Insider Talks – September 2018

Published on
September 7th, 2018
29 minutes

Insider Talks – September 2018

Featuring Raoul Pal, Julian Brigden

Published on: September 7th, 2018 • Duration: 29 minutes

Summer is over and everyone's focus is back on markets and the global economy. Raoul and Julian look beneath the surface of current market conditions and highlight some of the key themes across economies, sectors and asset classes. Filmed on 5 Sep.


  • SR
    Steve R.
    9 September 2018 @ 07:03
    Ok, so I get your USD thesis....... BUT, what if the US markets crack much sooner than you expect, which at these levels wouldn't be a surprise? In that case, because so much of the US domestic economy is tied to the US market, this would have a major impact on consumer spending, almost immediately, especially on big ticket items. The retiring baby-boomers would just want to get out in a rush of panic?. US companies would put hiring plans on hold in an instant. (I also note many companies are actually getting their current employees to work longer hours rather than hire more employees - this makes perfect sense this late in the business cycle). If the market drop is big enough the FED would likely stop or put on hold QT and/or the next rate rise. This is turn would crush the USD (and Trump wants a lower USD). Under this scenario EM would rally strongly, along with commodities and the DM/EM divergence mean revert. This I know is a contrary view to your base case, but IMHO, it's just as likely? I'm open to constructive critique.
    • LD
      Lance D.
      9 September 2018 @ 15:30
      Not sure about anybody else but i think its a real good idea to have a plan for a weak $ as well as strong $ . i could be wrong though
    • HO
      H2 O.
      9 September 2018 @ 19:07
      Yes, an important scenario. Any more comments on the stagflationary bust scenario? When the dollar cycle does crash out, US rates are going to jump amid very toppy markets and an already stretched fiscal deficit. Trump wants a lower dollar, but appears to have little if any appreciation for how that might occur and the second order effects if it does.
    • JB
      Julian B. | Contributor
      25 September 2018 @ 20:04
      Steve its an issue of sequencing. If we get a US market drop my bet is that it will trigger a global risk off move. The US market is simply too large to allow the US to implode without broader implications. At least initially, that should be $ positive as US investors bring money back home (we have discussed how in the face of a lower US current account its been US capital outflows that have kept the global $ supply stable). Yes eventually at some point, the pain will be so great the Fed will ease and the $ will weaken but not initially.
  • JJ
    Josh J.
    9 September 2018 @ 10:31
    Hi Raoul and Julian, Are there any instruments for retail to watch the CDS for US, Europe, and EMs? Thx, Namit.
    • LD
      Lance D.
      9 September 2018 @ 15:32
      Good question Namit
    • JJ
      Josh J.
      10 September 2018 @ 19:46
      I read about WYDE and TYTE ETFs. Raoul & Julain : any take on this?
    • JB
      Julian B. | Contributor
      25 September 2018 @ 19:55
      Gents I haven't seen any retail ETFs ...part of the issue is that post the GFC you can't trade naked underlying sovereign CDS. You must own the underlying bond.
  • JK
    James K.
    22 September 2018 @ 04:12
    Just read an article in the WSJ on the rate of repatriating profits. Seems a bit tepid in Q2. In the event of a downturn in the US could corporate cash needs be enough to exacerbate the rise in the USD? Or would tax consequences prevent this from happening in mass? Thoughts anyone?
  • MN
    Michael N. | Contributor
    19 September 2018 @ 10:15
    great discussion. very helpful.
  • JK
    James K.
    18 September 2018 @ 22:28
    Curious to get your reaction to today’s events. Specifically tariffs announced and none of the expected movements. Was this priced in already? Other factors? Love to get your take.
  • RS
    Rajesh S.
    9 September 2018 @ 22:28
    Does anybody know the video that Raul refers to on Rules based .., Also the date of Julien’s video on road map. Thanks.
    • DD
      Donal D.
      10 September 2018 @ 09:20
      I think Julien's video on the road map is Aug 9th
  • NI
    Noah I.
    9 September 2018 @ 16:35
    Raoul and Julian, Speaking of a Cold War-esque escalation with China I thought you and some of the other readers (particularly anyone holding BABA) might find this to be an interesting read: Everyone knows about the accounting discrepancies at BABA but let’s be honest, I’m sure none of us here have actively taken the time to read through BABA’s absurdly convoluted filings and reconcile the disparities. Well, this wonderful man, Bob Wittbrot — currently the owner of an insurance agency but formerly a CPA, auditor and CFO — has taken the time out of his life to do so since its IPO. He makes some assertions that may be a bit sensationalist (strong CCP involvement), however his dissection of some of the absurdities within their 20-F filings is on point. It’s hard to believe a company with a market cap as large as BABA could potentially be goosing their filings and getting away with it. Then you take a look at the 20-F and it makes Amazon’s filings look like Dollar General. Personally I think Chanos was onto something but his timing was wrong, fighting the momentum in Chinese tech names had been a losing proposition for the past few years. It will be interesting to see how this all unfolds in the next crisis. Is BABA a house of cards or do their 900 subsidiaries actually do something besides funnel money out of US investors pockets? Are the numbers entirely fabricated, are they simply goosed a bit, or are they genuine? I’d bet everything I have against the latter. The question is what is the extent of the fraud and can their organic growth allow them to sweep this under the rug for the foreseeable future, or will the trade war and potential ensuing crisis cause cracks in the shaky foundation? Also, thanks for another great video!
