Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
Speaker 1: Dear Lord, I have an extra special guest. His name
Speaker 1: is Ray Dalio. I could have sat and chat with
Speaker 1: Ray for hours and hours. His newest book is Principles
Speaker 1: for Navigating Big Debt Crisis, and it is a masterful
Speaker 1: three volume set on what the debt crises around the
Speaker 1: world look like throughout history. He does detailed case stories
Speaker 1: about three of the biggest ones, the Great Financial Crisis
Speaker 1: of oid O nine, the Great Depression, and then what
Speaker 1: took place in Germany. And then there are forty eight
Speaker 1: case studies or forty six case studies about other debt crises.
Speaker 1: He really provides an education for central banks going forward
Speaker 1: as to what they need to do to avoid these
Speaker 1: sorts of problems in the future, and when they happen,
Speaker 1: how to make them less painful. It's a master work
Speaker 1: and I expect it's gonna be on central bank bookshelves
Speaker 1: for decades and decades to come. This is would also
Speaker 1: be a good time to mention we have coming up
Speaker 1: Masters in Business Live with Ray Dalio. Uh and keep
Speaker 1: your ears open for that. We're gonna do a live
Speaker 1: broadcast going over the book. You could get the PDF
Speaker 1: of the book for free. The Kindle version is fifteen
Speaker 1: dollars in this behemoth is about fifty bucks, So free pdf.
Speaker 1: It's hard to argue with that. With no further ado,
Speaker 1: my conversation with Ray Dalio. My extra special guest this
Speaker 1: week is Ray Dalio, founder of Bridgewater Associates out of
Speaker 1: his apartment over forty years ago. He is presently co
Speaker 1: chairman and co c i O of the firm, which
Speaker 1: manages a hundred and sixty billion dollars in assets. Bridgewater
Speaker 1: perhaps has made more money for clients than any other
Speaker 1: hedge fund in history. Rather than waste a lot of
Speaker 1: time with the introduction, I just want to say, Ray Dalio,
Speaker 1: welcome back to Bloomberg. Thanks for having me back. Before
Speaker 1: we get to the new book. Last year, you were
Speaker 1: here right after Principles came out, and knowing how you
Speaker 1: look at the world as a giant experimental learning opportunity.
Speaker 1: What did you learn on the tour to promote the book?
Speaker 1: I was I was surprised at how curious and interactive
Speaker 1: people were. Um, I went on social media and that's
Speaker 1: a place that I thought I'd never go on. And
Speaker 1: uh and I thought probably was a snarky place and
Speaker 1: a little um hasn't been for me. You know, there
Speaker 1: are a lot of curious people out there were eager
Speaker 1: to learn, and I'm good people. I'm having great conversations
Speaker 1: with them back and forth. Uh take a little bit
Speaker 1: of time to do it. And uh so I was
Speaker 1: most surprised about those things you embrace as part of
Speaker 1: your process, both radical transparency and a pure meritocracy. If
Speaker 1: someone has a good idea, it doesn't matter where it
Speaker 1: comes from. Well, the markets teach you humility. You know,
Speaker 1: you're never a dent, you're being right in any way.
Speaker 1: And so that what that taught me is that I
Speaker 1: love to have my views challenged and so to learn
Speaker 1: the art of thoughtful disagreement. That's not a fight, it's
Speaker 1: a curiosity experience. That's a great phrase, the art of
Speaker 1: thoughtful disagreement. So now you write a second book, I
Speaker 1: have to ask you go sixty years without ever writing
Speaker 1: a book, and then you put out to really, this
Speaker 1: is a really substantive book in three years. What what
Speaker 1: is the hurry? What's the rush to get all this
Speaker 1: writing done so quickly? Well, like my other book, a
Speaker 1: lot of the principles that I had in this book
Speaker 1: were written over a long period of time, a lot
Speaker 1: of the research, and then I was asked by a
Speaker 1: number of policy makers on others UH to write this
Speaker 1: book on for the tenth anniversary of the financial crisis,
Speaker 1: because um, they said that there's no book that you
Speaker 1: can go to that really gives the lesson that happen
Speaker 1: over and over again. Now other words, we're going to
Speaker 1: focus a lot on the two thousand and eight financial crisis,
Speaker 1: and that's good, but um, it's like looking at one
Speaker 1: case of a disease. If you really want to understand
Speaker 1: that how the disease transpires, you have to see pretty
Speaker 1: much them all and then understand how they work on
Speaker 1: average and how they deviate. And that was the purpose
Speaker 1: of the book. So the timing was the big thing,
Speaker 1: and then a shove from other people. You don't want
Speaker 1: to get too lost in the weeds on any one
Speaker 1: particular financial disaster. What we're trying to find is the
Speaker 1: consistent thread, the best ways to respond to them, the
Speaker 1: best ways to manage them, and even heaven forbid, possibly
Speaker 1: avoiding them in the future. Statement. Yeah, well, let me
Speaker 1: give you an example in this particular financial crisis, a
Speaker 1: lot hinged on bank capital. No other words, how he
Speaker 1: rectified bank capital, liquidity and how much well capital capital.
