The Next Big Opportunity

Published on
April 3rd, 2019
Duration
17 minutes

The Next Big Opportunity

The Expert View ·
Featuring Raoul Pal

Published on: April 3rd, 2019 • Duration: 17 minutes

Raoul Pal’s long bond position has been paying off, but it’s not done yet. As global economic conditions continue to deteriorate and the Fed completes its policy U-turn, yields should fall further. The next phase of the framework will see stunning opportunities emerge in the FX markets, where sensible alternatives to the dollar remain scarce. Filmed April 1st, 2019 in Grand Cayman.

Comments

Transcript

  • DD
    Damian D.
    9 May 2019 @ 14:07
    I hate the direction you have taken Real Vision, I cannot say that all the content is garbage, but I can say that most of it is, unless you are promoting picking up nickels in front of a steam roller, especially in this market.....
  • DD
    Damian D.
    9 May 2019 @ 14:01
    I subscribed to Macro Insider when it was first published and Raul was long bonds, long USD since then which is about 3 to 4 years now.... Even a broken clock is right twice a day...
  • AH
    Ahmed H.
    16 April 2019 @ 07:57
    RESPECT.. big call - as u said, against consensus as u said - hope ur right! any thots on EM bonds?
  • DW
    Denny W.
    15 April 2019 @ 18:12
    Raoul, much respect for your willingness to share your knowledge and contacts built over many years with the average Joe. I’ve been a longtime subscriber to RV and am definitely an average Joe, but wondering how you come down on the opinions of Dwight Anderson, interviewed on RV in 2016 (lack of investment leading to oil issues arising on 2018/19), Clark of Horsemen Capital (20017, 2018 RV interviews) who has been spot on with his analysis of US shale vulnerabilities, with Diego Padilla’s call for lower for much longer energy price. If I start with a chart, it appears that WTI poised to break out of cup and handle. However, I’ve also learned from RV and Mr. Brigden that USD a major factor. Can you please shed some light?
  • VS
    Vasil S.
    8 April 2019 @ 10:11
    TLT since Nov 18 is up 10% - it's good but not that good. Would that be considered an 'extraordinary rally'? What would the U10 3.25 to 2.25 yield have paid? Cheers
  • CH
    Colin H.
    7 April 2019 @ 22:36
    I'm on the other side of AUDUSD. Oh well...
    • MP
      Matthew P.
      9 April 2019 @ 16:25
      On what basis? Curious
  • SA
    Stephen A.
    6 April 2019 @ 09:31
    I have to say that Raoul has been long bonds for a while and I think the FED hiking rates from 0% to 2.5% was something he didn't predict in 16, 17 and majority of 18. He has fought the FED rate hikes the whole way. The rally in bonds we just saw has happened every time the FED has pivoted from rate hikes to a pause in the past. The only question was when the FED pivot would come. At 3% or 2.5%. The sudden pivot at 2.5% was clearly politically motivated because there is no US economic data at present to support it. Not sure that pivot is something that could have been predicted with economic indicators. How do you predict President of the US publicly dictating FED monetary policy? That has never happened before in the history of this country. Finally, Raoul attributes the weakness in the world economy to the FED "over-tightening" which I find somewhat bizarre. Europe is at zero rates (negative in many countries), Japan is at zero. The dollar is strong. The Euro is weak. From a macro perspective, Europe can hardly get a better economic backdrop. Europe should not be going into a recession. Would Europe like the DXY to be a 85, US rates at zero and oil at $120 as a recipe to get out of recession? So the recession in Europe, Japan and China is not a function of financial conditions. It is a function of geopolitics - the US government/Pentagon trying to realign global supply chains to reduce the geopolitical adventurism of China (which came as a result of placing the global supply chains there). Again not something you can predict with economic indicators. I have been in the same trade with Raoul. I was in 1-3 year bonds in 2018 and I am still there. Raoul has been right on the long bond trade where I have been scared to go because of late cycle inflation concerns. Oil is up 30% this year. Energy is 30% of the CPI. If CL stays at 60, we will have 3% to 3.5% CPI by the winter (Core CPI will stay around 2% all year because of wage gains). If CL goes to 80 (conceivable if Saudi Arabia/Russia cut more production), we could have 4% CPI in the winter. I am not a bond trader but being long duration at 2.4% TNX with CPI at 3.5% seems risky to me.
  • FO
    Frederic O.
    5 April 2019 @ 15:00
    Any view on gold this year?
  • RP
    Ryan P.