    • NI
      Noah I.
      9 September 2018 @ 22:31
      I swear the above post had line breaks on mobile. Looks abysmal on the desktop site! Sorry to anyone that sees it as a brick of text. I'm going to copy and paste a quick excerpt from the blog so everyone can decide if they're interested in reading it or not. It really is a fun read. And if this post shows up as a brick of text someone please, for the love of God, tell me how to manually add line breaks for all of our sakes! (Going to try   and see if it adds a line break below so ignore that if you see it)   Alibaba Pictures - Page. 162 After years of delay they've finally written down (and consolidated) Alibaba Pictures, taking an impairment charge of RMB18.116 Billion (US$2.888 Billion). They were also careful to mention on page 162: "Nonetheless, the market value of our investment in Alibaba Pictures as of March 31, 2018 remains well above our original investment amount that we paid in June 2014." This Alibaba Pictures write down was coincidentally offset by a consolidation gain for the write up of Cainiao, here's the note buried on page 129. "In October 2017, as a further step to implement our New Retail strategy, we completed a subscription for newly issued ordinary shares of Cainiao Network for a cash consideration of US$803 million. Following the completion of the transaction, our equity interest in Cainiao Network increased from an approximately 47% to an approximately 51% and Cainiao Network became our consolidated subsidiary. We expect that Cainiao Network will help enhance the overall logistics experience for consumers and merchants across our ecosystem, and enable greater efficiencies and lower costs in the logistics sector in China." The amount of the gain is buried on page 145. "The increase was primarily due to a non-cash gain of RMB22,442 million (US$3,578 million) arising from the revaluation of our previously held equity interest in Cainiao Network when we acquired control over Cainiao Network in mid-October 2017." It is indeed fortuitous that wonderful write-up opportunities like Cainiao pop up just when a businesses like Alibaba Pictures begin to falter. Alibaba management is truly blessed. The obvious question I have is, the total gain booked is US$4.137 Billion (Pg. 4) and that includes the Cainiao gain of US$3.578 Billion that would indicate that there's another US$559 Million in write ups that are not described anywhere else. In a mainland investment environment where equities are down substantially in the last six months, could it be that these write ups might be illusory and there are more write-downs/offs on the horizon?
  • GL
    G L.
    8 September 2018 @ 21:42
    A USD shortage of the sort we had before in the '82 with the Latam debt crisis and in the 97/98 with the Asian financial crisis is less likely now as EMs on the whole have much more USD reserves, they have fewer structural imbalances (exceptions being Argie and Turkey), fewer currency pegs and more FX hedging. ST external debt is also mostly covered on aggregate by reserves, so implies no rush to secure USDs. On the other hand, some EM imbalances have worsened in some cases, debt/leverage has increased (mostly China) and this means more USD debt exposure. Yet, cross-currency swaps markets are not showing any unease. Nor is LOIS. Perhaps these could spike suddenly later and the USD does get out of control, but the big spanner in the works is US trade tensions. The escalation will hit the US consumer, and this is bad for stocks (camouflaged by BBs) and this could in fact be the trigger. So, not from a weaker China and weaker Europe, but a sell off in overvalued US equities that causes the Fed to ease off, arresting and reversing the USD's ascent. The USD smile is therefore a lot wider now than it has been in the past (due to QE and fiscal stimulus globally) and this means there is more space between good and bad USD rally, which means more time for the US growth narrative to deteriorate and send the USD lower.
  • AM
    Alonso M.
    8 September 2018 @ 16:06
    Have European banks "hedged" some of their credit risk through credit default swaps? If yes, who are the counter parties?
  • MW
    Marco W.
    8 September 2018 @ 13:10
    Just one possibility I think of in such an uncertain and volatile world. The LTCM of now could just be the passive investing ETF owning internet and technology stocks, like FANG. When these stocks reach a reversal point like Bitcoin in Dec 2017, the stampede could be in similar scale as LTCM. Just look at the damage Tencent (700 HK) did to HOng Kong market. Another point is that foreigners have been pouring money into internet and tech stocks in US market as a carry trade, which indirectly benefited USD. If the carry trade reverse, USD will be sold.

