Raoul Pal Profile picture
Sep 23 8 tweets 3 min read
When you are a Boomer Central Banker, everything looks like the ghost of the 1970's...heuristic bias will give unexpected outcomes (deflation) when total debt to GDP is this Image
Meanwhile, memes rule the world and the Central Bankers in their late 60's worship this meme: Wrong person for these times. Image
But the politicians (in their 70's mainly) are focussed on this meme...The Pension Crisis, where the system is forced to bail out past unkept promises. Voters will win in the end and household bail outs will come. Image
Everyone else can just worship #REKTGUY as rents are unaffordable, property remains unaffordable, real wages cant rise and central bankers are busy destroying wealth to get on the front of a book. Image
And the robots are coming for your jobs... Image
Everyone has to figure out in this broken system how they are going to make it. WAGMI? Depends what you own. I like the own the thing that destroys the old system. You can fight technology or invest in it but it ain't going away...
You can fight QE but it ain't going away (the debt is too damned high and Boomers are too damned old).

The J-Po might want to be Volker but the politicians will win (its the voters, stupid!) and the cowbell will return and when it does...
You need to own the stuff that goes up the most.

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More from @RaoulGMI

Sep 22
The bond market is now as broken as it was at the peak of the pandemic. Back then 10yr futures moves 10 handles in 12 days, right now its 10 handles in 36 days.

Liquidity is equally as bad.
Vols are as high...
It has totally decoupled from the business cycle...
Read 7 tweets
Sep 22
Welcome to my newsletter: Short Excerpts from Global Macro Investor!

As many of you know, I run a research publication that goes out to many of the world’s largest and most prestigious capital allocators.

Now, it’s time to share a bit of it with you...
rvtv.io/3C3oe5U
Some background...

GMI was born in 2005 when I retired from managing a large hedge fund, moved to the Mediterranean coast of Spain and started writing monthly 100+ page reports for a highly restricted paid membership consisting of the world’s most important...
hedge funds, family offices, sovereign wealth funds, institutional level investors, and pension funds.

Using a combination of technical and fundamental analysis rooted in a deep study of the business cycle, the report provides readers a comprehensive framework...
Read 7 tweets
Sep 22
OK, pulse check time. Fed out of the way... a few polls for you so we know how we are all thinking. There is no right or wrong! None of us knows...but thanks for voting!

SPX in next months:
Inflation in 2023 goes to:
ETH or BTC in 6 months time :
Read 4 tweets
Sep 6
Im trying to think through this...(will likely write about it in RV Pro Macro and GMI but gathering my thoughts...

Bonds have the largest disconnection vs business cycle in history...also vs. inflation and the dollar. Image
The issue it appears is QT and bond market liquidity. Liquidity is now the worse since the GFC... Image
And that is causing distortions in the rates markets, which is leading to shit like the Yen breaking... Image
Read 5 tweets
Sep 6
Understanding risk...

A Sharpe Ratio is (roughly speaking) the excess returns over the observable volatility of an asset. A Sharpe over 1 suggests you get more than compensated for the volatility of an asset. Its important... 1/
In simple terms, Sharpe <1 not great, Sharpe <0.50 a crap shoot, Sharpe > 1 a good risk reward.

For many reasons, its not a perfect guide but it helps understand if the risk you are taking over time is worth it...
If an asset has 30% annual returns and 30% average 30 day volatility, the Sharpe ratio is very roughly 1. If the returns are less than the vol, its <1 and above its >1.

It is a useful guide to finding if you have the right asset for your allocation.
Read 14 tweets
Aug 29
If the dollar keeps going, it's going to really break things. It has literally done parabolic...
There is literally nothing until 120 if we break this weak trend line...
And deviation from trend suggests it can get to 120 too...
Read 9 tweets

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