    5 April 2019 @ 11:39
    I love to bond call. Love it. I have been massively long EDV , IEF, SHY since February. To your point , I don’t see it changing anytime soon if anything I would add to the long end on pullbacks. The $ call is tough because you have far more competing factors that come into play here. Oil , Rates and gold are just s few. Can you have oil and $ both rally ? Can you have gold rally as real yields fall globally in tandem with the $ ? Can rates falling so significantly clear the way for the $ to break out and hold? IDK. I buy your thesis I just don’t know if the market wants it to go there with things I’ve listed above. If I were to play the $ , UUP calls would most likely be my first look. That in a combo with FXE , FXY (yen?) puts to hedge or grab extra juice in case A) your thesis is right B) the dollar trades flat but relative to top weights in the DXY it outperforms. Not sure my structure is the best and given I don’t trade futures due to having to pay for a wedding ( can’t risk a margin call going into this thing my fiancé would kill me) I have to be creative to get leverage and manage risk. Would love someone that is going to put this trade on express their structure or disagreement with mine, to comment. Thanks
    • RP
      Ryan P.
      5 April 2019 @ 11:39
      *the bond call. Haha
  • DC
    Dan C.
    4 April 2019 @ 20:56
    Great video and analysis Raoul and I like that you are sharing this information in line with your ethos for starting RealVision (given that you are probably telling your GMI customers this same info). I'm not sure there can be a USD shortage though because of the way money is issued. Demand is met with instant supply via the US Treasury. Are you talking about USD or the Eurodollar market? I agree (as an long time MMT advocate) that rates lowering will be bullish for the dollar. Rate hikes are price increases (inflationary) and rate cuts are price decreases(deflationary). Your analysis is in-line with that of Hedgeye (they see US in Quad 3 for all of 2019 - stagflation, so buy energy utilities and REITs in the equity space, and Long duration Trys, Munis and Tips in the fixed income space. Most of my portfolio has been in $TLT since Oct 18!
  • SS
    Shaeffer S.
    4 April 2019 @ 20:19
    Thanks for sharing your thoughts in a concise & complete manner. Whether or not people choose to agree is up to them but this is a great piece for evaluation. These sort of pieces are the heartbeat of Real Vision, in my opinion.
  • SN
    Sean N.
    4 April 2019 @ 17:16
    Great concise expression of your thesis. I agree in part. Bonds should rally again, they will have to if the FED wants to continue to rescue the market and economy. A near term rapid dollar rally is something all central banks will work to avoid, so in my opinion is a low probability outlier event if things get out of control. Thanks for making your case!
  • MC
    Mathieu C.
    4 April 2019 @ 16:35
    I like to think trade war plays a big role in your trade, but not in the conventional talk it's discussed everywhere so far. Chinese holdings of US treasury have decreased sharply, their return as a major buyer has to be surely a key element of this talk due to the infamous increase of deficits. I think US corporate are screaming they want their cash back for buybacks, mergers and all others sort of corporate business, they might feel very well in a trap, the more they sell the more suffer and they can't be a suitable replacements. But what could the Chinese ask in exchange? And by the way on that spectrum one could say they have in fact started this war as they reduces sharply in 2016. Chinese know very well what they are doing I presume. They are intelligent people. They might import more goods but this is going to do nothing to it. I don't see much other thing than requesting a weaker dollar that could be in play here. Please anybody share your thoughts; the hold back surely cannot just be IP. They already have all major technologies, they need semiconductors but it has been de facto excluded from the deal. In my opinion a weaker dollar might help their capital outflow, domestic confidence, their satellites economies and their broader long term goals. It can't be too hard for the US to give away on this with regards to the current inflation risks. I think that might also explain why Powell was so keen on to reducing his balance sheets in autopilot as quick as possible to reduce the inflation expectation coming from this unconventional policy and have more margin in case they would need to run a weak dollar policy. I mean surely Powell is someone intelligent too and knows what he's doing, he showed he was capable to drive markets just with talks which was not seen for a very long time. I think people all over looked what just happened and tag this into "they always make policy mistakes and run behind the curve". I think they are so much subtile details to it and in that sense a weaker dollar seems the consensus. If anybody can help me to understand something; How do they implement a weak dollar voluntary policy. In the textbook it says print money but I fail to understand exactly how this works. I would shortcut and think they will print money and buy gold with it.
    • MC
      Mathieu C.
      4 April 2019 @ 16:46
      They seemed to be a strong correlation between USD/CNY and Chinese treasury holdings. I don't see US, selling their freshly printed dollars and buyings loads and loads of yuan though.
  • bn
    boutros n.
    4 April 2019 @ 16:01
    Raoul - may you expand a little on why buy some TLT vs say Jan 20 Eurodollar futures. What are the considerations for one vs another to express a bearish rates view.? Also any view on UK gilts vs US...UK at 1% seems crazy... walking in london you can see the amount of retail shops closing down its staggering have never seen this in 15 years,... you would think BoE is eventually going to get to neg rates...and you have a black swan catalyst on brexit which doesnt seem fully priced in at the moment?
