Discussion with Raoul Pal

Featuring Raoul Pal, Ken Monahan

Raoul Pal sits across from Ken Monahan, Founder & Principal of Vizier Ltd., for an in-depth discussion where Raoul explains his probabilistic framework to assess the risk of recession, discuss the structural issues and inefficiencies in the capital allocation system, explore the systemic illiquidity in current markets, and more.

Published on
8 January, 2016
Topic
Investment Framework, US Dollar, Macro
Duration
63 minutes
Asset class
Bonds/Rates/Credit, Equities, Currencies
Rating
11

Comments

  • @j

    @Muljp j.

    13 5 2016 23:11

    1       0

    Great meeting of the minds. Being mentally positioned for the grand opening of pandoras box is the best investment for the next 20 yrs.

  • SF

    Sean F.

    9 4 2016 22:44

    0       2

    Great interview! Markowitz (2005) showed without unlimited shorting assumption, CAPM does not hold (market portfolio is not efficient) -> different portfolios for “capitalist” and “labor” retirement

  • ph

    phil h.

    21 2 2016 10:55

    0       0

    Such exciting times with extremes beyond our wildest expectations 10 years ago. We are lucky to be living this.

  • MG

    Moritz G.

    7 2 2016 22:17

    2       0

    I dont see how money flows out of private equity as these are closed end funds. 08 and 09 did not see any Defaults by LPs - so I dont understand what these guys are saying here.

  • SD

    Salvatore D.

    3 2 2016 11:17

    1       0

    Eye opening interview, it really helps measure key upcoming risks. Does anyone still believe we are in a bull cycle?

  • RM

    Robert M.

    31 1 2016 03:42

    0       0

    Everything is relative

  • AC

    Andrew C.

    28 1 2016 07:04

    1       2

    I'm a nobody, but not convinced about a recession coming. I subscribe to the view displayed at http://scottgrannis.blogspot.com/2016/01/more-reasons-to-avoid-despair.html . Things are really pretty ok

  • JG

    James G.

    23 1 2016 14:19

    1       0

    Saw a utube with Grant Williams stating thar Ral was going to "go totally into gold" what was that about ?

  • MM

    Michael M.

    21 1 2016 19:52

    1       0

    Raoul, fantastic.

  • JH

    John-Erik H.

    18 1 2016 21:20

    5       0

    Raoul coined a new technical term for the financial markets: "Total Shitshow"
    LMAO.

  • mf

    mark f.

    17 1 2016 13:29

    0       1

    Outstanding dialectic:great insights. My question: CBs don't often let inputs move linear,so are risks high for Plaza II/Opec cuts? Like goldview, but GFC outflows saw gold -30%..different this time?

  • MM

    Mark M.

    17 1 2016 09:08

    0       0

    As always great.

  • CN

    Charles N.

    16 1 2016 23:40

    0       0

    Extremely helpful.

  • IK

    Ibrahim K.

    15 1 2016 10:17

    0       0

    Very interesting global macro view. Thank you for your analysis!

  • KM

    Ken M.

    15 1 2016 04:49

    1       0

    The point I was making was that China, which has historically pegged it's currency to the dollar is seeking to liberalize it so that it can have more control over it's own monetary policy.

  • KM

    Ken M.

    15 1 2016 04:48

    0       0

    Quite so, now countries that have dollar pegs are importing contractionary US monetary policy which is why countries like China are seeking to move toward a more market determined rate.

  • BL

    Brock L.

    14 1 2016 23:58

    0       0

    Now with the USD strengthening; countries pegged to the USD are having to disgorge from their monetary base and having the opposite affect. Ref. MI2Partners presentation last summer

  • BL

    Brock L.

    14 1 2016 23:56

    0       0

    Ken, I see your point regarding interest rates; however the monetary base expansion went into the economy and was a big contributor to growth as was the case in other countries pegged to the USD.

  • KM

    Ken M.

    14 1 2016 20:17

    0       0

    Jurgen, none taken.

  • KM

    Ken M.

    14 1 2016 20:16

    0       0

    Brock, the US exported inflation to China pushing it from -2 to +6% in the first 18 months of QE, forcing them to raise rates 125 bps in 2011, which I'm sure they would have preferred not to do.

  • jS

    jurgen S.