Mark Yusko

Morgan Creek Capital Management, Co- Founder, CEO, & CIO

Mark Yuskois the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management. He is also the Managing Partner of Morgan Creek Digital Assets. Morgan Creek Capital Management was founded in 2004 and currently manages close to $2 billion in discretionary and non-discretionary assets. Prior to founding Morgan Creek, Mr. Yusko was CIO and Founder of UNC Management Company (UNCMC), the Endowment investment office for the University of North Carolina at Chapel Hill. Before that, he was Senior Investment Director for the University of Notre Dame Investment Office.Mr. Yusko has been at the forefront of institutional investing throughout his career. An early investor in alternative asset classes at Notre Dame, he brought the Endowment Model of investing to UNC, which contributed to significant performance gains for the Endowment. The Endowment Model is the cornerstone philosophy of Morgan Creek, as is the mandate to Invest in Innovation. Mr. Yusko is again at the forefront of investing through Morgan Creek Digital Assets, which was formed in 2018. Morgan Creek Digital is an early stage investor in blockchain technology, digital currency and digital assets through the firm’s Venture Capital and Digital Asset Index Fund.Mr. Yusko received a BA with Honors from the University of Notre Dame and an MBA in Accounting and Finance from the University of Chicago.

Anthony Scaramucci

SkyBridge Capital, Founder & Co-Managing Partner

Prior to founding SkyBridge in 2005, Scaramucci co-founded investment partnership Oscar Capital Management, which was sold to Neuberger Berman, LLC in 2001. Earlier, he was a vice president in Private Wealth Management at Goldman Sachs & Co. In 2016, Scaramucci was ranked #85 in Worth Magazine’sPower 100: The 100 Most Powerful People in Global Finance. In 2011, he received Ernst & Young’s “Entrepreneur of the Year –New York” Award in the Financial Services category. Anthony is amember of the Council on Foreign Relations (CFR), vice chair of the Kennedy Center Corporate Fund Board, a board member of both The Brain Tumor Foundation and Business Executives for National Security (BENS), and a Trustee of the United States Olympic & Paralympic Foundation. He was a member of the New York City Financial Services Advisory Committee from 2007 to 2012. In November 2016, he was named to President-Elect Trump’s 16-person Presidential Transition Team Executive Committee. In June 2017, he wasnamed the Chief Strategy Officer of the EXIM Bank. He served as the White House Communications Director for a period in July 2017. Scaramucci, a native of Long Island, New York, holds a Bachelor of Arts degree in Economics from Tufts University and a Juris Doctor from Harvard Law School.

Michael Saylor

MicroStrategy, Co-Founder

Mr. Saylor is a technologist, entrepreneur, business executive, philanthropist, and best-selling author. He currently serves as Chairman of the Board of Directors and Chief Executive Office of MicroStrategy, Inc. (MSTR). Since co-founding the company at the age of 24, Mr. Saylor has built MicroStrategy into a global leader in business intelligence, mobile software, and cloud-based services. In 2012, he authoredThe Mobile Wave: How Mobile Intelligence Will Change Everything, which earned a spot onThe NewYork TimesBest Sellers list. Mr. Saylor attended the Massachusetts Institute of Technology, receiving an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology, and Society.

Alex Saunders

Nugget's News, Founder & CEO

Alex Saunders is the founder and CEO of Nugget’s News, a digital media company focused on all things crypto. Alex has been captivated by cryptocurrency since 2012 and in 2017 he began educating globally on the benefits of cryptocurrency and how to safely acquireit. Nugget’s News has been listed as a top-20 podcast by Business Insider, ShapeShift and Lifehacker and has over 120k YouTube subscribers with 9 million total views.Alex is also heavily focused on his cryptocurrency education platform Collective Shift which currently serves over 4,500 members. provides his unique perspectives by utilising his expertise in fundamental analysis, technical analysis and market sentiment. He is working towards his mission of making it easier for everyone to understand the financial world.

James Putra

TradeStation Crypto, Inc., Sr. Director of Product Strategy

James helped launch TradeStation Crypto’s offeringwhichutilizesa true online brokerage model that self-directed investors and traders have come to expect for equities, futures,and foreign currency markets. He is a reputed crypto asset specialist and blockchain thought leader focused on helping people find innovativeways to participate in this space. He is active in the blockchain community with speaking engagements, TV appearances and mentoring.James has over 15 years of experience in the Fintech industry.