  • JR
    Jon R.
    4 April 2019 @ 15:26
    Well presented as always, though hard to feature how, given his recession forecast, Raoul isn't more bearish on US equities, especially given the recent rip off Dec lows.
  • JH
    Jesse H.
    4 April 2019 @ 15:18
    Great stuff, Raoul! Clear, concise and well-researched as always. I think short term (next 6 months or so) you are right -- buy bonds and dollars. I would even add, buy US equities, depending on one's risk tolerance (though I don't personally want to assume the level of risk associated with the instability of this market). I think finding ways to buy Vol is a much wiser move frankly than getting into the US stock market - e.g. via Straddle options on the S&P.
    • JH
      Jesse H.
      4 April 2019 @ 15:26
      I do respectfully think that there are interesting arguments to be made on the bear side of (bonds, dollar) as well. Would be interesting to also lay out the opposing case in your presentations and discuss where and how you see it going wrong.
    • JH
      Jesse H.
      4 April 2019 @ 15:30
      Also, forgot to mention - would be great to get Julian Brigden back on to talk about his view of where things are now / where they are headed. This would be a nice complement to Raoul's views for those of us who are presently unable to subscribe to Macro Insiders. Cheers.
  • AA
    Ali A.
    4 April 2019 @ 15:06
    USD/JPY usually does even better than USD in risk off... Japanese-repatriation trades are predictable. Long yen.
  • cp
    claude-vincent p.
    4 April 2019 @ 14:49
    Nothing new as usual. Raoul is taking a massive lap dance on his call long treasuries. Many were also bull treasuries at 3.10+ and as for the US$ Raoul has been a bull for a long time and this is one of the most crowded places. Raoul like many others when they get a call right once in a while like to think that nobody saw it coming so that they look good. of course that’s being very dishonest but hey this is the life of money managers nowadays. Raoul was massively wrong in his short oil call btw and was also wrong when us$ went from +$100 to $88...
    • JH
      Jesse H.
      4 April 2019 @ 15:23
      Claude-Vincent -- Anyone can be wrong about any call, as I'm sure you realise. The key thing is to look at the way someone thinks and what their process is. Raoul has proven both solidly time and time again. I see your points, but the comments about character here are both inaccurate and unhelpful. Stick to the facts please, and be more professional. Thanks.
    • JL
      J L.
      4 April 2019 @ 15:36
      without any real reference to levels and when to put on a big position it is easy to make any call look good, there is no lack of truth in the original comment unfortunately
    • HO
      H2 O.
      4 April 2019 @ 15:44
      HY has crushed treasuries recently. That has been a better trade if you look at the flows in the context of Fed easing.
    • VD
      Viknesh D.
      4 April 2019 @ 23:30
      Hmmm. I think Claude Vincent has a point. There is one fact. The language used by Raoul as opposed to Julian is way more persuasive and definite . Julian appears more tempered. In a macro insiders piece around January this year , Raoul wrote that he had to put on his ‘big boy pants’ and short the equites making strong recommendations to short the averages. This was when the S&P was like 2400s. In the above interview, he says he is ‘not yet bearish on equities’. Mind you he did mention in the macro insiders piece that he would update in 3 months if his view changes which he didn’t. Someone should ask Raoul how much he lost. I think the point is a lot of his writing appeals from a marketing g for subscription revenues basis and I hope to see more tempering of the wording like the way Julian lays out his views. Lastly, Raoul says that he is ‘indifferent about whether a recession occurs’ but recall late last year he called a recession in persuasive terms by end of Q1.
    • DS
      David S.
      5 April 2019 @ 18:03
      Why do we want everyone to be the same! Let Raoul be Raoul and Julian be Julian. Their energy comes from different places. Look at the idea and make up your own mind. DLS
  • MF
    Marc F.
    4 April 2019 @ 13:19
    brilliant Raoul as always ! Thanks a lot
  • HO
    H2 O.
    4 April 2019 @ 12:32
    Contrary to the presentation, these are actually pretty consensus views. Less self promotion please.
    • bn
      boutros n.
      4 April 2019 @ 15:07
      look at CFTC non commerical - 10y treasuries still short even though less than before
  • VD
    Viknesh D.
    4 April 2019 @ 12:28
    I see it differently. My concern is the steepening not the inversion. I’m definitely not long 10 year bonds anymore.
  • SP
    Sat P.
    4 April 2019 @ 10:20
    Thanks Raoul. After watching a lot of videos on RV saying that buying USD would be good, I started to do so last year as so many highly respected people on this channel seemed to have that view. Love RV for information that you simply don’t get on the MSM Fake News.
  • KK
    Kevin K.