Speaker 1: Liquidity is different from capital, but so in other words, basically,
Speaker 1: capital is on your income statement, what your balance sheet
Speaker 1: look like. Okay, are you out of money? Then you
Speaker 1: get shut down. Liquidity is the money that comes in.
Speaker 1: You can have no bank capital and plenty of liquidity
Speaker 1: and be fine if they don't have marked the market accounting.
Speaker 1: So like by going through the crisis, which by most
Speaker 1: measures was of severe or comparable severity in terms of that,
Speaker 1: one of the big differences was they didn't have marked
Speaker 1: the market accounting. So because they didn't have marked the
Speaker 1: market accounting, the solvency issue wasn't as big a deal
Speaker 1: because they didn't account for it as being insolved where
Speaker 1: the liquidity issue was. So my point is that when
Speaker 1: you go from one to the other, you start to
Speaker 1: understand what levers and what patches. So the whole notion
Speaker 1: is look at the one on average, what's the typical one,
Speaker 1: and then look at the deviations and see what causes them,
Speaker 1: and then you understand how these things work. And that's
Speaker 1: what the books about. So when we look at the
Speaker 1: oh you don't crisis. We see most of the banks
Speaker 1: had a lot of capital, but they also had a
Speaker 1: ton of assets leveraged on top of the capital. How
Speaker 1: significant is that leverage ratio of of capital to additional
Speaker 1: leveraged assets. Well, it tells you how much of a
Speaker 1: downward movement in the assets you can take. Right. If
Speaker 1: it's if it's a bank is leverage ten to one
Speaker 1: and the average assets go down ten percent, you're out
Speaker 1: of money. Right, that's the counting. And and if you
Speaker 1: don't account for that like that period of time, you
Speaker 1: don't count for that exactly that way, you treat them differently,
Speaker 1: then you're really dealing with a liquidity case. But these
Speaker 1: things happen over and over again. The same basic structure
Speaker 1: happens over and over again. And I thought it was
Speaker 1: really really important to have a book that shows what
Speaker 1: that classic diseases, like, how it works one thing leads
Speaker 1: to another in a certain way, and then to show
Speaker 1: all of the cases. So it shows all forty eight
Speaker 1: cases of bad debt crisis is over the last hundred years,
Speaker 1: and you can go into them see them one by one,
Speaker 1: and then it takes you through three classic ones in
Speaker 1: detail takes you through them pretty much almost day by day,
Speaker 1: so you can viscerally feel what they were like, and
Speaker 1: you could almost imagine what you would do on that day.
Speaker 1: Um it starts with the it does it in the
Speaker 1: sequential order. So in the nineteen twenties the inflationary depression
Speaker 1: um of Germany's Weimar Republic. And the reason I put
Speaker 1: that in is because depressions can be inflationary or deflationary,
Speaker 1: and in order to understand what makes the difference, what
Speaker 1: makes them inflationary versus deflationary, wanted to put that in.
Speaker 1: But the sequence is similar. Then then we go that's
Speaker 1: the end of World War One and the period in
Speaker 1: between that's interesting, and then we go to the after
Speaker 1: World More one. We had the twenties, and with that
Speaker 1: we had the set up for the ninet thirties Great Depression.
Speaker 1: I love the way you structured this three segments. One
Speaker 1: is the archetypical debt cycle. The next is some detailed
Speaker 1: case studies. And you look at the Great Depression, you
Speaker 1: look at the Weinmar public, you look at a way
Speaker 1: A nine, and then you come up with forty eight
Speaker 1: additional case studies. Each of these are a different volume
Speaker 1: in what effectively is a three volume set, tell us
Speaker 1: the thinking about this, and and tell us about the
Speaker 1: feedback you've gotten from people who had to manage the
Speaker 1: oh eight or nine crisis. Well, I believe the same
Speaker 1: things happened over and over again. And it's like a disease.