Raoul Pal

Real Vision, Co-Founder & CEO

Raoul Pal is the Co-Founder and CEO of Real Vision, the world’s pre-eminent financial media platform, which helps members understand the complex world of finance, business, and the global economy. Real Vision members also have access to Real Vision Crypto, a cryptocurrency and digital assets video channelwatched by over 80,000 people.In addition, Raoul has been publishing Global Macro Investor since January 2005 to provide original, high quality, quantifiable and easily readable research for the global macro investment community hedge funds, family offices, pension funds and sovereign wealth funds. It draws on his considerable 31 years of experience in advising hedge funds and managing a global macro hedge fund. Global Macro Investor has one of the very best, proven track records of any newsletter in the industry, producing extremely positive returns in eight out of the last twelve years. He retired from managing client money at the age of 36 in 2004 and now lives in the tiny Caribbean island of Little Cayman in the Cayman Islands. Previously he co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul moved to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe. In this role, Raoul established strong relationships with many of the world’s pre-eminent hedge funds, learning from their styles and experiences. Other stop-off points on the way were NatWest Markets and HSBC, although hebegan his career by training traders in technical analysis.

Peter McCormack

What Bitcoin Did, Journalist

Peter McCormack is a full timejournalist/podcaster covering topics such as Freedom, Human Rights, Censorship and Bitcoin. Peter created and hosts the What Bitcoin Did Podcast, a twice-weekly Bitcoin podcast where he interviews experts in the world of Bitcoin development, privacy, investment and adoption. Launched in November of 2017, the podcast has grown to over 100 episodes with a guest list that is a testament to the diversity of knowledge and opinions that represent the broader Bitcoin community. Expanding his growing list of humaninterest recordings, documentaries and films Peter has recently launched theDefiancepodcast andDefianceTV.

Caitlin Long

Avanti Financial Group, Founder & CEO

22-year Wall Street veteran who has been active in bitcoin and blockchain since 2012. In 2018-20 she led the charge to make her native state of Wyoming an oasis for blockchain companies in the US, where she helped Wyoming enact 20 blockchain-enabling laws. From 2016-18 she jointly spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain start-up. Caitlin ran Morgan Stanley’s pension solutions business (2007-2016), heldsenior roles at Credit Suisse (1997-2007) and began her career at Salomon Brothers (1994-1997). She is a graduate of Harvard Law School (JD, 1994), the Kennedy School of Government (MPP, 1994) and the University of Wyoming (BA, 1990).

Hunter Horsley

Bitwise Asset Management, CEO

Hunter Horsley is Chief Executive Officer of Bitwise Asset Management. Prior to Bitwise, he was a product manager at Facebook, working on advertiser products including the multibillion-dollar sponsored content ecosystem and ad breaks in videos. Before Facebook, Horlsey was a product manager at Instagram, responsible for multiple advertising products generating several hundred million dollars of revenue. He is a graduate of the Wharton School at the University of Pennsylvania, with a B.S. in economics. Recently, Horsley was named a member of Forbes’ 2019 “30 Under 30” list.

Luke Gromen

Forest For The Trees, Founder & President

Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst.He is the founder and president of macro/thematic research firm FFTT, LLC, which he founded in early 2014 to address and leverage the opportunity he saw created by applying what clientsand former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America.FFTT caters to institutions and sophisticated individuals by aggregating a wide variety of macroeconomic, thematic and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his clients.Prior to founding FFTT, Luke was a founding partner of Cleveland Research Company, where he worked from 2006-14.At CRC, Luke worked in sales and edited CRC’s flagship weekly thematic research summary piece (“Straight from the Source”)for the firm’s clients.Prior to that,Luke was a partner at Midwest Research, where he worked in equity research and sales from 1996-2006.While in sales, Luke was a founding editor of Midwest’s widely-read weekly thematic summary (“Heard in the Midwest”) for the firm’s clients, in whichhe aggregated and combined proprietary research from Midwest with inputs from other sources.Luke Gromen holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University.He earned the CFA designation in 2003.

Meltem Demirors

CoinShares, Chief Strategy Officer

Meltem Demirors is Chief Strategy Officer of CoinShares, an investment firm that manages billions in assets on behalf of a global investor base, and is a trusted partner to investors and entrepreneurs navigating the digital asset ecosystem. Meltemoversees the firm’s managed strategies group and its New York office and leads corporate development. Previously, she was part of the founding team of Digital Currency Group. As a veteran investor in the digital currency space, she has invested in over 250 companies in the ecosystem. Meltem is passionate about education and advocacy, and teaches the Oxford Blockchain Strategy Programme and co-chairs the WEF Cryptocurrency Council.