    4 April 2019 @ 09:32
    What’s the best way to play this from a retail investor perspective? I bought various duration US treasury ETFs but the payoff has been minimal, few basis points.
    • JM
      Jim M.
      4 April 2019 @ 13:17
      EDV and ZROZ are ETF's that provide exposure to long-dated zero coupon bonds.
  • OD
    Orin D.
    4 April 2019 @ 08:02
    Raoul- I agree long bonds is great trade BUT I'm not sure who you follow on Twitter because my Twitter is swamped with people who have bearish charts on economy and thus bullish treasuries. Top down charts do a survey on Twitter of sentiment and people bullish bonds for fundamental reasons is high
  • rs
    richard s.
    4 April 2019 @ 07:36
    ㅡㄷ
  • rs
    richard s.
    4 April 2019 @ 07:36
  • HS
    Hendrik S.
    4 April 2019 @ 07:28
    Maybe you have to be in europe or Japan to truly USD and usbonds are attractive. Are attractive
  • tc
    t c.
    4 April 2019 @ 06:28
    Really cleared the air for me and reaffirmed my beliefs. Brilliant. Thank you again.
  • ly
    lena y.
    4 April 2019 @ 01:37
    Raoul you delivered such clear message with your own argument and charts! Thank you for speaking in layman terms to benefit every walk of life. What you and Real Vision are doing is levelling the playing field for the general public! You're a charmer...like your style too! LOL What will happen to oil with the rise of US$?
    • BM
      Beth M.
      5 April 2019 @ 21:48
      Hear, hear!
  • JQ
    Joseph Q.
    4 April 2019 @ 01:32
    This is why I pay for Realvision. Facts with a great thesis!! Great Video!! Take a look at Gold daily looks like H&S. Gold might be a buy once fed ends tapering in sept. (Short term bearish long term bullish gold)
  • AA
    ALBERTO A.
    4 April 2019 @ 01:16
    So glad I found RV...between Raoul and Grant and all the amazing collaborators my financial acumen has increase dramatically. I'm a options seller and waiting for the moment to volatility to increase but in the meantime these trades on the side are full of value. Thanks!
  • RS
    Robert S.
    4 April 2019 @ 00:53
    Currently the U.S taxpayer has a debt of 180800$ on average just for being an American. That doesn’t include liabilities. Now as yourself, If you met a guy like this would you give him more money? The moment that interest rates reflect credit risk things could get a bit shaky.
  • RD
    Rahul D.
    4 April 2019 @ 00:16
    Excellent as ever.
  • RM
    Ryan M.
    3 April 2019 @ 23:29
    I know you are busy in Cayman and all, but sure wish you'd find a little more time to do some more interviews :) Really been hitting the nail on the head the last few months with your calls. Also, what do you think about all the wage growth we are seeing and the relative strength in services? Do you think that eventually manufacturing weakness spills into services? Or can services keep aggregate afloat while manufacturing troughs?
    • RP
      Raoul P. | Founder
      3 April 2019 @ 23:41
      The latter was 2016... Im not sure if that plays out again. It looks weak across the board but services will always be more stabile as they are less cyclical by nature.
  • CJ
    Craig J.
    3 April 2019 @ 22:01
    It would be really great to see a special or mini-series showing how macro guys execute some of their ideas. I.e. how you structure your work space, what kind of software you use, assets traded, timing, position management... maybe I'm asking for a bit too much here, but "pulling back the curtain" is sort of in the Real Vision manifesto ;)
    • RP
      Raoul P. | Founder
      3 April 2019 @ 23:41
      Yes, this is an idea we are looking at. We are going to produce some videos on this and cover it at Live events...
    • RM
      Richard M.
      4 April 2019 @ 13:09
      Raoul this is a great idea - but please don't restrict it to only Live Events as not all of us can make it to those events (but we all love our RVTV - so convenient )! Many thanks for a great video.
  • GG
    Gary G.
    3 April 2019 @ 21:58
    I am not sure how he saying that everyone is bearish USD. Speculators are net long DXY from cot report. Positioning is one sided and there is very nice stop run opportunity. Everyone is bearish euro and audusd but they have gone nowhere with dxy strength. Euro is in falling wedge and we know how those patterns resolve. To me, dxy is in topping formation and reversal to downside is in cards. Sentiment is negative on euro and audusd which will bring a nice rally from here. Even though i respect Raoul’s work and agreed with his bond position earlier, i totally disagree here on dxy. Dxy will rally but it’s early as of now. Need dovish dxy sentiment before next leg starts. Lets see how this plays out. Ecb should trigger it!!!
  • AF
    Aidan F.
    3 April 2019 @ 20:48
    Would love to see some chat about whether broker houses will survive in Europe or is it lights out no exceptions
  • TJ
    Tay J.