Speaker 1: If you don't watch all the cases you want to
Speaker 1: understand them. That's kind of like doctors in emergency room.
Speaker 1: They do a twenty four hour shift just so they
Speaker 1: can see the disease run its full course over and
Speaker 1: over again, over and over again, right, and then you
Speaker 1: make the connections. You know how these things work because
Speaker 1: they're classic. They all happen basically in the same way.
Speaker 1: So that's that's what I did. That's why I put
Speaker 1: all of those case studies in there as a backdrop,
Speaker 1: and then I put the template the templates. Just sixty pages.
Speaker 1: You read it, you get the template. Um, yeah, no, no,
Speaker 1: the people, Ben Bernankee said, Ray Dali's book is the
Speaker 1: most read uh as I must read for anyone who
Speaker 1: aspires to prevent or manage the next financial crisis. Larry
Speaker 1: Summers said, a terrific piece of work by one of
Speaker 1: the world's top investors who has devoted his life to
Speaker 1: understanding the markets and demonstrating that understanding by navigating the
Speaker 1: two thousand eight financial crisis. Um Tim Geitner said, it's
Speaker 1: an outstanding history of the financial crisis, including the devastating
Speaker 1: crisis of two thousand eight. That's an amazing list of
Speaker 1: people who were actually actually there and and running this.
Speaker 1: And Hank Poulson is another person who had some comments
Speaker 1: in any way they I think it's um. I think
Speaker 1: it's accur it. And the most important thing isn't the book.
Speaker 1: The most important thing that I'm really trying to get
Speaker 1: at is the mechanics of the disease has described here.
Speaker 1: Because if we can just understand and agree on the
Speaker 1: mechanics of these things, we make a giant leap forward.
Speaker 1: A lot of the mechanics are not agreed to, and
Speaker 1: they're not studied. They don't look at cases. For example,
Speaker 1: at the time, there was a lot of argument that
Speaker 1: printing money would bring back right, but which which showed
Speaker 1: a fundamental misunderstanding of what showed a fundamental misunderstanding because
Speaker 1: when when more money comes into the system at the
Speaker 1: same time as credit is contracting, the actual amount of
Speaker 1: purchasing power is not rising, and so what causes inflation
Speaker 1: is when more money is spent than goods and services
Speaker 1: are produced. Okay, And what's happening at these times is
Speaker 1: that money creation is making up for the contraction and credit.
Speaker 1: So you're you're jumping ahead to the beautiful deleveraging. Let's
Speaker 1: go through the six steps as you outlined in the book,
Speaker 1: and just a quick overview the early part of the cycle,
Speaker 1: the bubble, the top, the depression, the beautiful deleveraging, the
Speaker 1: pushing on a string, and then normalization is did I
Speaker 1: get that more or less right? That's right and um,
Speaker 1: And basically most cycles work the same way, but there's
Speaker 1: when you hit a zero interest rate, then you have
Speaker 1: the big one. Okay. So what happens is in the
Speaker 1: early part of a cycle, uh, the amount of lending
Speaker 1: that takes place produces a cash flow which is greater
Speaker 1: than the debt service payments on that that's a virtuous
Speaker 1: lending because credit gives buying power and depending on how
Speaker 1: you're using that buying power for using it to create
Speaker 1: income that's greater than the debt service payments. Is a
Speaker 1: self reinforcing positive cycle that normally happens in the early
Speaker 1: part of the cycle. Then it pushes asset prices up.
Speaker 1: And what happens is that people start to extrapolate those
Speaker 1: things going forward, so as the debts continue to rise,
Speaker 1: and they believe this is going to go higher and higher.
Speaker 1: In other words, the belief in um, the miracle of
Speaker 1: the new thing, and maybe the miracle of the the
Speaker 1: new Amazon or the new Tesla, or it's the nifty
Speaker 1: fifty in other years, in other words, that of the world,
Speaker 1: and that there's not careful calculation in terms of what
Speaker 1: could be paid back. We start to get into the
Speaker 1: bubble stage. The bubble stage is also um accompanied by
Speaker 1: a shadow The development of shadow banking is that consistent
Speaker 1: always always. We saw shadow banking very much in O eight,
Speaker 1: o nine. I was not aware until I plowed through
Speaker 1: this that there was a shadow banking system. Uh in
Speaker 1: the Great Depression. There was a shadow banking system repeatedly
Speaker 1: throughout history, repeatedly throughout history. The way it works is
Speaker 1: the banks are regulated and they're controlled, and they're safe
Speaker 1: and they're overseen. But there are innovations that come outside
Speaker 1: of the banking system. For there's a shadow banking system.
