Resubscribed and am now catching up and matching how I was feeling trading these markets during that time period. Amen Raoul. Amen. Could've stopped at WTF.

I would like to hear Raoul expand a bit more on how he has come to his point of view. The last two Insider Talks were mainly Julian explaining his views. To that end how does Julian explain how we can get to 3 to 4% rates with all the corporate and personal debt that would need to be refinanced or paid down. Rates will be driven down by cutting back on consumption (consumers) or buybacks (corporates) and layoffs (corporates) which will drive rates back down as the economy slows and the Fed cuts rates.

IMO that insider talks was the best yet, maybe because were at such an important cross roads in market. I understand both of your points, but I must admit I have a very hard time understanding Julian's 1967 scenario. IF the fed was to go ahead and launch more stimulus they'd clearly be starting from much higher inflation levels than what we saw in 2016. But I find it more probable that this higher low in inflation from 2016 is exactly the reason why the fed does more cooing than actual stimulus. I dont understand why the fed would risk running inflation much higher and therefore pressuring rates to go much higher when this would clearly be a headwind to an over leveraged economy? As Julian points out inflation imo is what keeps the fed at bay and are FORCED to allow the cycle to play out. Please help me understand why they would risk 3-4% inflation and 4% plus on the US 10% all of this to me seems like a terrible idea at this stage of the cycle and where inflation and unemployment is running today.

It would be beneficial to review Druckenmiller's interview and Julian's "The jury remains out". While any dollar break up/down will be significant and almost everybody is thinking the others is bullish/bearish on USD, it would also be important to entertain the idea that dollar is going nowhere.

Just read over the April 10th, fed minutes and they certainly under delivered if we are to expect legs to this reflation trade imho. To me it seems like the market and the fed have this negative feed back loop. In order to get a fed to stop cooing and actually cut rates so that we can go long reflation I think the market needs to see lower prices to get their hand to act. Thats the message that Im getting from the fed as the odds of a rate cut for 2019 fall. What are you guys thoughts?

Super discussion, Raoul and Julian. If the reflation scenario plays out and the bond market crashes, won't we see a credit crises from rising interest rates since so many corporate credits are just above junk and 12% of the borrowers are zombie companies that don't earn the interest on their debt? With the demographics locking in very slow labor growth and productivity relatively low, higher inflation would just mean lower real growth.

Julian Slowing US growth and softening financial conditions etc, as now evidenced, does suggest a weaker dollar. And given its appreciation due mainly due to US outperformance are you suggesting any global decline will be equally matched ? I feel the US has further and faster to fall right now than any other market which should be weaker for dollar relatively speaking.

Great discussion. If these guys are baffled then imagine how I feel......

The change by the Fed has been amazing to watch. It makes sense to stop balance sheet run off as they don't have a great handle on how this works towards the end of an expansion, having never used it before but they do have an understanding of how raising rates works through the transmission mechanism towards the end of a cycle. This change in policy tools to be used makes sense. The big change is that I think they will be so reactive here on in from raising rates, they didn't want to go in Dec but didn't want to be seen rolling over to Trump. They also don't want to be blamed for ending the expansion so will have to now see an inflation issue arise before they act or some serious financial stability issues which will likely be addressed first by making banks increase counter cyclical capital buffers first but equities and credit can get more crazy from here with a more dovish fed on the sidelines.

Very nice. It would be nice if you could push the piece out as soon as possible after recording (or why not live-streaming actually). Markets are moving fast - a 3 day delay makes all the difference ;)

I really enjoy and appreciate the divergent views on Bonds and Dollar.....very balanced analysis. Thank you!

You both seem to agree that the fed could again stretch this business cycle out again like 2016 by smacking the dollar lower. I think everyone agrees this would reflate asset prices, but is it possible that no matter what the fed does whether they cut rates or not equities probably face tough headwinds from here. A reflation trade by the fed would send oil flying even higher creating a spending tax on US consumption which in turn should erode at GDP. I just dont understand how the fed can get out of this one. IMO inflation moving to 3-4% seems to be bearish equities as it will send oil much higher, rates much higher and should effect the corporate bond market, creating credits to spread. Please let me know your thoughts maybe Im simplifying this and over looking something.

Is it worth paying attention to ratio charts in the commodities arena to better understand whether the market is going to reflate? Say Gold vs. Cooper or Gold vs. Silver. This strips the dollar out of the equation, and I wonder if this tells us more about what is going on?

2016 reflation was due to 5 trillion printed by the globe central banks- not just janet yellen

Great talk Raoul and Julian.... This is some solid 'edge-of-the-seat' stuff right now in the markets!! I would just say that it would be worth just talking a little bit about China Stimulus as a risk to the short thesis. Of course a lot of EEM and Also Europe growth is very dependent on China.... We have seen (Although nothing is for sure) that: QE + China Stimulus = Rising markets QT + China Deleveraging = Falling Markets How about QT + China Stimulus ? What impact do these factors have and how is it split. Previously my short thesis was partially dependent on one fact which perhaps I have to reconsider... China cannot Stimulate / Deleverage properly because that would result in a weaker Yuan... and that weaker Yuan would only give Trump backing and ammunition in the Trade war. So far it seems like China is stimulating without weakening the Yuan ..... is that possible? or will there be a delayed impact on the Yuan. Interesting times.

Is 98 the line in the sand for dxy and will you take action the minute it crosses or will you marinate on it awhile before pulling the trigger

Is shorting RUT still solid thesis?

Guys: With the $ breaking up or down as a key signal, what if it just continues within a trading range for the rest of the year?

Stellar back-and-forth, gents. Invaluable to hear BOTH sides articulated so well. Chapeau!

Great discussion, thanks gents. I can't get my head around the catch22 where the Fed desperately needs to to reflate economy and either: ( 1 ) Fed just keeps cooing/is too slow. It all rolls over, bonds go higher. ( 2 ) Fed cuts. Yield curve goes from inversion to steepening, recession signals intensify, bonds go higher? (or I guess scenario 3 discussed today, where USD weakness saves us and the Fed get to keep cooing from the sidelines with impunity).

Thank you