Sun, Jun 26, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Bridgewater’s Ray Dalio bestows global economics master-class

Tuesday, September 18, 2012

Benedicte Gravrand, Opalesque Geneva: When Ray Dalio, founder and co-CIO at Bridgewater Associates, the largest hedge fund firm in the U.S., spoke at the Council on Foreign Relations recently, he reminded the audience he was not born yesterday. The 2008 crisis is just one of many, he says, even if it does not feel that way to those who encounter such an event for the first time in their life. Then he went on to describe "how the economic machine works."

The basis is in the transaction, he explains, a purchase done either with money or with credit, the latter being a liability. He believes demand is better measured in terms of spending rather than the traditional quantity of goods. Credit will count in GDP. Credit is created and this leads to cycles – not through the velocity, but "out of thin air." Buying with earnings and with credit has a positive effect (money spent is money earned) and the cycle becomes self-reinforcing. Debt rises faster than income, but cannot do so forever. Lower interest rates make credit cheaper, so purchasing is easier, and added to cash flow, it produces more wealth.

When you cannot lower interest rates any more, "that part of the cycle ends." This is when deleveraging starts; and when one can no longer rise debt relative to one’s income. This is when the cycle reverses. If debt growth moves from 10% down to 5%, this has a ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Roundup: Hedge funds shrink as liquidations outpace new launches in Q1: hedge fund news, week 27[more]

    In the week ending 17 May, 2016, HFR said hedge fund liquidations declined narrowly to begin 2016 after rising sharply to conclude 2015, as investors positioned f

  2. Europe - Hedge funds keep powder dry over big Brexit bets, Hedge funds sense profit in Europe shock waves after Brexit vote, Soros warns Brexit may cause pound plunge worse than Black Wednesday, After Brexit: What will happen if Britain votes to leave the UK?[more]

    Hedge funds keep powder dry over big Brexit bets From FT.com: Hedge funds are shying away from big bets on Brexit, with many unwilling to risk further losses having already suffered a painful first half of the year. With the outcome of a UK vote on the country’s membership of the Europea

  3. News Briefs - ’Flash Boys’ get green light to launch stock exchange, Pimco says ‘storm is brewing’ in U.S. commercial real estate, Bankers get ready to rumble at Hedge Fund Fight Night, AIMA Australia celebrates 15th anniversary[more]

    ’Flash Boys’ get green light to launch stock exchange In an investing environment ruled by fast, the newest U.S. public stock exchange is banking on slow. Well, slower. IEX Group, which won Securities and Exchange Commission approval on Friday to go head-to-head with the New York Stock E

  4. Blackstone buys minority stake in New York-based credit hedge fund Marathon[more]

    Benedicte Gravrand, Opalesque Geneva: Blackstone Strategic Capital Holdings Fund, a vehicle managed by Blackstone Alternative Asset Management (BAAM), has acquired a passive, minority interest in Marathon Asset Management, for an undisclosed sum. Based in New York,

  5. Visium hedge fund manager Sanjay Valvani found dead[more]

    Benedicte Gravrand, Opalesque London: A hedge fund manager connected with an insider trading case has apparently committed suicide. Sanjay Valvani, 44, a hedge fund manager at New York-based Visium Asset Management, was found dead in an apparent suicide on 21 June in his Brooklyn residence,