? The Answer: Is a Financial Crisis Coming? (w/ Raoul Pal) | Recession Watch

You know, it’s been one of the most interesting two weeks of programming we’ve ever done at real vision I think it was really useful to come with a kind of theme and test a hypothesis and for me personally I found it incredibly useful because you know what, I write and look at this stuff. I kind of operate in a vacuum where I Don’t try trying to filter down the noises and I try not to listen to too many people But this comes to a point where you need to make a call and with that you do need to Open up the filters a bit more and hear some more opinions and the way to do that is get the people that you trust and Again, as you can see from the from the two weeks program, it’s not necessarily people with the same view as me So I’m not trying to get confirmation bias in any of this What I’m trying to do is have a nuanced understanding so I can somewhere right where I’m wrong And how to play it So I think over this week I’ve learnt that much like I set up a Twitter Survey at the beginning of this which was to see what people thought the probability was of a recession in the next six months starting and It was split 50-50 basically So of the I think it was five or six thousand people in Twitter who answered that short survey Everybody was split and I think we’ve seen that from the programming over these two weeks that people aren’t quite sure Where it’s gonna fall? People who look at the data itself Tend to have seen some sort of stabilization in some areas that has made people pause I remember Teddy valet was saying that some of his forward-looking indicators might have turned up But if we if we remember from a Korean lakshman, he wasn’t so sure that he was seeing any pickup He just didn’t see the the more determined deceleration of growth So it’s not clear from those guys whether we’re going to say anything weaker yet But when I speak to people like John Burbank and I hear from people at Christopher Lee Ari and and others They’re more concerned and I think that that those are the people have been paid to have the view And I think that’s interesting that they’re starting. So look the balance of probabilities is for something much bigger for me, it’s it’s clear that You’re gonna make all the money from making this call and you see a few of these and sometimes you’ll get them wrong and sometimes You’ll get them, right? 2015 was one of the times I nailed it all the way down and then I thought you know This is gonna turn into a full recession not just the collapse of the oil market and and Kind of global industrial production and that didn’t happen because of the stimulus but we’ve heard over this this series of shows that That kind of stimulus isn’t there there’s a real concern the Fed might be pushing on a string As well much like the ECB have been that there’s really nothing they can do that’s going to generate the kind of growth that We need to offset this and I think the aging population dynamics and other issues Are really real and meaningful. But you know, does that mean that the equity market is a bad place to invest? It’s not clear yet. What’s gonna upset that Apple car? But I do think that the wheels have been set in motion. My view is always that There is the general business slowdown, but then there’s the one thing that’s hips things over the edge And I think that one thing was tariffs I do think that they were much more Significant in their impact on psychology of businesses than anybody appreciates. I also think that the dollar is a big risk in this equation and I talked about it in a in the original expert view and Other people have referred to it The dollars been thrashing around in a very tight range To me as we’re shooting this. I have a feeling it’s gonna break higher I really do it had every opportunity to break lower We had the Fed cutting rates the ECB cut about everybody cutting rates and everybody said the dollar will collapse in that environment We’ve seen that we’ve seen some sort of pause in the trade tariffs for negotiation issues That didn’t cause the dollar to go lower. In fact, I can’t see anything that’s going to cause the dollar to go lower than here we’re going into the Fed meeting and I’ll talk about that in a sec But the reality is is if the dollar is not going lower chance. It’s gonna go higher it could get stuck in a range But I don’t think it the structure of the market to me feels like it’s going to break higher if it does We know what to do. That will tip the dynamics Significantly towards a much faster slowdown of global growth a much faster deceleration of commodity prices a much faster deceleration of Emerging markets and I think that is the thing that would tip everything over the edge and I think it is coming But as we come into this process now we need to think ok How do we play this and the FOMC meeting that is coming out around the same time that you’ll be watching? This is gonna be a tricky one because some of the data has not been as weak people have been following employment data, for example So the markets trying to grapple with is it gonna be 25 is it gonna be 50 s ago mean nothing? There’s many people who think it should be. Nothing. The Fed should not be cutting rates I think the Fed urbe hind the curve and they need to cut 50 and 50 again because of the number of factors that I talked about in the in the original program, but what’s what’s important now is what are the outcomes from that meeting and how I look at it is this if the Fed cut Zero, I nothing happens. I Think that the dollar screams higher the dollar screams higher oil Collapses commodities collapse global growth collapses and the Fed a cutting 50 and 50 again super fast so I think if they don’t cut The bond market sells off very quickly and then rallies very fast along with the dollar If the Fed go 25, I think it’s a similar situation. I think The market may or may not be pricing in 25 or 50 at that point Let’s say 25 and the chances are that this moment you get the 25 card the mas gonna go what’s next we have the price and probability of another cuts because the Fed never cut once So in that case the Eurodollar market the Fed Funds market and the bond market probably start rallying