Raoul Pal on Bubbles, Short Squeezes, and Systemic Market Risk.

Real Vision: Finance & Investing

Real Vision

Business News, News, Investing, Business

4.1 • 1.1K Ratings

🗓️ 6 February 2021

⏱️ 31 minutes

🔗️ Recording | iTunes | RSS

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Summary

Raoul Pal, Real Vision CEO and co-founder, joins senior editor Ash Bennington to share how his market framework is evolving. First, Raoul and Ash provide a sneak-peek into Real Vision’s upcoming campaign, “Is Everything a Bubble?”, where Real Vision will be featuring high-profile investors such as Lacy Hunt, Felix Zulauf, Mark Cuban, Lyn Alden, Howard Marks, and Joel Greenblatt. Raoul describes the current market environment, stating that investors are record long equities, dealers are record long gamma, and the market, as a whole, is record short Treasury bonds. Raoul and Ash then discuss the outperformance of Ethereum and “altcoins” relative to Bitcoin. Lastly, Raoul shares his views on the speculative fervor in the equity market and compares the short squeeze in GameStop Corp ($GME) to the historic squeeze of German automaker Volkswagen. For the February edition of “Inside the Hive Mind” by Weston Nakamura and the Real Vision Exchange, click here: https://exchange.realvision.com/post/inside-the-hive-mind-of-the-real-vision-exchange-feb-2021-issue-02-601d8ab41ab3070a37dcf1e3. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	Welcome to Real Vision. It's Friday, February 5th, 2021, just after market clothes in New
0:17.2	York. This is the Real Vision Daily Briefing. I'm here today with Ralph Powell, CEO and co-founder
0:23.9	of Real Vision and birthday, boy. Happy birthday and welcome, Ralph. It's always good to be
0:30.0	hit, especially on my birthday. Indeed, Ralph, so much going on right now. Let's just dive right in.
0:38.3	You made the case last Saturday for your piece about the perfect storm that you saw potentially
0:45.4	gathering effectively a ton of rising risk. Ralph, what's your view today? Now, the S&P bounced off
0:52.6	the 50-day moving average and Bond eels backed off the same trend. Had either of those broken,
0:59.1	it would have been bad. That has not changed the outlook that risk. We need to be on high
1:03.8	level risk whether it comes now or in the next four weeks. I really fear that it's coming. Just
1:10.6	to quickly recap, the market is record long, retail investors, record long trading and pink sheet
1:19.1	speculative stocks. Record long call options. The market maker is a record short option gamma.
1:27.1	Bond trade is a record short 30-year bonds. The market is record short, the US dollar. The market is
1:35.1	mutual fund managers are record low cash allocations. The hedge funds are record long net and
1:45.0	gross exposure. The market has the lowest on record short interest as a percentage of market
1:51.7	cap in history. If anything goes wrong, could it be rates go higher? Could it be something
1:58.0	in the plumbing breaks that's almost broke last week? Could anything happen here? Could it be from
2:04.6	a rising death from Covid that's unexpected because of new variants? Could it be anything? I don't
2:08.8	know what it is. Could it be because the dollar goes strong? We need to be very careful and I remain
2:15.8	on higher alert for all of this. So much so that we put together a piece for real vision over two
2:22.2	weeks. I want to drill other people's opinions on all of this and it's called essentially
2:30.2	is everything a bubble and really it's to look at that and is that even the right question?
2:36.6	Is the secular ships? We need to know the answers. We've got the best people in the world
	...

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