wants the Fed to keep employment going at any cost. Congress did not say good jobs or productive jobs just anything that counts as a job in the government statistics. It is an easy conclusion to keep zombie companies afloat with zero bound interest rates because they do add to the list of the employed. This is reductionism at its best. Work toward a statistic not toward productive employment. Is the fault the Fed, or is it really Congress? In like manner the Administration/Congress wants to have the stock market at a all-time high for the election. Is it the Fed in denial printing tons of money that goes directly into the market, or is it really the Administration/Congress’ fault for doing anything to be re-elected? DLS

Re the AUD, an Asian proxy currency, is up 30% in 4-months against the crippled, dying greenback. The difference is the US has been printing even more new currency units than what the sum of its lacklustre, lagging economy actually produces, whilst Asia has had virtually zero QE and certainly no Weimar-style MMT like the US is binging on. So AUDUSD can continue to rip.

The dollar is in total collapse with much more to come. USD is the world's weakest currency and US is the world's weakest economy.

lol... so "key trend-lines" are his pitch.

Fantastic throughout & ended at it's strongest points. Raul imho you give the democratic party way too much credit. There is a reason modern stock markets historically have done well w/them. Did you not grasp that Obama's treatment of Wall St. W/mega-bailouts actually elected Trump to quite an extent?

"The system is never really allowed to cleanse itself" "FED objective is to calm the markets...crush the VIX" This interview was interesting!

Wonderful interview! I really enjoyed it, thank you Sven & Raoul.

I think it is hard for anyone with a macro view to accept that there is one law governing the markets in the last decade or so - Don't fight the FED. The FED is the market.

I’m going to say the one thing no one says. Just spit balling possibilities. Everyone assumes continuity of easy policy toward MMT. They’re expecting the next big market crash to first be delayed, then happen, then get mopped up as usual with easy policy. Here is a scenario fueled by consumption inibition. (That means its after 5). Imagine Biden wins, dies in office, replaced by a much younger person without political debts. Imagine a post epic stock crash like 1999. With that political cover, saying the old policies brought us here, they go like blood and guts George Patton and just let the old rich folks burn. Imagine a new fed chair hired to burn it down (the debt & excesses, old school). Imagine the torch passed to someone that would set rational policy, like there is no free money, and take the pain of adjustment. I’m not saying this will happen, but I find it interesting and odd that 100% of everyone assumes MMT, rather than letting the excesses burn down. They are already monetizing government debt in a non jubilee. But no one thinks they could let private debt just burn. I find that presumptive. Either way Its 1999. Be ready.

I have been a RV subscriber for past year and love the quality people and content that RV provides and produces! The Northman is one of the most interesting guests I have been introduced to! Great discussions and appreciate both the technical and the macro views discussed. Some of the best minds out there admit that there are a myriad of outcomes possible in the short- to mid term and I appreciate the honesty of that!

No charts and Transcript pl ??

It feels like the end game, yeap for 10 years!!! feels ....

Brilliant... Such a lovely exchange of views. Thank you.

Nice chat. Enjoyed it.

In ALL of the conversations regarding the Federal Reserve and the building wealth gap between Americans, it is NEVER mentioned the severe lack of criminal proceedings against criminal Wall street player who then receive trillion dollar bailouts. Example, the CFTC sent 4 YEARS investigating the gold and silver price rigging after Andrew McGuire gave 450 examples of gold and silver price rigging. In 4 years, not a damn thing was found........ And now, a decade later JP Morgan is under investigation (including RICO charges) for gold and silver price rigging that the CFTC didn't seem to find. How is that possible? FOUR TIMES evidence was provided to the SEC, regarding Bernie Madoff's $65 BILLION Ponzi scheme and four times the criminally negligent SEC failed to act! Who was providing banking oversight for Madoff....JP Morgan. No one was arrested after 2008 housing bubble loan stock market crashes.... Arrest the Bankers and arrest the regulators and have them serve the maximum sentences, with no parole. That might fix the wealth gap.......

Highlight was Wifey having a crystal ball on the VIX going 90. Can we back up and find out how?