It’s the short end of the market that I really care about John Burbank laid out that case of why that trade is such again I’ll trade as I think rates go to zero, so I think that’s setting up as a great trade the other thing that I think is super interesting to me is when I look at the 2000 recession and the 2008 recession The the dollar played a very big part in that and the dollar rallied both times and the reality is the dollar rallies as soon as the Fed cut and particularly in 2001 in January 3rd 2001 the dollar had been selling off in the anticipation of the rate cut as soon as it cut the dollar just exploded higher and that combination of the strong dollar into the Cycle meant that the Fed were forced to cut faster So I think that is coming in this whole situation if it’s a 50 basis point cut I think maybe the dollar says range-bound for a little longer But remember the dollars based around a smile and that dollar smile is if things are really bad Then the dollar goes up if things are really good Then the dollar goes up and it’s in the middle Where the devil does badly and in this environment? I do think that if the Fed are going 50, and they’re communicating why Then it’s telling us the global growth is bad and the dollar should rally. So those are my kind of outcomes I do think that you’re gonna get the opportunity Maybe before the meeting to start buying bonds again Particularly the short end and I think there might be a chance to sell oil and copper We looked at the chart of copper in particular in the first Program and I think that’s an interesting opportunity to look at the equity market. I’ve called it the vanity trade we all want to short equities because you know You sound like a hero because you sound like Paul Tudor Jones in 1987. The reality is is equities in a bear market are Not the best risk return and the reason for that is their volatility goes up and volatility in equities very high volatility means that the reward you get out of that trade is Less high-quality. The volatility doesn’t go up as much in Euro dollars. For example So the kind of risk rewarded the Eurodollar trade is far superior in every measure than the equity trade Occasionally you’d nail it dead right in equities and things just freefall and it works in your favor That’s not the easy trade. I remember it So well, I think I’ve recounted that story before of a good friend of mine in 2000 2001 who got it dead, right? He was like, I’m bearish I need to short the equity market. He shorted the equity market and Because he he over sized his trades what he found was every time he should have been adding to a trade He was getting stopped out every time he should have been taking profits he was adding to trades and he just got chopped up and he lost 30% over that period from being right and that’s the Volatility of the equity market and how hard it really is to trade an equity bear market Stan Druckenmiller told us very clearly as well as he says all of his monies to be made from the bond market and in particular He’s another euro dollar trader. So I think that is the key thing to focus on right now. The other thing is ok Maybe I’m wrong and I think everybody told us we should see a resolution of this over maybe August September and October If we start to see the negative resolution over that period of time we know what to do if it’s a positive resolution, and this is another false alarm then it’s pretty simple the dollar should start to Weaken, and with that emerging markets become the asset of choice Commodity markets have we’ve heard from a few people are relatively discounted So in which case you’re kind of taking the lid off that market and we can see commodities rally strongly So that’s how I look at this so that there would be a reflation trade to be had I don’t think it’s a great reflation trade. I don’t think it’s a high quality trade but I Understand how we could trade it if we needed to But for me the balance of probabilities lies on Getting that recession call, right? This cycle has been as similar to the 90 cycle the other longest cycle in history It has been incredibly that had those two false lows like this one had and then eventually it broke It feels like we’re there now It feels that people don’t want to trust What they’re seeing because the equity markets at its highest the equity market was at its highs in 2002 It was pretty much at its highs in 2007 so don’t trust the equity market trust the bond market the Bond markets the thing that tells you the story and it’s been screaming to you That the global economy is slowing down fast and the u.s. Is part of it And I think that is the story that I think many people don’t understand most people watching real vision have not been historically bond market guys It’s been an equity world out there and to shift your mindset and to understand the opportunities across asset classes Gives you the real edge that it takes To make money in a really complicated situation like a recession. So hopefully you found this series of programming as useful as I have You might reach different conclusions. And that’s fine again. I’ve always said there are no certainties in this world All I’m trying to do is corral all the information you could possibly need to make an informed opinion Because being ahead of the crowd Taking the opposite opinion to what you think the market’s thinking is where you make the real money you can jump on the trend later But first this the turning point that matters and I think the turning point or the returning point With the bond market yields falling is upon us again And I think the opportunity to make a lot of money is coming up rapidly. Thank you for coming with me on this journey It’s been a real journey of Discovery and learning which is what I set out to do in the beginning and I wanted to bring you all with me To come and find out about my hypothesis. Was it right? Was it wrong where the weaknesses where the strengths and I think that’s been the great thing about this whole two-week Journey of discovery that we’ve all found things that we didn’t know To learn new things is really what we’re in Watching real vision for it’s something that adds the value to our investing lives, and I hope you found it super useful

