Discussion with Raoul Pal

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

Discussion with Raoul Pal

The Interview ·
Featuring Raoul Pal, Ken Monahan

Published on: January 8th, 2016 • Duration: 63 minutes • Asset Class: Equities, Currencies, Bonds/Rates/Credit • Topic: Macro, US Dollar, Investment Framework

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.

Comments

  • @j
    @Muljp j.
    13 May 2016 @ 23:11
    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 April 2016 @ 22:44
    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 February 2016 @ 10:55
    Such exciting times with extremes beyond our wildest expectations 10 years ago. We are lucky to be living this.
  • MG
    Moritz G.
    7 February 2016 @ 22:17
    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 February 2016 @ 11:17
    Eye opening interview, it really helps measure key upcoming risks. Does anyone still believe we are in a bull cycle?
  • RM
    Robert M.
    31 January 2016 @ 03:42
    Everything is relative
  • AC
    Andrew C.
    28 January 2016 @ 07:04
    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 January 2016 @ 14:19
    Saw a utube with Grant Williams stating thar Ral was going to "go totally into gold" what was that about ?
  • MM
    Michael M.
    21 January 2016 @ 19:52
    Raoul, fantastic.
  • JH
    John-Erik H.
    18 January 2016 @ 21:20
    Raoul coined a new technical term for the financial markets: "Total Shitshow" LMAO.
  • MF
    M F.
    17 January 2016 @ 13:29
    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 January 2016 @ 09:08
    As always great.
  • CN
    Charles N.
    16 January 2016 @ 23:40
    Extremely helpful.
  • IK
    Ibrahim K.
    15 January 2016 @ 10:17
    Very interesting global macro view. Thank you for your analysis!
  • KM
    Ken M.
    15 January 2016 @ 04:49
    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 January 2016 @ 04:48
    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 January 2016 @ 23:58
    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 January 2016 @ 23:56
    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 January 2016 @ 20:17
    Jurgen, none taken.
  • KM
    Ken M.
    14 January 2016 @ 20:16
    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 January 2016 @ 10:46
    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 January 2016 @ 00:35
    Great debate - thank you. Learning lots as a beginner. Raoul are you buying gold and silver or only gold?
  • mp
    mark p.
    13 January 2016 @ 20:56
    great format. more of these two-way robust debates please. the friction is where the best insight comes. thanks.
  • BL
    Brock L.
    13 January 2016 @ 19:12
    Is it not true with a weakening DXY that a pegged CNY has to expand the supply
  • JH
    Joseph H.
    13 January 2016 @ 18:31
    Easy to quickly pick a winner in this debate. Far better to deliberate upon the differences. Certitude frightens me.
  • BL
    Brock L.
    13 January 2016 @ 16:21
    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 January 2016 @ 13:25
    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 January 2016 @ 13:24
    It seems that Monahan has imbibed a bit too much of the Yellen Kool-Aid
  • LB
    Lisa B.
    13 January 2016 @ 02:59
    Nice ideas in this one..
  • JM
    Jon M.
    12 January 2016 @ 19:22
    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 January 2016 @ 13:48
    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 January 2016 @ 09:54
    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 January 2016 @ 08:23
    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 January 2016 @ 05:11
    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 January 2016 @ 03:48
    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 January 2016 @ 23:22
    Brilliant and insightful discourse.
  • JO
    John O.
    11 January 2016 @ 21:36
    Great discussion!
  • JP
    Jeronimo P.
    11 January 2016 @ 17:58
    An excellent discussion. I like the friendly debate format - it reveals thought processes. Glad this is working again.
  • S
    Sigurður .
    11 January 2016 @ 00:53
    SWF - Getting squeezed out of liquid positions... One of the big takeaways from this debate.
  • JL
    Jordan L.
    10 January 2016 @ 22:11
    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 January 2016 @ 22:08
    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 January 2016 @ 22:01
    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 January 2016 @ 21:51
    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 January 2016 @ 21:25
    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 January 2016 @ 21:17
    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 January 2016 @ 20:51
    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 January 2016 @ 20:32
    What's to add but thank you..
  • MR
    Michael R.
    10 January 2016 @ 19:37
    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 January 2016 @ 18:50
    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 January 2016 @ 18:48
    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 January 2016 @ 18:10
    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 January 2016 @ 18:10
    I just learned sooo much. Big fat THANK YOU!!!!!
  • EL
    Edward L.
    10 January 2016 @ 16:20
    Brilliant discussion. Such facile dispassionate education is rare. I especially appreciate Raul's consistency over the past 12 months.
  • FS
    Fred S.
    10 January 2016 @ 16:08
    ... 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 January 2016 @ 16:07
    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 January 2016 @ 15:18
    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 January 2016 @ 15:14
    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 January 2016 @ 14:05
    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 January 2016 @ 13:56
    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 January 2016 @ 09:36
    The guys talks too much, Raoul's points are more interesting and articulate
  • LK
    Lisa K.
    10 January 2016 @ 08:04
    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 January 2016 @ 06:41
    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 January 2016 @ 06:35
    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 January 2016 @ 05:59
    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 January 2016 @ 05:44
    In addition to being extremely intellectually stimulating It is a very actionable discussion for retail portfolios like me. Thanks
