How the Economy Works by Ray Dalio

[porter]

Excellent model of the economy by the manager of the largest hedge fund on the planet:

http://www.youtube.com/watch?v=PHe0b...r_embedded#t=0


Bonus related reading:

http://www.bwater.com/Uploads/FileMa...everagings.pdf



iTulip really needs some videos like this.

[metalman]

Re: How the Economy Works by Ray Dalio

Excellent model of the economy by the manager of the largest hedge fund on the planet:

http://www.youtube.com/watch?v=PHe0b...r_embedded#t=0


Bonus related reading:

http://www.bwater.com/Uploads/FileMa...everagings.pdf



iTulip really needs some videos like this.

itulip videos... lack in slickness made up in accuracy.

[DRumsfeld2000]

Re: How the Economy Works by Ray Dalio

I notice that he does not discuss in detail what happens when governments get their QE wrong. Not a bad video, but too selective in my opinion.

[think365]

Re: How the Economy Works by Ray Dalio

Excellent model of the economy by the manager of the largest hedge fund on the planet:

http://www.youtube.com/watch?v=PHe0b...r_embedded#t=0


Bonus related reading:

http://www.bwater.com/Uploads/FileMa...everagings.pdf



iTulip really needs some videos like this.

You sure don't want to be the guy sitting on a pile of hard-earned cash or taxable assets that were productively earned and saved when Dalio orchestrates his so-called "Beautiful Deleveraging".

No matter how you spin the story, it still comes down to who should pay the bad debts of the guy in the video sitting on the couch with his beer watching the new flat screen t.v. he bought on credit he couldn't afford?

Should it be the banking system who made a fortune knowingly selling those bad loans and synthetic derivatives in the first place, or should it be the productive class who had absolutely nothing to do with those transactions and who have only borrowed money within their productive ability to pay back their debts?

Dalio makes his FIRE economy living buying and selling debt around the toxic boom/bust/leveraging/deleveraging credit cycles that irresponsible credit itself creates; and has a vested interest in keeping the party going. He makes money during the booms, and makes money during the busts; but pays nothing to repair the collateral damage caused by these unhealthy economic mood swings.

Accordingly, the "delicate balance" solution he advocates requires a big "redistribution of wealth" from the productive class (through surreptitious financial repression, high taxes on productive earnings, etc), but conspicuously leaves out any contribution by the FIRE banking system who benefits the most from these cycles and has a vested interest in seeing them continue.

This all seems like a very high cost to pay just to pull forward consumption by a few years to satiate our glutenous need for instant gratification and exorbitant privilege.

[vinoveri]

Re: How the Economy Works by Ray Dalio

Pretty succinct, but glosses over some key points. Great for a high school econ glass - but we need part 2 - "why it doesn't work perfectly: corruption, crony capitalism , the parasitic nature of the primary dealer banking cartel, regulatory capture, etc" - OK, maybe a little too much downer for a high school student.

It ignores the following:
- unlimited ability to create fiat capital by CB; monopoly of credit creation by private banks, usury: earning rent on lending money you never had
-rent extraction via regs and policy by Gov
-doesn't discuss "savings" as the origin of capital (says banks lends to credit-worthy customers- which we know is not the case, i.e., Fannie back mortgages for instance)
-assumes that all credit/debt must be "settled" is what gives rise to cycles: as we know the Fed and gov debt will never be settled - The Fed thinks it can "eliminate the business cycle"
- and of course government controlled by moneyed interest - plutocracy, etc
and on "debt restructuring" - ha ha ha - didn't mention "bailouts", responsibility, ....

Great for the half of truth which it illustrates - but needs to address "Misallocation of Capital" which seems to be an implicit assumption of the system and the resulting inevitability of ultimate deleveraging, which he says "can be beautiful" if handled right by the authorities. Dalio obviously is very supportive of current system.






Be interesting to chart the growth of credit (and when these "credit cycles" began)

[c1ue]

Re: How the Economy Works by Ray Dalio

Excellent model of the neoliberal fantasy of the economy - by the leader of one of the larger beneficiaries.

I love how everything is made simple - that's a great way to mislead people.

According to Mr. Dalio, everything is a function of:

1) Productivity Growth

The US has been experiencing quite consistent increase in productivity growth for decades. Is the economy doing well?



Notice, for example, the largest period of productivity growth in the last 10 years also accompanied the worst period of GDP growth. Epic Fail.

2) The Short term debt cycle

Ah, the bankster's view of the world introduced

3) The Long term debt cycle

The 2nd half of the bankster's view of the world.

Notice what is missing: there is no mention whatsoever of the P/C economy. Technology/Innovation. Government action. Regulatory policy. Trade. etc etc

Can anyone honestly tell me with a straight face that either the long or short term debt cycles in the US for at least the last 15 years are in any way independent? I.e. that they have functioned as an output of natural processes as opposed to the actions of the US government and Federal Reserve?

I am sure Mr. Dalio is a very smart man, but this video is thoroughly misleading and propaganda.

One of the great things about iTulip and EJ's commentary is that neither is afraid to call out these otherwise invisible actors on the economy and market.

For example: the great worldwide reflation - where EJ/iTulip showed how multiple Central Banks coordinated to reflate like mad.

To hear someone like Dalio talk about impersonal and objective forces underlying economic performance - yeah right.

[photon555]

Re: How the Economy Works by Ray Dalio

Bottom Line: the parasite extraordinaire ([welfare queen]^100) paints himself and his fellows as the apex of evolved homo financialus dragging the rest of benighted humanity into a golden future of limitless prosperity; for the values of prosperity that equate to ever expanding debt bondage for the peons/serfs/muppets/sheeple.

"Banking and Politics were invented so that weak, incompetent, cowardly men could have access to women, money, and power." Jehu Galt

[gwynedd1]

Re: How the Economy Works by Ray Dalio

We don't need to build on the assumptions. We need to revisit the assumptions because many of them are wrong, and some very basic ones at that.