    14 1 2016 10:46

    2       0

    No disrespect to Ken but I'd love to see the same discussion take place with Kyle Bass in his seat.

  • NO

    Nicholas O.

    14 1 2016 00:35

    1       0

    Great debate - thank you. Learning lots as a beginner. Raoul are you buying gold and silver or only gold?

  • mp

    mark p.

    13 1 2016 20:56

    5       0

    great format. more of these two-way robust debates please. the friction is where the best insight comes. thanks.

  • BL

    Brock L.

    13 1 2016 19:12

    0       0

    Is it not true with a weakening DXY that a pegged CNY has to expand the supply

  • JH

    Joseph H.

    13 1 2016 18:31

    0       0

    Easy to quickly pick a winner in this debate. Far better to deliberate upon the differences. Certitude frightens me.

  • BL

    Brock L.

    13 1 2016 16:21

    0       0

    It seemed like Monahan did not understand the effects of a weakening USD on CNY policy. He said that the Chinese added stimulus and had to contract monetary policy when the USD was being weakened

  • MB

    Matthias B.

    13 1 2016 13:25

    3       0

    close to the all time best of RVTV so far. so dense in content at d great format to have own view being challenged by very competent sparring partner. ends great week after Willem i'view. tks a lot!

  • RP

    Robert P.

    13 1 2016 13:24

    0       2

    It seems that Monahan has imbibed a bit too much of the Yellen Kool-Aid

  • LB

    Lisa B.

    13 1 2016 02:59

    1       0

    Nice ideas in this one..

  • JM

    Jon M.

    12 1 2016 19:22

    2       0

    Thank you both! Loved the back and forth. Concerned that gold still too easy to manipulate by the CBs. They cannot have the boy who cried wolf turn into the boy who cried :The Emperor has no Clothes!"

  • GR

    Guido R.

    12 1 2016 13:48

    0       0

    Business dynamism is negative so we don't seem to be creating that many new businesses... ?
    .
    http://www.brookings.edu/~/media/research/files/papers/2014/05/declining%20business%20dynamism%20l

  • TM

    The-First-James M.

    12 1 2016 09:54

    0       0

    Intended for Basil re. Gold and Silver. Just my opinion. Gold was strong through most of 2008 and saw hot money inflows as a result. Right now, it's still pretty much hated and the hot money is short.

  • BH

    Ben H.

    12 1 2016 08:23

    2       0

    RP has done it again! Great to have you back, putting yourself in one of the more evenly matched debates on RVTV... that said I do believe the large white throne put you at a distinct advantage!

  • BP

    Basil P.

    12 1 2016 05:11

    1       0

    Just like in 2008 won't the washout event take gold/sliver prices down as well ?. Which canadian gold/silver mines are a good buys now ?

  • TL

    T L.

    12 1 2016 03:48

    5       0

    Hi Raoul, another great piece of yours - highly appreciated! Could you please recommend how to educate oneself one the business cycle framework of thinking and behaviourial economics?Maybe a book tip?

  • M

    Michael .

    11 1 2016 23:22

    1       0

    Brilliant and insightful discourse.

  • JO

    John O.

    11 1 2016 21:36

    1       0

    Great discussion!

  • JP

    Jeronimo P.

    11 1 2016 17:58

    10       0

    An excellent discussion. I like the friendly debate format - it reveals thought processes. Glad this is working again.

  • S

    Sigurður .

    11 1 2016 00:53

    1       0

    SWF - Getting squeezed out of liquid positions... One of the big takeaways from this debate.

  • JL

    Jordan L.

    10 1 2016 22:11

    1       0

    Mandated interest rates, and thus an artificial time-preference has a place in this conversation. This entire theme breaks down to central bank policy and the subsequent mal-investment.

  • DD

    Daniel D.

    10 1 2016 22:08

    3       1

    Labor and unions were/are just as greedy as the average bloke in trying to fund their DB pensions (the dumbest invention ever). When unrealistic assumptions aren't met, it's someone else's fault.

  • DD

    Daniel D.

    10 1 2016 22:01

    3       0

    Great discussion, oil markets being down creates huge global liquidity issues not just isolated pain-spot on. Owning direct interests in businesses not through the 2 & 20 crowd creates lasting wealth

  • PB

    Paul B.

