IN CASE YOU MISSED IT.
The two macro titans explain why they both think this liquidity crisis is far from over and that as the deleveraging continues, the dollar will continue to reign supreme. They also examine whether shorting equities is worth the risk, how much juice is left in the bond trade, and if it’s too early to go into gold.
Below is a brief transcript from the interview. Click below to watch the entire interview on Real Vision
RAOUL PAL: Good to speak to you. These are ridiculous times. The last time I spoke to you I think we started with, so what the fuck is going on? I think now, we're really into something quite extraordinary. Neither of us have lived through anything like this before. It's amazing. What is your sense here now?
The biggest problem with this, of course, is that we came from just like the last two cycle peaks, the 2000 peak going into '01, the 9/11 made it happen faster or the '07 going into '08, '08 banking system made it happen faster. You're coming from full employment cycle peaks and that's there's only three times in the last 20 years where we've come from there, so when I say deep Quad 4, it not only includes slowing from an industrial perspective, which we're already in a recession, in a profit perspective where S&P profits were already at 0% growth, what could possibly go wrong?
KEITH MCCULLOUGH: Well, again, I don't know, what the capacity is of the Federal Reserve and what the scope is from a legal perspective. Let's just start there. Can the Federal Reserve like the Bank of Japan start buying stocks, or start buying junk bonds for that matter? The answer is no. You're going to have to, into an election, don't forget, that's the other thing. It's the thing about cycles as you very well know. It gets the most amount of people in the wrong place at precisely the wrong time. That's where we're at.