The constant interventions by Central Banks have produced this ever greater asset bubble / inequality. The actions they are now taking (and may continue to take) are so extreme that - if they are successful - will surely create the conditions for a revolution. That would be a much bigger crisis than all of prior crises put together. Now, I don’t think they will be successful, like all central bank driven bubbles; there is one big promise too many. I don’t know what their next one is. There is nothing positive that isn’t mostly factored into the market already. Negative interest rates may be the trigger of the collapse in fact. I don’t think people are really thinking about the consequences of success. If they succeed it's even worse; the fortunes of those that do/don’t own property/assets become so distant that you tip over the critical mass of people on the streets. Once you say that you will do whatever it takes to save markets: people will demand that you do whatever it take to save them. The only other way out of it is to slowly let down the bubble over a period of years where you have a series of bear market rallies with descending highs. Instead, with unprecedented levels of hubris, they are trying to achieve ascending highs!

Thanks Raoul, Can you please ask Mike Green from Logica Funds back on RV soon to expand on his work and discuss what he is observing in the structure of markets? Mike seems to be right on point at the moment. Thank you.

Excellent interview.

Raoul You really need to keep Northy in the rotation as he is a killer market technician and can keep us up on what to look for technically in these fascinating unpredictable times.. Great video!

It's quite hilarious that VIX broke the 28 support level the day this was released. They spent a lot of time discussing the relationship b/w fed balance sheet and S&P but failed to address the implication of the current balance sheet level. Run a regression of the SPX against the Fed Balance sheet (FARBAST for bbg users) and you'l see over different windows there's an R^2 between .6.-.8. That's better than any analyst I've ever met. The beta coefficient is 5e^-10. Against a 7T balance sheet, it implies that fair value for SPX is 3500. If you combine Mike Green's story of the systematic overvaluation driven by passive w/ (1) the fact that 90% of hedge funds are flat to down this year, (2) many active vehicles are still seeing significant redemptions while the assets in vehicles like VOO continue to climb (3) the intellectual superiority complex of the macro commmunity and their proclivity to shortsell when things "get out of wack" (c'mon guys we've been out of wack since Greenspan, what make you so confident that you think you can determine the relative "out-of-wackness" if you don't know ground truth i.e. the counterfactual that we'd be in absent of interventions). People talk about Robinhood being so euphoric but go look at the number of people holding levered VIX ETF's on Robintrack. Compare that against gross spec short exposure on any equity future of your choosing. There's a reason Tesla's keeps going up. Look at the short interest. Barring people like Marks who have been able to maintain discipline and look where everyone is still to scared to look (lower in CLO capital structure for instance), most of the self proclaimed "intelligent investors" are shorting (explicitly or implicitly if you consider the convexity of cash relative to equities) because they believe the world we are in is not sustainable. I agree. But what makes you so sure we'll blow off into the left tail instead of the right tail? At the end of the day, the unsustainable nature of bubbles is driven by the psychology of those investing in it. They believe it can continue forever. I'm not saying that there aren't people who don't think that. However, if you weight the aggregate investment allocation by assets under management, I contend you would find we are net short in the aggregate. 95 out of 100 people call it a bubble. Just look at money markets. Meanwhile all these people saying Tesla is too high are going to own it in their target date fund after the next S&P 500 re-balance. Stocks don't keep going up because they're ignoring fundamentals. They're going up because y'all keep getting squeezed.

Great interview

Wow, outstanding interview. Mr Henrich packs a huge amount in, with ease. Really appreciated this - thank you, gentlemen.

Reading these comments, I am a bit shocked. Who can not agree on a market that is completely distorted. Jim Rogers always has been early in his calls and these bear thesis will work at sometime this decade and at in a major and sustained way. When exactly, no way to know but this Covid accelerated the real near case.

This Sven dude is another macro junky who tweets about trump all day... 0 business analysis yet again

Great charts as always from the Northman. Great catch-up thank you Raoul & Sven

RP, as always, nails the essential question of this market when he says, “It’s left many of us with a big macro framework based around these secular cycles scratching our head, thinking… ‘Are we wrong? Does none of this matter? Does valuation not matter? Does GDP growth not matter? Do earnings not matter? Does anything matter?’” Be a bull, be a bear, but if that question is not the guiding concern at the core of your trades, you’re not paying attention.

Great conversation. A Transcipt would be great. Thanks

Great interview. Can you guys get the "Queen of Charts" on, would love some of the VIX insights.