    10 1 2016 21:51

    0       0

    The navigation buttons are not working. This makes it tough to replay clips to make sure you hear it correctly. Ideas in piece are great!

  • KS

    Kathleen S.

    10 1 2016 21:25

    1       0

    i love discussion on pensions, Michael Hudson spoke about this, pension funds have been a windfall for Wall Street. People stopped saving money and put it into stocks and bond which drove up prices.

  • HW

    Harold W.

    10 1 2016 21:17

    0       0

    ISM for manufacturing--I assume you use this but has not the index slipped below 50 other than in 1986 and 1998 that did not lead directly to recession?

  • CT

    Craig T.

    10 1 2016 20:51

    1       0

    WOW! My head is buzzing. More good info in one sitting then I have read/watched all year. The give and take was very effective in unearthing gems of wisdom.

  • tW

    tgwtom W.

    10 1 2016 20:32

    1       0

    What's to add but thank you..

  • MR

    Michael R.

    10 1 2016 19:37

    0       0

    Smart. Oil liquidity collapse in progress: since Dec14th filming, WTI -2.7% (35.8/33.2); S&P -4.0% (2055/1922); Gold Feb'16 +3.0% (1065 to 1098); EEM ETF -9.6% (32.65/29.51). How about a Q2 revisit?

  • TS

    Thomas S.

    10 1 2016 18:50

    1       0

    complexity and greatly increases fat tail risk. We have never been here before in the history of the world. So who knows...

  • TS

    Thomas S.

    10 1 2016 18:48

    0       0

    URSKA's points on Songhurst are worth considering especially compounding. However, he partially made RP point that timing is critical. No discussion how world debt and 20x that is derivatives adds

  • LT

    Luc T.

    10 1 2016 18:10

    3       0

    Ken's comment on European banks balance sheets being bigger than the goverment's ability to rescue : This is exactly the reason why the Europe wide law of bank bail in has come into effect from 1/1/16

  • KE

    Kenan E.

    10 1 2016 18:10

    1       0

    I just learned sooo much. Big fat THANK YOU!!!!!

  • EL

    Edward L.

    10 1 2016 16:20

    1       0

    Brilliant discussion. Such facile dispassionate education is rare. I especially appreciate Raul's consistency over the past 12 months.

  • FS

    Fred S.

    10 1 2016 16:08

    1       0

    ... these trades on in the last week in Dec. Still time to get positioned, just not quite as good. Loved this presentation and echo earlier commenter: your turn, Grant. :)

  • FS

    Fred S.

    10 1 2016 16:07

    0       0

    It's too bad that the actionable ideas given by Raoul in this presentation were held until after the first of the year. Mkts have moved significantly in the first week. I would have loved to put ...

  • DB

    Doug B.

    10 1 2016 15:18

    5       1

    Great piece! Although, I would have preferred it if Ken would have let Raoul finish his point rahter than constantly interrupting. I found that annoying and very distracting.

  • TT

    Turing T.

    10 1 2016 15:14

    1       0

    Some great thoughts Raoul. My favourite is your observations on millenials understanding difference between financial products and own capital in your own business. Leads to optimism for next gen.

  • WE

    William E.

    10 1 2016 14:05

    3       0

    To Gerald's comment: I have 25 yrs as an institutional invest. consultant (nat'l firm) with 30 p. research depart. and I also am knocked over by the quality of thought & insight of the players!!

  • us

    urska s.

    10 1 2016 13:56

    1       3

    Ken came into the interview with a different view, what is it? Raoul your insights are pretty common. You are too bleak... - see Songhurst interview no.1 bigger pic is missing and you have been fooled

  • AA

    Ali A.

    10 1 2016 09:36

    1       6

    The guys talks too much, Raoul's points are more interesting and articulate

  • LK

    Lisa K.

    10 1 2016 08:04

    1       0

    Groundbreaking iinsights! Raoul and Ken highlight ongoing and future problems/disasters in this global economy. In 2016, will want to hedge finacial system with gold and Bitcoin!

  • LC

    Liliana C.

    10 1 2016 06:41

    9       0

    Not only is Raoul brilliant, he's also genuinely humble and gracious at the same time. Seek the truth &you shall find it. Took Thank you Raoul, Grant and RVTV.

