Ray Dalio’s Full Discussion at the DealBook Conference

Here’s the video from yesterday’s DealBook Conference.  I’ll repost the summary.  Video is attached below.

  • Yields can’t go down anymore.
  • Austerity is coming.
  • Economy is running out of steam.
  • QE is losing its efficacy.
  • Rate turn probably finally coming late in 2013.
  • The world is still in deleveraging.
  • Sounding bearish: Risk premiums are likely to expand.
  • It all comes down to interest rates. As an investor, all you’re doing is putting up a lump-sump payment for a future cash flow.
  • In all deleveraging, you get through them by having an interest rate that’s lower than the growth rate.
  • The big question is: When will the term structure of interest rates change? That’s the question to be worried about.
  • Effects of QE diminishing as we do more rounds.. We’re facing austerity. And growth is flagging. This is an unprecedented risk the economy is facing. A slowdown with very little room to maneuver.
  • The yield curve is certainly at the bottom. And so we’re squeezed on where they’ve gotten us in terms of.

 

dealbook on livestream.com. Broadcast Live Free

Source: Dealbook via ValueWalk

 

 

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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Comments

  1. Interesting. I disagree with a couple of his points (note, I didn’t read the speech, I’m just going on the bullet points above). First, the yield curve can go lower long-term. Not saying that it will, but it can. See Japan. Second, QE2 and 3 are just starting to work (QE1 worked right away): as investors get sick of no returns, they are finally putting money into real estate which was the Fed’s goal all along. It took 3.5 years but investors are finally figuring this out.

  2. Thanks for posting this. How can an ordinary investor take positions when interests rate turn? Is there a way possible other than shorting/to short the bonds for retail investors?