Speaker 1: Now you know, in other words, private lending that takes
Speaker 1: place out of the side of the banking system in
Speaker 1: various ways, and it's not regulated, and there's an incentive
Speaker 1: to go outside the banking system because the banking system
Speaker 1: being regulated and being controlled can't make as much money
Speaker 1: as going outside the banking system. Safer but capped right,
Speaker 1: watched over um. But you know, not necessarily totally say,
Speaker 1: but you always have the going out to that, and
Speaker 1: you always have the development of new vehicles, always new vehicles,
Speaker 1: and they grow in a very fast way. Doesn't mean
Speaker 1: they're not healthy, but they grow in a very fast way.
Speaker 1: And you see a growth in that in lending that
Speaker 1: becomes an unsustainable growth rate that feeds on itself because
Speaker 1: the middlemen make money on making these kinds of loads. Um,
Speaker 1: those who are buying them have them go up in value,
Speaker 1: and everybody is happy at that point. What we always
Speaker 1: try to do is do the pro form of financial statements,
Speaker 1: in other words, how much cash is going to come
Speaker 1: in and come and you don't have uh, you have
Speaker 1: a problem. And there's the lending of seeds, the ability
Speaker 1: to services that's right. And in addition, you come to
Speaker 1: the late part of the cycle. You know, when there's
Speaker 1: not much capacity to grow as fast, but the markets
Speaker 1: continue to discount a fast growth rate. The funny thing
Speaker 1: about markets is that they discount what they've experienced more
Speaker 1: than what's likely. Like you would imagine when an economy
Speaker 1: is really depressed that buying large that they would discount
Speaker 1: that it would be pick up because it's at the
Speaker 1: low part of the cycle, or when when you run
Speaker 1: into the late part of the cycle, they would say
Speaker 1: it can't sustain that particular growth rate. And they certainly
Speaker 1: can't sustain that growth rate on a lot of debt,
Speaker 1: But yet the their price to discount that, And so
Speaker 1: the the irony is asset prices are higher. There's much
Speaker 1: more leverage in the mark in the system. And so
Speaker 1: why would asset prices be higher or credit spreads be
Speaker 1: lower when there's a lot more leverage in the price
Speaker 1: of everything is higher. Doesn't make sense, But that's where
Speaker 1: the bubble is. These are the good times, these are
Speaker 1: the great times, it seems right. So so then you
Speaker 1: get the top and then bang, the next stop is depression. Well,
Speaker 1: most typically then the top. The top usually comes through
Speaker 1: a combination of a tightening of monetary policy because you're
Speaker 1: later in the cycle. Are the central bankers historically always
Speaker 1: late to the party. Is there anything they could do
Speaker 1: to sort of slow it down in real time or
Speaker 1: has history shown own they always are are at a
Speaker 1: step History is shown that they're pretty much always allowing
Speaker 1: the rate of growth to be rate faster than the
Speaker 1: rate of capacity to produce. And so we see a
Speaker 1: shrinking labor force. We excess labor, we see as shrinking
Speaker 1: utilization of excess utilization of capacity. You see those types
Speaker 1: of things that to put on the brakes enough ahead
Speaker 1: of the capacity limitations. Um, you know, hardly ever takes place.
Speaker 1: They can't, they don't get it right, and and that's
Speaker 1: partially related to this economy, but it's also partially related
Speaker 1: to the asset prices. The asset prices go first before
Speaker 1: the economy goes, so private equity competes with public equity
Speaker 1: and everything, and so you like in this cycle, you've
Speaker 1: seen those asset prices go down and projected returns of
Speaker 1: all those assets prices go lower. You see the duration
Speaker 1: of the assets length and duration means also price sensitive.
Speaker 1: A lacing um longer bo more sensitive than the product
Speaker 1: to the movement of interest rates. So the interest rate UM,
Speaker 1: so as it's become more sensitive, and then what happens
Speaker 1: is classically you have enough of a tightening um to
Speaker 1: create the crack that usually also happens when they cash
Speaker 1: flow is not in um, not positioned because there's too
Speaker 1: much debt relative to the cash flow, and it starts
Speaker 1: in the periphery of the credit markets, and then it
Speaker 1: works itself down through that. So sorry, you're suggesting it
Speaker 1: starts in the shadow banking market and then works its
Speaker 1: way into the mainstream, so you get colts. So what
Speaker 1: we saw, no, you know, nine these non bank lenders,
Speaker 1: the model was uh underwrite mortgages to sell to securitizers.