100 thoughts on “? The Answer: Is a Financial Crisis Coming? (w/ Raoul Pal) | Recession Watch”

  1. "Weakness" of dollar is happen because euro zone, China and other important countries are weakening their currency.
    This is what President Trump keep saying and fighting against.
    Right now everyone plays with Russia even our allies across the world are turning back to the US.
    We are kind of alone in a ferocious trade and currency war, besides a global influence war.
    If America can get out of this, it means that is a real global power, otherwise it will be very bad for us.
    I'm to small and less informed to figure it out how they going to do it ,but the future will open up to us too in a way or another.

  2. ???? Everyone praying for equity market crash…. its not going to happen. Too many people expect it. The Fed is going to print and cut rates again. Better off buying gold, bitcoin and equity market. Bonds are a speculative scam at this point. Anyway we arent crashing. Too many ppl want 50-70% drop, maybe it'll give 10-20% and come back. Too much stimulus to fake prop up market ????

  3. You know, you talk about eliminating the 'noise' as a virtue of this channel, but Real Vision fosters an incessant noise about this always-imminent recession. The interviews are consistently of high quality and the guests are always articulate, sapient people, but it's generally the same distended conversation about low interest rates, moribund economic growth, collapsing fundamentals etc

  4. Notice no one except Howard Marks (and that one hedgie who allegedly put all his own money into going short) is talking what happens to ETFs in a crash. Junk bond ETFs–do they disappear like XIV? What distortions in the ETF markets does major volatility in the underlying markets cause? Could even funds like SPY close for a major amount of time almost regardless of market direction if vol spikes?

    Does anyone know? Because this will all be new territory.

  5. you just spent 13 minutes telling everyone you have no idea what is going to happen, what a waste of 13 minutes

  6. Raoul, your YouTube channel (Real Vision Finance) is the best to understand Finance & Economic conjuncture. If Morgan Freeman''s voice is the reference to do the narrative of our lives, your voice is the reference to do the narrative of business cycles & the compelling story telling related to it. I know a trader usually don't share the tricks to make money. After all, if there is a way to make money in the industry, no one will talk about it, and traders firms keep the insights as a secret. But with you Raoul, I really feel you are sharing with us a significant part of your secrets. You also give us the tools to generate our own secrets related to the macro conjuncture.

  7. I enjoyed your last couple weeks of interviews, I think it was very informative and eye opening. Keep up with the great interviews.

  8. Trump working hard to bring about a collapse of not only America but of the World to bust the bubbles. Then he and China billonaires can come in and scoop up the bargins. Buy when there is blood in the street. This has been Trumps objective all along. China is in on the game. America is for sale after the collapse.

  9. Richard Dent predicted the collapse way back in 2017. Said major collapse going to happen at end of 2019 or 2020. Said it's all about demographics. We have reached the end of the Baby Boomer spending cycle.

  10. PLEASE don't stop making these videos. I love them. Please continue, gosh okay I'll be on your show if it'll keep it going. The market from and artist experience.