Thumbs down to all the critics in the comments section. A question for people more experienced than me in all this stuff that I'm confident no one has 100% certainty - right now the reflation rally has been amazing and convincing enough to turn anyone into a raving bull and buy up anything that glitters weak USD and Fed$ (no need to name them, blind Freddy can find them) - but right now USD TWI, USD/CNH, copper, silver etc all sit at important trendline areas or important levels. To me, a relative newbie, it seems so convincing that of course everyone is piled into these trades that of course they are going to break and as someone commented - technicals don't matter in a Fed run world - and if the only answer is to do more then more will continue to reflate. But will it? We will know soon enough but one thing I know that I have learnt is fake outs happen often in all time frames and technicals can help an awful lot in knowing where to enter and exit a trade and manage your risk/return. Right now it really does feel like more stimulus will keep this whole thing partying on and nothing is forever - so what gives? I'm puzzled by CNH right now which could be faking out on a trendline from 2018 and is obviously important to the furthering of this reflation - but we will know soon enough. In support of any of the people that come on Real Vision and get negative comments, to those that are negative go and get stuffed, why comment, just shut up and be grateful (and yes that was negative :). There's a difference between a negative comment and a different opinion in a discussion and those that are negative - if u r so good finance, then why don't u run ur own fund? So thanks Sven and Raoul and technicals have helped make and save me dough. My opinion is that right now there are opposing thoughts on USD - therefore what's wrong with having a range for a few years and maybe a bumpy one say s and p 2600 to 4300, given all CB's are pumping the printer and deglobalisation is going to cause unpredictable growth rates in different economies. Can AUD rally on commodity prices alone when growth is down and it's own domestic problems pile up? Maybe previously held relationships will start to break down if Covid really was the spark to speed up global change. It's weird that fundamentals don't matter unless you're a cyclical or bank or just not popular or full of debt - fundamentals are selective. Keep printing till they rally too. My 2 cents for now.

Nice to hear from Sven and Raoul. I was bummed to see Mrs. Hendrich leave Twitter as her charts were the bomb! Maybe one day she can make an appearance too? 👏👏👏

Transcript please

I love this guy!

An excellent conversation gents! COVID19 obviously has multiple dimensions, but one on the health front which is still emerging, is the scale that it attacks the whole body. The following provides some insights into what that looks like, but suffice to say, death from acute respiratory distress syndrome is only the tip of the iceberg. For those who survive, multiple complications remain which will challenge everyday existence. https://www.eatthis.com/fauci-post-covid-syndrome/ The short story for those who ignorantly thumb their nose at it for what ever reason they idealogically or conspiratorially conjure, the quality of your thinking is about to be asked the question. From the outside, the blatant and rampant alternative reality thesis in the US is utterly incredulous. Stafe safe America, the World is counting on it!

This is so boring I am turning off. Ciao....

I'd like to see Raoul take on Nassim Taleb, personally. The nervous chuckle at the end was illuminating, especially with a lot of bank analysts saying that the net effect on the markets would be minimal. Honestly, I wonder if Mr. Taleb would come on RV. Its a bit of litmus test to see if he thinks this service is worthy of his time.

Excellent discussion and insights. Thank you!

A question(s) that has been bugging me for awhile: Q1. Does the Fed stimulate primarily to keep equities prices high? If yes, is this primarily to keep confidence high or does it have to do more with the ease at which companies can keep their debts rolling over? Q2. What would be the matter with stocks still lower by 30% as in March and chugging along sideways with a slight bullish bias? Why does it seem like the Fed absolutely needs equities prices to always be at ath's? My amateur answers are: Q1. Yes the Fed thinks it needs equities always high. Trump seems to concur. It has to do 50/50 with confidence and the debt of companies. Q2. The Fed thinks the USA would lose the confidence of capital markets if markets were allowed to stray downwards and stay downwards for too long. Therefore capital flight remains enemy #1 for the Fed. This also has something to do with USD as world reserve currency status. All the best to everyone.

Nice conversation and it was interesting to see them starting to question their own market theories. The way I see it, the entire structure of the political and financial system is one big self-reinforcing reflexivity loop, that can only be disrupted for very small periods since the governments around the world have no choice but to step in and keep the system going because the entire system demands it. Raul has a point about the 4th turning, but can true change really happen without complete destruction of the old system? Will technology be able to bring about a sharing economy for all of the future generations. How would that work in a system that relies on growth to survive?

How's the view from the edge of the cliff?