    3 April 2019 @ 20:28
    Good call last summer! Raoul--Do you have any way of quantifying/illustrating the prevailing sentiment towards bonds and the dollar? CFTC net futures positions, have, as we might expect, flipped radically since last year's bond and dollar lows. It's hard to believe that other investors have remained bearish on both.
  • SS
    Steve S.
    3 April 2019 @ 20:15
    Raoul says where will the money go? I'll tell you. It will go into US Equities.
    • SS
      Steve S.
      3 April 2019 @ 20:22
      If Dollar goes higher. EM will crash and burn. European & Asian Fund managers will have to reallocate massive amounts to US equities in order to get positive returns. Massive outflows from their economies and massive inflows into the US Stock market.
  • SS
    Steve S.
    3 April 2019 @ 20:14
    S&P 500 will hit 3000, Nasdaq 8000 IMO before any major downside.
  • VS
    Victor S. | Contributor
    3 April 2019 @ 20:06
    Raoul straight forward comments so very good as it was clear and to the point. We agree on bonds and great trade. The dollar is where i have a huge problem. Where will money go ??to gold silver and platinum. A shortage of dollars? Not in this economy of grand US deficits, they will be printed for the masses. Trump will outlaw an appreciating dollar as he does with oil. If we keep getting weakness you will get a 50 bps cut in FF and the dollar is 92 . But your call over 98 is a very low risk way of doing what you wish. Stick with bonds is my 2 cents. Thank you .
    • RP
      Raoul P. | Founder
      3 April 2019 @ 21:55
      Thanks Vic. Let's see how it plays out. If the dollar falls, money will go to gold and silver, for sure.
  • WG
    Wade G.
    3 April 2019 @ 19:50
    That was just great Raoul, thank you.
  • AA
    Ali A.
    3 April 2019 @ 19:38
    I find every conversation, in which Raoul is a party, very interesting and I agree with a lot of his views and analysis but I don't think he is right this time on his view on bonds, if their rally isn't already over, it soon will be. I agree however with his view on the USD and I also think the USD stock Indices are heading to new highs and the Dow will travel beyond 27000 before it crashes .
  • us
    ujjwal s.
    3 April 2019 @ 19:27
    Please share more information on cycles: commodities, credit, demographic cycles and that accumulates to make a bigger cycle.
  • HS
    Henry S.
    3 April 2019 @ 19:05
    Great analysis delivered in an easily digestible way. Glad I bought a subscription to RV. Keep up the solid work. It's appreciated.
  • TE
    Tito E.
    3 April 2019 @ 18:45
    ISM also rolled over
    • TE
      Tito E.
      3 April 2019 @ 18:55
      Still look at ISM Raoul? Im surprised you didnt mention it ..or are there inputs (or omissions) these days which make it a less accurate barometer?
    • RP
      Raoul P. | Founder
      3 April 2019 @ 21:56
      Yes, the ISM is too correlated to the oil patch for it to be as useful and it now doesn't track asset prices as well as either the hard data (I have my own index) or the ECRI, which I have shifted to.
  • JS
    Jürgen S.
    3 April 2019 @ 18:06
    Great analysis. I‘m convinced it will play out as described.
    • RP
      Raoul P. | Founder
      3 April 2019 @ 21:57
      Thats more conviction than Ive got yet... !
  • NI
    Nate I.
    3 April 2019 @ 18:03
    Thanks Raoul. I made great money on the long bond & eurodollar futures trade. Fabulous call with everyone on the other side of the boat making the returns absolutely spectacular. Major kudos. What scares the crap out of me is the deteriorating US financial condition. The US Treasury finally got their annual report out today (here if anyone wants to read it: https://bit.ly/2THSWbl). Even Mnuchin states in the report executive summary that, "the projections in this Financial Report show that current policy is not sustainable". Couple that with Democrats and RINOs competing to outdo each other with the most outlandish proposal for more borrowing and spending. When, if ever, does this start to matter? Will investors continue to pile into US debt and dollars even when the money-balling commences in 2021 or 2022?
    • MS
      Michael S.
      4 April 2019 @ 01:35
      I have been wondering this too. Also, what if there is more MMT talk during Dem primaries or election results and the bond market gets scared?
  • EM
    Elean M.
    3 April 2019 @ 17:37
    I have a general question. Raul says he was bullish bonds and diamonds and that now he's bullish bonds and dollars. However, when you're bullish on bonds, aren't you by default bullish on dollars as well? Bonds are essentially just future payments of dollars.
    • RA
      Robert A.
      3 April 2019 @ 17:48
      Elena, a quick clarification if you will allow me—Raoul is using an old 1980’s expression “Buy Bonds and wear Diamonds” which means you can make so much $ on your Bonds that you will have money to dress in diamonds. I think Raoul is agnostic on buying/selling diamonds.