  11. This guy doesn't see the bigger picture. Also makes the mistake of taking the govenment statistics at face value, rather than the propaganda they are. Better economic analysis from Peter Schiff, or Michael Pento

  12. An even handed (unbiased) prognosis on reasons for and the consequences a recession likelihood. But not a true crash.
    If someone was to suggest prior to GFC an existence of future economic consensus of:
    world wide QE, negative bond yields, exponential debt growth yet slowing growth, sky high PE ratio's, all at the same time they would not be taken seriously.
    I recall Mohamed Aly El-Erian of PIMCO where he served as CEO and co-chief investment officer, describing the GFC critical days, as he called his wife and told her to go to the nearest ATM and withdraw as much cash as she could, because he was not sure if their will be a cash withdrawal facility the following days and how long for. All the credit markets effectively froze, including whole financial system.

    We seem to always forget the lessons, of how/what may cause a crisis, especially if the last event is more than 10 years old.
    If a recession comes (not the crash proper) what can Central Banks do ? More of the same ?? Is all this sustainable ?

  13. Only one question to answer: How many people out there can afford to buy anything without taking on debt? The market is shrinking, and so are profits.

    A smile? The Dollar is the world’s reserve currency! Others countries have to buy Dollars to buy oil. That’s a guaranteed demand.

    The Dollar will go lower, when all the countries that are sick of buying Dollars to pay for oil break out and buy from Iran, who won’t take Dollars anymore.

  14. you are in a handful of people who really know what they are talking about without an agenda. Please continue as you supply clarification as to whats really happening for the little guy

  15. I want to know who is whispering in Trump's ear every time that the market is looking like it's going to crash, telling him to say something to goose the market! Is it Navarro, maybe Mnuchin?

  16. Chech this: Bill HR 5404(Gold back standard) 1971-2021(50 years of Debt<>Dead System) look at the new $100.00 Bill. 1/2 is Federal Reserve Note. 1/2 is Treasury Department "Gold Liberty Bell" note. Trump love Gold. CONSIDENCE ?

  17. 55 seconds in please just get to the point. There are a bazillion videos on the economy. My time, the viewers time is valuable. I clicked off.

  18. tariff , bond , rate cut didnt break the dollar, but if Gold keeps rising that itself will destroy the dollar. i think gold is the only thing that can break the dollar. bc zero interest rate didnt even do it. I believe gold could.

  19. Great video as always. Been a following since the beginning. My day job is markets. I think there is one clear message in this video, equities are historically extremely tough to short, especially in the US. This advice to trade bonds if you have a strong view is stellar. The bond call is, and will continue to work, however, where I feel the toughest question to answer is the fact we are in a zero or negative yielding world. We have never seen this before so cannot truly grasp what will happen next. I think Mother America looks fine baring Corp Debt(as you guys point out) so why cannot this big bull market in equities continue for a lot longer especially with rates so low and thus making equities cheaper and cheaper and of course we have TINA and the search for yield. If I were sat down with you I would want to discuss whether the only thing that could bring the world down tomorrow is in fact a surprise spike in inflation. No sign of it today, it would have to be a surprise. Corp debt market could keep rolling on with US rates so low…why not? And this is the biggest issue the equity market or recession guys face. Low rates keeps the game going and this COULD go on for a lot longer UNLESS inflation surprisingly ticks up.

  20. The question is ….is a financial crisis coming, and will it raise further questions? Because, lets face it, questions need answers and that's the point of the question. But, when the answer is a question………

  21. Dollar goes higher, Yuan goes lower, buys less oil, oil goes lower. It had the other way around a few years back, why that benign cycle stopped? because its not a real recovery anyway. Its a scam!

  22. Buying precious metals and bitcoin might be a way to protect ones wealth standard, but don't forget to pay off your debt and minimalise your costs if you can. Better to have a food and water supply as well. With such high debt and recession signals around the world, an extential crisis cannot be excluded. When food and water are scarce, you cannot eat precious metals or bitcoin.