  • GM
    Gerald M.
    9 January 2016 @ 23:36
    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 January 2016 @ 22:18
    So well, since I am not a big shorter I will stay in Cash (Dollar) and in some Bitcoin...
  • A1
    Animal 1.
    9 January 2016 @ 21:19
    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 January 2016 @ 21:08
    How do i get a link to this for 10 of my friends who might subscribe?
  • cs
    chandra s.
    9 January 2016 @ 20:45
    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 January 2016 @ 20:41
    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 January 2016 @ 19:56
    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 January 2016 @ 19:32
    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 January 2016 @ 18:38
    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 January 2016 @ 16:46
    Raoul - would you be interested in taking on a "seasoned" intern?
  • AK
    Adam K.
    9 January 2016 @ 16:19
    Raoul flipping burgers!! I'm still giggling about this one...great stuff as usual.
  • SS
    Sam S.
    9 January 2016 @ 16:11
    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 January 2016 @ 16:06
    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 January 2016 @ 14:18
    Fabulous. I enjoyed the more 'devil's advocate' approach for a change. Thanks you.
  • nc
    neil c.
    9 January 2016 @ 13:25
    Willem and Raoul, with a splash of Rainmaker----best week of RV yet
  • GR
    Guido R.
    9 January 2016 @ 10:37
    migrates towards the entity that manages the monetary system.
  • GR
    Guido R.
    9 January 2016 @ 10:36
    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 January 2016 @ 10:35
    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 January 2016 @ 10:34
    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 January 2016 @ 10:31
    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 January 2016 @ 08:48
    I enjoyed the commentary on how Labor became Capital via the pension system.
  • JS
    John S.
    9 January 2016 @ 06:38
    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 January 2016 @ 06:17
    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. | Contributor
    9 January 2016 @ 05:25
    Masterful articulation of interconnectedness across asset classes, across national markets cohverging into a single global marketplace
  • JA
    John A.
    9 January 2016 @ 05:24
    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 January 2016 @ 05:17
    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 January 2016 @ 05:12
    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 January 2016 @ 04:47
    Best RV interview of all time!!!
  • CW
    Christine W.
    9 January 2016 @ 04:37
    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 January 2016 @ 04:05
    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 January 2016 @ 02:34
    My brain on steroids after this interview. Officially addicted to RV. Best content around!
  • FC
    Fractal C.
    9 January 2016 @ 02:22
    BTW, I first "liked" the interview and then started watching it!
  • RA
    Robert A.
    9 January 2016 @ 02:14
    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 January 2016 @ 02:12
    Someone had a question on buying and storing bitcoins. Please visit xapo.co
  • KB
    Kevin B.
    9 January 2016 @ 01:55
    Love the insight. Glad I signed up for the site.
  • RD
    Ryan D.
    9 January 2016 @ 01:17
    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 January 2016 @ 00:23
    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 January 2016 @ 23:34
    Wonderful and informative- thanks!
  • RP
    Raoul P. | Founder
    8 January 2016 @ 22:29
    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 January 2016 @ 22:02
    Excellent, Raoul is a go to guy!
  • LA
    Linda A.
    8 January 2016 @ 21:52
    I got schooled by Raoul. Man are u smart! Great thinking my friend.
  • DM
    Daniel M.
    8 January 2016 @ 21:46
    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 January 2016 @ 21:45
    Thank you, Raoul and Ken!
  • CT
    Claudia T.
    8 January 2016 @ 21:38
    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 January 2016 @ 21:37
    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 January 2016 @ 21:35
    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 January 2016 @ 20:44
    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 January 2016 @ 20:36
    Great stuff. Thanks.
  • JW
    Josh W.
    8 January 2016 @ 20:21
    Brilliant work. Fascinating and very helpful.
  • DG
    Dana G.
    8 January 2016 @ 19:00
    I love the new format, a discussion as opposed to a lecture
  • VP
    Victor P.
    8 January 2016 @ 18:58
    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 January 2016 @ 18:52
    @38:45 BOOM ! Let the people manage their own money - chuck out the shysters.
  • KD
    Kevin D.
    8 January 2016 @ 18:46
    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 January 2016 @ 18:40
    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 January 2016 @ 18:04
    That depends on what domestic consumption is doing, if it's falling at the same rate as imports then no.
  • Jv
    Joris v.
    8 January 2016 @ 18:02
    Raoul in the pimp chair. As he should be.
  • RM
    Robert M.
    8 January 2016 @ 17:59
    If exports and imports are dropping wouldn't that mean that we are producing more of what we consume?
  • TH
    Timo H.
    8 January 2016 @ 17:41
    Raoul, don't be shy. In the absence of good alternatives, everyone is a gold bug.
  • FS
    Felix S.
    8 January 2016 @ 17:26
    Just can't get enough of Raoul. Love the style of the interview! Gold quality interview right here. ;)
  • MC
    Mike C.
    8 January 2016 @ 17:09
    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 January 2016 @ 17:08
    This is awesome, truly insightful and outside the box thinking.
  • CD
    Charles D.
    8 January 2016 @ 17:03
    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 January 2016 @ 17:01
    Absolutely stunning!
  • MB
    Mike B.
    8 January 2016 @ 16:49
    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 January 2016 @ 16:48
    Tremendous discussion, point after point
  • MS
    Mark S.
    8 January 2016 @ 16:30
    Great discussion! So much in there. Thank you
  • DB
    David B.
    8 January 2016 @ 15:52
    Terrific stuff, guys! The breadth and depth is unmatched...certainly compared to traditional media interviews!

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