  • RE
    Richard E. | Contributor
    3 April 2019 @ 17:21
    In fairness, TLT is up about 4% since last August. However, it went down over 6% from August through November. So would a money manager have been able to stay long?
    • LS
      Lincoln S.
      4 April 2019 @ 00:24
      Yeah, the long bond trade from last august was nothing special. Shorting bonds was the most crowded trade at the time and no offense, but bonds haven't really moved much on the long end. The 30 year went from 3.40 to 2.90 is not a "huge" move. Unless you we're extremely levered long bond futures in your portfolio, it was a big "profitable" trade.
  • MF
    Michael F.
    3 April 2019 @ 17:18
    Dumb question - what does Raoul mean by the Libor 2Yo2Y% change? Libor today versus 2 years ago or 2 year average today versus 2 year average from a year ago? Anyone?
    • MG
      Michael G.
      3 April 2019 @ 19:17
      Raoul is referring to the 2y USD Libor rate 2yr forward. Its a fwd rate on a yield curve. Once he has the point he does a y/y calc on it to see % change over 12 months...
    • MS
      Michael S.
      4 April 2019 @ 17:31
      2x2 sounds like a good guess but that's not is. It's close to a 2 yr change in 2yr Libor but also not a complete match. I want to know what this is as well.
  • JS
    J S.
    3 April 2019 @ 17:06
    Thanks for sharing your view. How do you follow the liquidity of USD abroad?
  • PC
    Philip C.
    3 April 2019 @ 16:55
    Looking back at your Global Macro is Back video, you've been right about bonds and USD, but you also predicted a fall in oil price, which hasn't really happened. Are you still bearish on oil?
  • Sv
    Sid v.
    3 April 2019 @ 16:50
    On the mark as usual. Clear, crisp, great charts, great story. Worth the price of admission.
  • gg
    georgy g.
    3 April 2019 @ 16:31
    Macro is good, risks good. But what’s “value” in this context is missing. Not a trade, but value. Best value was in Chinese inets. Not a lot of ppl trade rates pa. And my view these macro indicators will turn positives in 2h if we get USA-China resolution. People are under appreciating what trump is doing for the country. And how different USA work culture and corporates are. Still good upside in stocks is my view
  • WW
    William W.
    3 April 2019 @ 16:28
    Well thought out. Brilliant!
  • M
    Mike .
    3 April 2019 @ 15:58
    Excellent as ever, thx Raoul.
  • MC
    Mathieu C.
    3 April 2019 @ 15:23
    Isn't simply a manufacturing world recession at the moment and services still holds well. Equities are being pushed by techno, if they holds services might be holding on to it too. This bearish view seems to be a strong call indeed ^^. If dollars and bonds rallies together that might be a weird one as it will accentuate the world into the recession. I'd have loved to hear opinions on gold. The vol is incredibly cheap at the moment. Long hedged calls is such a cheap trade at the moment, it looks bearish with loads of sellers but a short squeeze might be about to take place. That will contain the bullishness on the dollar perhaps.
    • DS
      David S.
      3 April 2019 @ 19:30
      Raoul will be even more correct on the direction of the dollar and bonds if the US misses a recession because of the service sectors. DLS
  • IO
    Igor O.
    3 April 2019 @ 15:13
    Is ED Dec19 98 call going to work out? Or it's a stretch?
    • RP
      Raoul P. | Founder
      3 April 2019 @ 16:25
      A decent chance of working...more that the delta (implied chance of the option being in the money)
  • TT
    Trenton T.
    3 April 2019 @ 14:55
    2nd order effects of fed tightening last year just now feeding through to real economy as seen in trade numbers cited. Makes sense EMs will immediately ease if fed eases, hurting EM currency v USD. I feel sorry for US endowment funds that piled into EMs last year because they were "cheap". Also nice to hear someone talking about LIBOR since US economy has shifted further away from public company commercial paper and prime rate+ based financing and more toward private equity deals built on insurance co/non-bank debt, which is generally LIBOR+, and less often hedged.
  • DD
    Daljit D.
    3 April 2019 @ 14:03
    @Raoul, at this juncture, it would be have been great to hear about the upside risks to your Macro outlook. FYI I have similar views.
  • SH
    Stephen H.
    3 April 2019 @ 13:33
    Timely, a very well laid out thesis and set of pragmatic inputs and observations to challenge the broader narrative. A real treat, food for thought and then implementation, in one form or another.
  • SW
    Scott W.
    3 April 2019 @ 13:32
    Fantastic Raoul. You and Lacy Hunt have opened my mind in the bond market. Please continue your great work and updates for us. Cheers!
  • JM
    Jim M.
