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View Full Version : Ray Dalio explains "D-Process": Sound familiar?



redshark
03-26-09, 01:49 AM
This is a good article on one of the best hedge fund managers around. He also sums up our current situation nicely in the paragraph below.

(Down several paragraphs, he says)

"Most people, says Dalio, think that a depression is simply a really, really bad recession. But in reality, the two are distinct, naturally occurring events. A recession is a contraction in real GDP brought on by a central bank tightening monetary policy, usually to control inflation, and ends when the central bank eases. But a D-process occurs when an economy has an unsustainably high debt burden and monetary policy ceases to be effective, usually because interest rates are close to zero, and the central bank has no way to stimulate the economy. To compensate, the value of debt must be written down (risking deflation) or the central bank must print money (a trigger of inflation), or some combination of both."

Here's the link:
http://biz.yahoo.com/hftn/090319/031809_okeefe_bridgewater_fortune.html?&.pf=retirement

Sounds like he's done his homework

metalman
03-26-09, 01:52 AM
This is a good article on one of the best hedge fund managers around. He also sums up our current situation nicely in the paragraph below.

(Down several paragraphs, he says)

"Most people, says Dalio, think that a depression is simply a really, really bad recession. But in reality, the two are distinct, naturally occurring events. A recession is a contraction in real GDP brought on by a central bank tightening monetary policy, usually to control inflation, and ends when the central bank eases. But a D-process occurs when an economy has an unsustainably high debt burden and monetary policy ceases to be effective, usually because interest rates are close to zero, and the central bank has no way to stimulate the economy. To compensate, the value of debt must be written down (risking deflation) or the central bank must print money (a trigger of inflation), or some combination of both."

Here's the link:
http://biz.yahoo.com/hftn/090319/031809_okeefe_bridgewater_fortune.html?&.pf=retirement

Sounds like he's done his homework

nice analysis... ten years late.

if this is what passes for 'doing your homework' as a hedge fund manager, i'll stick with the tulip.

GRG55
03-26-09, 11:11 AM
nice analysis... ten years late.

if this is what passes for 'doing your homework' as a hedge fund manager, i'll stick with the tulip.

Actually I think he's willing to go public only now because it's happening. Years ago Bridgewater blocked public access to Dalio's insightful writings and restricted them to clients only.

I think a lot of perceptive people avoided talking publicly about what they saw coming down for the reasons EJ has explained...you come across as a doomer, your friends cross the street when they see you coming, your family try to convince the neighbours you're a tenant instead of a relative, your mother-in-law gets on her daughter's case about her lack of good judgement, nobody invites you to parties, your dog growls when you arrive home, and your budgie bites you.

Not much of a life, eh...:p

jk
03-26-09, 12:37 PM
This is a good article on one of the best hedge fund managers around. He also sums up our current situation nicely in the paragraph below.

(Down several paragraphs, he says)

"Most people, says Dalio, think that a depression is simply a really, really bad recession. But in reality, the two are distinct, naturally occurring events. A recession is a contraction in real GDP brought on by a central bank tightening monetary policy, usually to control inflation, and ends when the central bank eases. But a D-process occurs when an economy has an unsustainably high debt burden and monetary policy ceases to be effective, usually because interest rates are close to zero, and the central bank has no way to stimulate the economy. To compensate, the value of debt must be written down (risking deflation) or the central bank must print money (a trigger of inflation), or some combination of both."

Here's the link:
http://biz.yahoo.com/hftn/090319/031809_okeefe_bridgewater_fortune.html?&.pf=retirement

Sounds like he's done his homework

check out http://itulip.com/forums/showthread.php?t=7902

goadam1
03-26-09, 05:05 PM
nice analysis... ten years late.

if this is what passes for 'doing your homework' as a hedge fund manager, i'll stick with the tulip.

No 2/20 fee on itulip.