Speaker 1: They started going belly up in pretty big numbers in
Speaker 1: oh six, oh seven, long before you saw any problems
Speaker 1: with with the big banks. That that's typical of all
Speaker 1: these cycles because at the periphery there's more aggressive lending.
Speaker 1: It's unregulated the leverage, right, I think about the investment
Speaker 1: banks being more leveraged than the traditional banks. By way
Speaker 1: of example, traditional banks are all part of the party.
Speaker 1: I mean, it's it's the same thing now, every everybody
Speaker 1: is in the same hot up together. All of these cycles,
Speaker 1: the upward cycle is self reinforcing. So let's let's get
Speaker 1: to the I want to jump to the beautiful deleveraging,
Speaker 1: which is your phrase, which I've always found to be
Speaker 1: somewhat of a romantic phrase about something that's a fairly
Speaker 1: dry economic process. Tell us about the beautiful deleveraging post
Speaker 1: O eight o nine And in previous cycles, well, um,
Speaker 1: in a normal cycle, when you have the downward move
Speaker 1: to get it reef moving on the positive side, they
Speaker 1: get the good cycle going. You lower interest rates enough
Speaker 1: so that the present value discount rate for asset prices
Speaker 1: goes up. You may a um it cheaper to have
Speaker 1: new borrow because the monthly payments are less because of
Speaker 1: the interest rate is less. You and you make everybody richer.
Speaker 1: That's how the cycle goes. And that seems to have
Speaker 1: happened posted eight o nine. Yes, it happens in all
Speaker 1: these cycles. That's the normal way to happen. But what's
Speaker 1: different about the eight oh nine, which is the same
Speaker 1: as the nine team to thirty two period, is interest rates.
Speaker 1: It's zero. When interest rates it's zero, the game changes, okay,
Speaker 1: because monetary policy cannot operate that way. And so two
Speaker 1: times that century, that happened. And that's when century or
Speaker 1: or century, that's the that's the time it happened. And
Speaker 1: then what that means is the game changes. And the
Speaker 1: game then has to be that you print money and
Speaker 1: you buy financial asset central banks you got to do
Speaker 1: that ZERP and KWI. Yeah, and that they do that
Speaker 1: all over the world. And in that since then, they built, uh,
Speaker 1: they brought about sixteen trillion dollars. Central banks have bought
Speaker 1: about sixteen trillion dollars, put about sixteen trillion dollars of
Speaker 1: liquidity out in the system in financial markets, and that
Speaker 1: causes financial markets to go up and produces plenty of
Speaker 1: liquidity in the um. In that crisis, they also guaranteed
Speaker 1: about two thirds of all of the debt in the
Speaker 1: United States. And that's that's just an astonishing figure. You've
Speaker 1: been using nineteen thirty seven as the parallel for today.
Speaker 1: Nineteen thirty seven was kind of a scary time in history.
Speaker 1: It was before the rise of Nazism, was before World
Speaker 1: War two. A lot of bad things were going on
Speaker 1: in nineteen thirty seven. Why do you draw that that parallel, Well,
Speaker 1: I think things happening. There's a list of things happening
Speaker 1: in nineteen thirty two, nine nine, nineteen thirty two as
Speaker 1: in two thousand and eight to two thousand nine UM,
Speaker 1: there was a debt crisis and that UM where an
Speaker 1: interest rates at zero and central banks had to print
Speaker 1: a lot of money to buy a lot of financial assets,
Speaker 1: which produced UM big rallies in the stock market and
Speaker 1: a big pickup in economic activity. And in seven the
Speaker 1: federal reserves started to tighten monetary policy of law, and
Speaker 1: there was an interest rate sensitivity associated with that. Was
Speaker 1: it premature UM, It's not so much premature as much
Speaker 1: as highly impactful in my opinion, maybe a bit of both, UM.
Speaker 1: But the point at that time is that in doing that,
Speaker 1: that contributed to the wealth gap, because financial assets are
Speaker 1: owned by people who have financials and poor people don't
Speaker 1: have that, and to produced a wealth gap in which UM,
Speaker 1: like now, the top intent of one percent of the
Speaker 1: population's net woralth is equal to the bottom combined. So
Speaker 1: so there was a there was a giant wealth gap.