    3 April 2019 @ 13:19
    I always feel much smarter after hearing from Raoul. And yes, we all want more of him. What's important for me is sifting through (as best I can) all the content on RV to get to the real meaningful stuff. The tone on RV is, of course predominantly bearish and buying into too much of this can be injurious to your portfolio and/or career. Raoul has certainly nailed this bond call (and others) but he is no exception to this. One of the best examples of this is "the Trump family, Pence, etc. will be arrested, jailed, etc." I appreciate how Raoul shares with us notable Twitter folks that he follows but to be taken in by the likes of John Schindler - ugh! No need to traffic in the silly lies of The Left no matter what your politics are. Am will always be an enthusiastic supporter of RV - just trying to discern what's important and what's not around here.
  • MS
    Mark S.
    3 April 2019 @ 13:12
    No mention of oil?
  • MM
    Mike M.
    3 April 2019 @ 12:32
    Very good, much appreciated. What trades similar to ADXY if you do not hve Bloomberg? Thank you.
    • RP
      Raoul P. | Founder
      3 April 2019 @ 12:46
      Aussie is not a bad proxy
  • TB
    Thibault B.
    3 April 2019 @ 11:59
    Raoul: The mind boggles at the net COT bond positions for leveraged funds across the entire curve, especially in the 2Y. Whats going on here? I thought risk parity were long for example! Otherwise a fantastic and very timely update, thank you!
  • CM
    Christopher M.
    3 April 2019 @ 11:46
    @ Raoul I have been riding the "boring bond" train since Nov '18 with both your and K Mccullogh call at Hedgeye. It has been really interesting that even Luke Gromen has gone short term bullish on the dollar. Do you have any thoughts on currency as part of US/China trade negotiation? Most people see it as a concession by Chinese not to devalue CNY. What if the deal is to devalue USD and for China not to follow. Same outcome but the other side of the coin. USD lower saves the world?
  • TJ
    Terry J.
    3 April 2019 @ 11:42
    First class analysis, concise and accompanied by persuasive charts as always. Thank you Raoul for sharing your views and I love the phrase, Buy Bonds, wear Diamonds! I have steadfastly believed you and Lacy Hunt when it came to Treasuries despite the consensus for years suggesting otherwise. Still digesting your dollar bullishness, but I can easily see how you may well be proved right with this too. Thanks again for this, and for RV's unique and unrivalled market opinions from so many world class investors and analysts!
    • RP
      Raoul P. | Founder
      3 April 2019 @ 11:43
      Thanks Terry. Thats super kind of you.
  • MP
    Matthew P.
    3 April 2019 @ 11:33
    Raoul has the best interviews, super smart, has an opinion, game changer...MORE RAOUL!
    • RP
      Raoul P. | Founder
      3 April 2019 @ 11:43
      Please, no...Personally, I've had enough of him! ;-)
  • WM
    William M.
    3 April 2019 @ 10:41
    I hope you are right.
  • RI
    R I.
    3 April 2019 @ 10:26
    Even a broken clock is right twice a day.
    • RI
      R I.
      3 April 2019 @ 10:31
      http://images.businessday.com.au/file/2012/06/06/3353844/endgame.pdf?rand=1338958298964
    • WM
      William M.
      3 April 2019 @ 10:48
      lol...
    • TR
      Travis R.
      3 April 2019 @ 19:15
      To be fair. Nobody forecasted unprecedented, uninterrupted CB intervention. And even fewer saw it being carried out without the usual unintended consequences. Interesting times.
    • DS
      David S.
      3 April 2019 @ 19:35
      Being right twice a day for a nanosecond may not be tradable. DLS
    • DP
      DIMITRIS P.
      3 April 2019 @ 20:05
      still his suggestion was buy USD back then in 2012.. when DXY was below 80...so even though there was a lot of doomsday talk, u would have money following this advice
  • SG
    Sashi G.
    3 April 2019 @ 10:12
    In full screen mode, using google chrome, the countdown timer remains visible on screen regardless of where I leave the mouse pointer. Not a problem when out of full screen mode.
    • SG
      Sashi G.
      3 April 2019 @ 10:13
      As well as the tool bar on the bottom of the screen for volume control, HD, etc. Same issue.
    • M.
      Milton .. | Founder
      3 April 2019 @ 11:35
      Just sent you a message, let’s solve this one.
    • KC
      Kenneth C.
      3 April 2019 @ 17:28
      I've got the same issue. I use Mozilla/Firefox. Milton, we need (sound like my kids there) a reply update. You might have responded to me on another video where I posted this.
    • TR
      Travis R.
      3 April 2019 @ 19:15
      To be fair. Nobody forecasted unprecedented, uninterrupted CB intervention. And even fewer saw it being carried out without the usual unintended consequences. Interesting times.
    • DS
      David S.