  • DF

    Dominic F.

    10 1 2016 06:35

    2       0

    Fabulous discussion lads. Covered so much ground and tested Raoul's ideas. Great to see flexibility and hedging ideas as well :-)

  • AE

    Alex E.

    10 1 2016 05:59

    3       0

    As always, massive investing knowledge crammed into 1 Hr. Raoul's fee is 15K/hr. We just got 100K of info for the price of RVTV's subscription! Thank you, guys. Still want to meet Raoul in person...

  • GS

    Gretchen S.

    10 1 2016 05:44

    5       0

    In addition to being extremely intellectually stimulating It is a very actionable discussion for retail portfolios like me. Thanks

  • GM

    Gerald M.

    9 1 2016 23:36

    16       0

    I am just an individual investor but I feel like I'm connected to an advisory way beyond my net worth. Wow. REALLY.GREAT.STUFF

  • AH

    Andreas H.

    9 1 2016 22:18

    1       0

    So well, since I am not a big shorter I will stay in Cash (Dollar) and in some Bitcoin...

  • A1

    Animal 1.

    9 1 2016 21:19

    1       0

    Ok at this stage I am convinced that QE4 is inevitable. When it does come, will it be enough to support cyclical asset prices and cause an upturn in the business cycle? Will gold perform?

  • RS

    Robert S.

    9 1 2016 21:08

    1       0

    How do i get a link to this for 10 of my friends who might subscribe?

  • cs

    chandra s.

    9 1 2016 20:45

    3       0

    RAOUL- During the talk about oil price and EURODOLLAR Debt which may constitute a collapse, now what happens if OPEC cuts supply and oil goes back to 60 by Mar or Jun? does that move avoid recession?

  • cs

    chandra s.

    9 1 2016 20:41

    4       0

    Good discussion ken being devil advocate and played role of central bankers shoes most of the time. Raoul explained everything comfortably thrown at him.

  • EL

    Elizabeth L.

    9 1 2016 19:56

    7       0

    Raoul, thanks for explaining things in common language avoiding wall street jargon. You teach me how to think and how to look from a dynamic conceptual framework. Thank you.

  • AT

    Alex T.

    9 1 2016 19:32

    0       0

    Could you add a chapter on the list about RP going to flip burgers? Need to revisit that time and time again in the future for entertainment

  • WM

    William M.

    9 1 2016 18:38

    3       0

    Bravo - best video yet! Ken really brought out the best from Raoul - great interview/debate format! Canadian gold mines - great hedge. For those without spare millions NGD works too.

  • CM

    Charlie M.

    9 1 2016 16:46

    0       0

    Raoul - would you be interested in taking on a "seasoned" intern?

  • AK

    Adam K.

    9 1 2016 16:19

    5       0

    Raoul flipping burgers!! I'm still giggling about this one...great stuff as usual.

  • SS

    Sam S.

    9 1 2016 16:11

    4       0

    R Pal master class performance, a focus on the future & now what suggestions vs Ken's facts based rearview historical opinions. All due respect the battle was wonderful. Can we have some more please?

  • RA

    Ricardo A.

    9 1 2016 16:06

    9       0

    I wonder how could I ever live without RV. Keep going, brilliant content. Debates are always more informative than monologues, specially when one side plays the devils advocate. Best wishes 2016

  • SB

    Stewart B.

    9 1 2016 14:18

    12       0

    Fabulous. I enjoyed the more 'devil's advocate' approach for a change. Thanks you.

  • nc

    neil c.

    9 1 2016 13:25

    3       0

    Willem and Raoul, with a splash of Rainmaker----best week of RV yet

  • GR

    Guido R.

    9 1 2016 10:37

    5       0

    migrates towards the entity that manages the monetary system.

  • GR

    Guido R.

    9 1 2016 10:36

    4       0

    monopolized. As legislation and fiscality raise barriers to entry, you not only stifle business dynamism but you also divest individuals of their savings hence their property hence profit necessarily

  • GR

    Guido R.

    9 1 2016 10:35

    4       0

    Once an entity successfully imposes a monetary system AND opts to run perpetual deficits, fiscality and legislation will become gradually more restrictive. Ergo, industry and business are inherently

  • GR

    Guido R.

