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Pragmatic Capitalism

Practical Views on Money & Finance

Ray Dalio on 2013: Increasingly Bearish Outlook

Interesting comments here from Ray Dalio at the Dealbook conference.  This the is first glimpse at the fund manager’s 2013 outlook.  Business Insider has provided a nice summary:

  • 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.

Read more here.

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Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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