      3 April 2019 @ 19:37
      I move cursor off the picture to the darker frame to solve the problem. DLS
  • ZH
    Zack H.
    3 April 2019 @ 10:09
    Love the bond call and agree. But, differ on USD, with $22T in US debt and Trump as Dovish as you can get to keep stimulating to fund the deficits he will do everything in his power to push down the $USD. Isn’t the FED basically bankrupt as Jim Grant as opined on, and by 2022 as Luke Gorman has pointed out US tax receipts will be less than interest servicing on the debt plus military spending (this doesn’t include off balance sheet US obligations for entitlements etc.). How does the $USD rally above .98 under that scenario? I’m long GOLD and bonds.
    • AM
      Andrew M.
      3 April 2019 @ 10:24
      You want to hold Euro, Yen, and Yuan for the next few years, then? Good luck!
    • RP
      Raoul P. | Founder
      3 April 2019 @ 11:44
      I like gold, but not against the USD but against most other currencies...
    • CM
      Carlos M.
      3 April 2019 @ 13:14
      all these are true, but what you need to ask yourself is where will big money go to? moneyflows are driving the US -USD, bonds, stocks ( or u really think SPX is pushing higher on china trade talks?) -higher everything else is irrelevant unless there is a paradigm shift on USDs place in the world.
    • DD
      Daljit D.
      3 April 2019 @ 13:58
      What about also considering the Fed doing an indefinite reserve drain at a clip of almost $50bn per month, and at least $30bn p/m until late this year?
    • LJ
      Lucas J.
      3 April 2019 @ 13:59
      Won't the rise in the dollar just make the situation the global economy worse requiring more world wide stimulus? I get the cleanest dirty shirt idea to a point but why does there have to be a cleanest dirty shirt, at what point do you just get a new wardrobe and run to gold? Seems like there is a real chance that the whole world becomes Argentina.
    • TR
      Travis R.
      3 April 2019 @ 19:17
      Lucas. Well said.
    • MB
      Michael B.
      3 April 2019 @ 20:15
      I hear this deficit argument frequently, but isn't the USD much more than the debt of the US Government? Also, aren't we forgetting that the entire world is awash in debt, both on and off the books? I think we must remember that currencies are always a relative trade. The USD still stands out as a winner RELATIVE to the other majors. If we recalibrate our thinking to focus simply on supply and demand, the picture changes and Raoul's logic becomes more clear. The world NEEDS USD for commerce and will continue to for some time. BUT... the world has LESS of our dollars floating around, partially because we're no longer buying as much OIL internationally so less petrodollars. The Eurodollar system, the primary mechanism for supplying the world with USD via interbank loans, has been somewhat crippled since around 2011. Massive amounts of loans, many maturing 2019-2021, were issued all over the world denominated in USD, many of which were in EM. Paying back or even just servicing those loans requires USD starting about now. Loans repaid or defaulted on by definition reduce supply of USD. Econ 101. None of these forces of demand are attenuated by the federal deficit. As ridiculous as it sounds, at least for the short term, the USD's path of least resistance is up. And that's just where it starts. International entities that have loans to repay (governments, corporations, even Russian citizens took out home mortgages in USD) are going to see the principal on their loans steadily rising and take steps to hedge their liability or exit their loan. Speculators and investors will pounce and the dollar index could theoretically shoot towards the moon for a time. Brent Johnson's Dollar Milkshake Theory states it simply. Jeff Snider's interviews about the Eurodollar system talk about some of this too. Both guys are featured here on RV. Excellent interview. Please feel free to correct anything I've stated here. I'm still getting my head around this and I'm often wrong.
    • TR
      Travis R.
      3 April 2019 @ 21:00
      Fiat money is the problem. Dollar trading against other fiat currencies. All finally comes unraveled when gold and silver finally start running.
    • DS
      David S.
      6 April 2019 @ 19:17
      Well said Michael B. Much better than I could do. Thanks for your input. DLS
    • DS
      David S.
      6 April 2019 @ 19:32
      Travis R - Since we can buy and sell digital and physical gold every day, we are on a gold standard. I agree with you about fiat currency and debt, but it is the world we trade in now. A price of US$5,000 to US$10,000 for an ounce of gold in a free market will be much better than any government trying to peg its fiat currency to gold. DLS
    • RA
      Robert A.
      7 April 2019 @ 18:43
      I wanted to chime in with a “well said Michael B”. Great articulation of Raoul and Brent Johnson’s view point. Per latest Macro Insiders, we should know which way the US dollar is going to break within the next few weeks. It’s all one trade now—the US $. Julian wrote a piece which basically said if Powell is going to move to reflate he’d better get on it quickly....I just wonder if Powell will be “slowed down” by the Political badgering for the 1/2 point cut. As Julian points out dovish “talk” and stopping the QT isn’t “easing”.