    9 1 2016 10:34

    3       0

    run perpetual deficits, the arithmetic of this choice inherently undermines private property. Two of the pillars of the capitalist system are self determination and the ability to own property.

  • GR

    Guido R.

    9 1 2016 10:31

    4       0

    What is missing from the assumptions is the fact that the monetary system and its management, are imposed and fall outside of the democratic process. Once politicians make the deliberate decision to..

  • BA

    Bryce A.

    9 1 2016 08:48

    5       0

    I enjoyed the commentary on how Labor became Capital via the pension system.

  • JS

    John S.

    9 1 2016 06:38

    26       0

    Ken did a good job. He was deliberately pushing back and challenging Raoul. That is the point of debate and made the whole discussion more interesting.

  • RD

    Richard D.

    9 1 2016 06:17

    8       11

    Ken seriously need to tone down the "academia BS", i.e., propensity to jargon on! We aren't writing a thesis here Ken.

  • HM

    Harald M.

    9 1 2016 05:25

    7       0

    Masterful articulation of interconnectedness across asset classes, across national markets cohverging into a single global marketplace

  • JA

    John A.

    9 1 2016 05:24

    18       0

    I wish there was a Raoul Pal University. A tour de force of thinking. What a pleasure to listen to. Well done Ken, that was fantastic back and forth.

  • CW

    Chad W.

    9 1 2016 05:17

    23       0

    I agree, one of the best yet. As much as I enjoy all the great and varied content from Real Vision, don't forget, we still love to hear from the founders. Grant, you're up....2016 predictions?

  • MR

    MIGUEL R.

    9 1 2016 05:12

    24       0

    Raoul, please consider doing a regular segment, perhaps a newsletter format about your views re the market once a month. I think that would be really compelling

  • dn

    david n.

    9 1 2016 04:47

    8       0

    Best RV interview of all time!!!

  • CW

    Christine W.

    9 1 2016 04:37

    0       9

    Raoul, you are so right about the devastatong, broad based affects of low oil prices! I found Ken's point of view sadly lacking and typical of most wall street analysts. Thank you for realvisiontv.

  • TS

    Thomas S.

    9 1 2016 04:05

    8       0

    Great format! Always better to look for falsification of theory instead of falling prey to the confirmation bias. What do you think of GBTC as a way to play Bitcoin?

  • rp

    ross p.

    9 1 2016 02:34

    14       0

    My brain on steroids after this interview. Officially addicted to RV. Best content around!

  • FC

    Fractal C.

    9 1 2016 02:22

    5       0

    BTW, I first "liked" the interview and then started watching it!

  • RA

    Robert A.

    9 1 2016 02:14

    12       0

    So you CAN have a high level brainstorming"debate" style exchange without becoming 'personal', shouting, and 'talking over'. Who Knew? It's been a great year for RV! Oh, and did I mention the value.

  • FC

    Fractal C.

    9 1 2016 02:12

    5       0

    Someone had a question on buying and storing bitcoins. Please visit xapo.co

  • KB

    Kevin B.

    9 1 2016 01:55

    5       0

    Love the insight. Glad I signed up for the site.

  • RD

    Ryan D.

    9 1 2016 01:17

    9       0

    Damn ! Raoul taking us to school! Amazing pension/capital thesis. Boomer deleveraging and the millennial demographic shift is going to create a whole lotta chop in the next decade.

  • DM

    Dom M.

    9 1 2016 00:23

    6       0

    What I have learned from RV so far is to think outside the box(2nd derivative),do not follow the herd and most important of all to conduct yourself with integrity and humility.Thanks!

  • PM

    Peter M.

    8 1 2016 23:34

    3       0

    Wonderful and informative- thanks!

  • RP

    Raoul P.

    8 1 2016 22:29

    105       0

    Thanks all! I really appreciate the great feedback and also how many of you like the interview style too. You guys are the BEST.

  • JO

    John O.

    8 1 2016 22:02

    9       0

    Excellent, Raoul is a go to guy!

  • LA

    Linda A.

    8 1 2016 21:52

    8       0

    I got schooled by Raoul.
    Man are u smart! Great
    thinking my friend.

  • DM

    Daniel M.