  23. RAOUL sir we TRULY appreciate YOU AND your TEAMS hard work and sharing knowledge . something very very big is going on underneath of every market . surely it will be a surprise for everyone. I THINK TO SEE WHERE NO ONE IS LOOKING . WE WILL GET ALL THE ANSWERS

  24. The truth is the parasite classes that do not produce (investment gurus, politicians and lawyers) are responsible, and deep down you realise this

  25. Enjoy very much your interesting and professional various information!!! Always a pleasure being with you!!!
    Swiss 61, Paraguay

  26. I struggle to understand why the dollar should increase in value when we actively see China, Ireland, Russia selling US debt, which arguably defines the dollar value. Indeed the volume of money printing since 08, how can this currency grow when so much more now exists? This assumes a great demand for the dollar is upon us, which is fair as shares are cashed in for dollars. I think any demand for dollars will be temporary.

  27. Clearly, even the experts, professional money managers, and big shot traders can't make head of tails of the macro cycles at play.
    Stick to Permanent Portfolio and sleep easy at night.
    Diversification, Diversification, Diversification.

  28. Thanks Raoul. I've really enjoyed this series of videos mate. I've been using you for my ongoing education and for that I offer you a special thank you.

  29. At some point the video titles will change from: Is a recession possible?
    To: How to financially prepare yourself for The Great Recession #2

  30. So what exactly is the trade idea here when the crash happens? Trade $€ pairs? Or buy corporate bonds when they tank? How profit from the "once in a lifetime chance"?

  31. Awesome content. Although I had a Series 6 and Series 26 a million years ago, bond market is over my head. Thanks for all you do in explaining things.

  32. Clearly I'm not your typical viewer … but with <2K likes … you have GOT to stop speaking "financial word salad" … a "MUCH FASTER DECELERATION?" …. have words pop up that say, "Hey, Stupid! This is what the hell that means! (Now go back to kindergarten)."

  33. This guy has nothing to say, get no intuition, and negative charisma, only speculative thinking going nowhere!

  34. No mention of gold? Gold is what's going to continue to rise, no matter what. How? Because the world's largest central banks have painted themselves into a corner. The low interest rates of the last 10 years have created such massive asset bubbles, they will feel compelled to lower rates even further, to zero and negative real rates of return. That's what's different here. At zero or even negative rates of return on sovereign bonds, combined with major structural uncertainties, like what's going to replace the US dollar as the world's reserve currency (hint: most like gold), gold is the ultimate safe-haven, not the US dollar.

  35. The fact is the system would have collapsed years ago if not for CB debt 70 trillion more since 2008/money printing/manipulation/things are not normal. Since when have all banks worked together?/15 trillion of negative yield/record low rates/20 trillion pumped into markets by central bank sand co forth/As professor Jack RASMUS SAID IN HIS BOOK. "Markets are now addicted to constant liquidity injections.from Central Banks.

  36. So they take it to 0, many currently riding treasuries sell for dollars (otherwise risk bag holding), dollar goes higher still, Fed has no control, Globalists lick chops as collapse of current financial system has us minions screaming for "safety and security", NWO ushered in.

  37. So the probability of the dollar rallying is high. So that would mean that oil , silver, copper and gold etc. will go LOWER. Correct??

  38. Looking for recommendations. I love content from Real Vision Finance, but also looking for other channels which I can get quality content and reliable information. Any Recommendations?

  39. I have been following your channel for quite some times. and overall you did an amazing job so far.
    You feel it like everyone else that something big is going to happen but you don't know when.
    let me give you some hints:
    1-The S&P will move toward 3050 to 3100 in the next couple of months to finish its fourth leg into Higher -High.
    2-gold and Silver mining companies will correct around 20 to 25 percent in the next couple of months.
    3-Dollar index(DXY) will move toward 100 in the next couple of months.
    4-Gold and Silver will correct 5 to 7 percent in the next couple of months.

  40. Why tf is everyone on this comment section trying to hoard metals when Raoul just told you to trade the bond and Eurodollar market? Those markets are setting up a couple times in a lifetime opportunity.

  41. the roth schild created government debt is a tsunami building up..
    when the now $22.5 trillion deficit gets too big to service, default.. griddageddon

    "Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it.”
    Woodrow Wilson, The New Freedom

    die falscher lends
    government spends
    makes i r s extract
    to pay the loanshark back

  42. When you are sitting in a 747 with smoke filling up the cabin, and a Trump voice telling you that the plane is doing great! Cold sweat should start to roll down your spines….

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