It is ironic that the Fed and Congress by keeping the economy afloat during a major pandemic may be the correct thing to do. During all the financial downturns it was the wrong thing to do at least in magnitude. I guess my point is the Fed/Congress should be a minor fly wheel in financial crises and a real balance in a pandemic. Lobbyists pay Congress to keep bailing out Wall Street. With the new election contribution laws elected representatives are just as active as lobbyists as legislators. (I use the Fed/Congress to emphasize the point that it is Congress who should be acting as they have the power of the purse. Congress does not want to go on record for many of the Wall Street handouts, so Congress has its very own whipping boy - the Fed.) DLS

Great interview. Love the dog making a cameo in the backyard.

I thought this was an excellent discussion. Actionable, if only in the reinforcement of themes, structural issues and key indicators (like Vix) to be looking at. Sven may have a negative overall outlook but, given central bank actions, who doesn't? As he said, "challenging time for anyone".

Probably the best discussion I have watched on RV. Fabulous!

"The problem with artificially suppressed volatility is not just that the system tends to become extremely fragile; it is that, at the same time, it exhibits no visible risks. Volatility is information. In fact, these systems tend to be too calm and exhibit minimal variability as silent risks accumulate beneath the surface. Although the stated intention of political leaders and economic policy makers is to stabilize the system by inhibiting fluctuations, the result tends to be the opposite. These artificially constrained systems become prone to Black Swans. Such environments eventually experience massive blowups" - Nassim Taleb from the book Antifragile.

THIS IS ZIMBABWE/WEIMAR REPUBLIC WORLD WHERE THE STOCK MARKET WILL NEVER CORRECT AS IT'S THE ONLY METHOD TO KEEP UP WITH THE DEBASEMENT OF OUR ECONOMY AND THE PLUNGING DOLLAR. FUNDAMENTALS/TECHNICALS NO LONGER MATTER.

Captions, please.

Great discussion. Current topics were addressed objectively in a convivial manner. Mr. Henrich used the words joy and happiness in discussing his businesses, life and outlook - rare. It might be interesting to invite Mrs. Holloway Henrich for an interview on RVTV to discuss her approach to the VIX. I will enjoy watching this interview again in the afternoon. Thanks. DLS

Great interview..good mix of some macro and technicals...calling VIX to 90! Blimey, that has to be the forecast of the last decade!

Real Vision rocks!! What a finale... !!

I know Sven gets painted as a perma-bear, but I thought he brought some good, subtle evidence to support his view, and further, he was un-dogmatic about pushing it. Great conversation.

Very good interview here. I look forward to Sven now in future. A great slow and detailed explanation of the current macro. A dip into the technicals for a bit of the old current events. And a wider ranging philosophical discussion of the Fed, the economy and politics.

Wait a second, Sven is bearish?! Who could've possibly guessed that. Needless to say, interview taken with grain of salt.

Very good interview. Thanks for Sven and Raoul.

Some weird negativity in the comments section. I really enjoyed the interview. Was hoping for more technical analysis since much of what we're used to here on RV is fundamental, but always a treat to hear what Sven is looking at, some recommendations on what to watch for in the future and so on. Thanks Raoul and thanks Sven for coming on!

The only useful thing of this conversation - is what Raoul says: Observational bear to actionable bear. Clearly Sven Henrich is actionable bear continuously. Very biased opinion, not really what one wants to hear. Raoul is much more logical.

transcript?

Good description of where we are. Our predicament is not unique. Richard Vague's book A Brief History of Doom: Two Hundred Years of Financial Crises reveals in painful and convincing detail that what we are experiencing today is not unique. It has played out many times over the past 200 years. It always leads to collapse and depression that last 3-5 years.

Wasted hour.

What a rambling mess

An interesting discussion, but not very actionable.

Agree, the laughing at the end had me laughing out load as well!

Yeah, ok. Technicals? Really? It's all about liquidity and CBs have no other choice but to provide it. Also, double top is about the costliest "technical pattern" that ever existed. Sad stuff.

@15.30 the the GDP/market cap chart isn't it a lot less public traded companies now than before? or is this market cap of the top 500 companies / GDP?

The laugh at the end said it all. The next few months are going to be wild.

Excellent discussion

Thanks Raoul and Sven. Thought you'd be interested to see this model I created tracking new US COVID cases vs deaths. Until July 14, when White House took control of data from the CDC, deaths appear to have reached a "permanently low plateau". See: https://www.screencast.com/t/gLVU5fvrm I'm sure it's just a coincidence!