    8 1 2016 21:46

    2       0

    2- ..eventually- loss to oil will be gains elsewhere but thats what recessions, bear mkts are-pain in cred, jobs, defaults, equity as allocations of cap/lab move in world very levered to old st quo

  • G

    Gulled .

    8 1 2016 21:45

    10       0

    Thank you, Raoul and Ken!

  • CT

    Claudia T.

    8 1 2016 21:38

    16       0

    Great New Format. Definitely one of the best interviews on RV so far. I am so happy about my RV subscription.

  • DM

    Daniel M.

    8 1 2016 21:37

    2       0

    Great stuff. I think keying on oil plunge dollar shortage ($5T) and debate about whether it simply moves to consumers is key and RAoul aptly gives examples of knock on effects. i would add that...

  • H

    Harry .

    8 1 2016 21:35

    1       0

    Can anyone give guidance on obtaining and holding bitcoin? It would be great to get some curated info from the community. Thanks in advance

  • PS

    Patrick S.

    8 1 2016 20:44

    3       0

    Thanks for one of the best and most informative talks of the laser year. I will use it well in my investing hypothesis in 2016. Well done!

  • PN

    Paul N.

    8 1 2016 20:36

    2       0

    Great stuff. Thanks.

  • JW

    Josh W.

    8 1 2016 20:21

    3       0

    Brilliant work. Fascinating and very helpful.

  • DG

    Dana G.

    8 1 2016 19:00

    5       0

    I love the new format, a discussion as opposed to a lecture

  • VP

    Victor P.

    8 1 2016 18:58

    4       0

    Great interview Paul! Don't you think that some of the dificulty to understand what's going on is due to mixing terms money, credit & currency? How do you "save" under financial repression?

  • CH

    Calvin H.

    8 1 2016 18:52

    2       0

    @38:45 BOOM ! Let the people manage their own money - chuck out the shysters.

  • KD

    Kevin D.

    8 1 2016 18:46

    5       0

    Great stuff! Loved the discussion about whether the Euro can replace the USD as Carry Trade funding currency, I've been mulling that one over for a while.

  • TJ

    Terry J.

    8 1 2016 18:40

    8       0

    Awesome discussion from two top market intellectuals. RV has pushed the envelope again this week with so many invaluable thought provoking views including Willem Middlekoop and The Rainmaker.

  • KM

    Ken M.

    8 1 2016 18:04

    2       0

    That depends on what domestic consumption is doing, if it's falling at the same rate as imports then no.

  • Jv

    Joris v.

    8 1 2016 18:02

    8       0

    Raoul in the pimp chair. As he should be.

  • RM

    Robert M.

    8 1 2016 17:59

    8       0

    If exports and imports are dropping wouldn't that mean that we are producing more of what we consume?

  • TH

    Timo H.

    8 1 2016 17:41

    7       0

    Raoul, don't be shy. In the absence of good alternatives, everyone is a gold bug.

  • FS

    Felix S.

    8 1 2016 17:26

    8       0

    Just can't get enough of Raoul. Love the style of the interview! Gold quality interview right here. ;)

  • MC

    Mike C.

    8 1 2016 17:09

    5       0

    Certainly some logical cause and effects correlations made, although what I found most interesting was, Raoul's interpretation of how these correlations = how & which opportunites. Unique perspective!

  • FA

    Frazer A.

    8 1 2016 17:08

    4       0

    This is awesome, truly insightful and outside the box thinking.

  • CD

    Charles D.

    8 1 2016 17:03

    12       0

    Wow...outside of the box...and when u connect the dots to other RV interviews...it keeps you so far ahead of the herd...I intend to be a lifetime subscriber...the only way I know to stay solvent.

  • LS

    Lorenz S.

    8 1 2016 17:01

    7       0

    Absolutely stunning!

  • MB

    Mike B.

    8 1 2016 16:49

    24       0

    This is now the best interview RV has done since its launch. Keeps getting better... I feel like I just received a Ph.D in common sense.

  • BL

    Bruce L.

    8 1 2016 16:48

    7       0

    Tremendous discussion, point after point

  • MS

    Mark S.

    8 1 2016 16:30

    9       0

    Great discussion! So much in there. Thank you

  • DB

    David B.

    8 1 2016 15:52

    31       0

    Terrific stuff, guys! The breadth and depth is unmatched...certainly compared to traditional media interviews!