Speaker 1: And at that time there's tension between the left and
Speaker 1: the right, and this is true in all countries around
Speaker 1: the world, and so we have the emergence of populism
Speaker 1: now four countries decided to go from democracies to dictatorships.
Speaker 1: That happened in Italy, feet and then it happened in Germany,
Speaker 1: it happened in Japan, it happened in Spain, and that
Speaker 1: that tension produced tension inside the country and tension outside
Speaker 1: the country, and it produced a certain type of leader,
Speaker 1: which was a populist leader. So we have populism in
Speaker 1: other words, of gap there that I think is very
Speaker 1: important to understand. Politics now is more important than at
Speaker 1: any time in my lifetime. And I've been doing this
Speaker 1: for fifty years. So what are we seeing in today's
Speaker 1: today's um worlds of politics between the rise of Trump
Speaker 1: is m and what we've seen in the Philippines and
Speaker 1: and Britain and Brexit. Are you saying, hey, your world
Speaker 1: post crisis is now dealing with a very similar ninety
Speaker 1: seven UH form of popularism and leading to dictatorship. Populism
Speaker 1: is um when a strong individual is brought in by
Speaker 1: a segment disenfranchised segment of the population, partially because of
Speaker 1: the economics, partially because of a sense that their culture
Speaker 1: is being threatened and that there are it's anti elites,
Speaker 1: and it is nationalistic it is protectionistic and is military istic,
Speaker 1: and the populist has a fighter mentality. So that's that's
Speaker 1: what populace. That's every financial crisis, it's the same thing.
Speaker 1: Well in the big ones. In the big ones, you
Speaker 1: tend to get that polarity. So we have a situation
Speaker 1: that's like that. I think everybody would agree that the
Speaker 1: nature of the situation is like that. It's producing more
Speaker 1: domestic conflict around that UM the the right becomes more
Speaker 1: right and the left becomes more right left, and then
Speaker 1: also more international conflict. Another key element here in the
Speaker 1: thirties which were not used to is that you have
Speaker 1: a rise of a country to of existing power, to
Speaker 1: have challenged the exist the existing power rise of a
Speaker 1: new country. That was that was Japan versus the Europeans,
Speaker 1: or Japan versus the US, and the Japan versus the
Speaker 1: European powers that had colonies in the Pacific area. A
Speaker 1: lot of them had colonies that and the United States
Speaker 1: UM had interest there where they were competing for natural resources.
Speaker 1: And so when UM Japan, then UM had its economic
Speaker 1: problems and wanted to grow. It needed resources to beyond
Speaker 1: Japan because Japan has very limited resources, so it goes
Speaker 1: into takes over man Choria, northern China. There is that competition.
Speaker 1: So now we're worried about resources and we start to
Speaker 1: put in you know, blockades and things. And then when
Speaker 1: World War two begins to break out, really nine, so
Speaker 1: we have the same phenomenon happening in Europe, where the
Speaker 1: rising power was Germany. It was hobbled at the end
Speaker 1: of World War One, hobbled and humiliated, and as a
Speaker 1: result of that, it became stronger, and it became strong
Speaker 1: relative to the existing powers, and that was particularly the
Speaker 1: UK and France. And as a result, we had UM
Speaker 1: that conflict, that that type of conflict, and over the
Speaker 1: period of time, it first started economically, like in Japan,
Speaker 1: they UM, we would put sanctions in place, and eventually
Speaker 1: when it got um more serious, then Japan took advantage
Speaker 1: of that because they couldn't those colonies couldn't defend themselves
Speaker 1: in Asia, and so they invaded those areas and so
Speaker 1: expanding to also get materials, rubbers and things like that.
Speaker 1: And then UM we had then embargo their assets and
Speaker 1: then eventually we embargo their oil and that led UM
Speaker 1: to Pearl Harbor. So thirty nine was war in Europe
Speaker 1: and forty one was um Pearl Harbor, and in the
Speaker 1: beginning of that, I'm not saying we're going down that
Speaker 1: path along those lines, but I'm saying, let's say key points. Okay, first,
Speaker 1: you're you're later in a short term debt cycles. So
Speaker 1: there are two debt cycles. I'm referring to. One is
Speaker 1: the short term debt cycle. I think we're acquainted with that.
Speaker 1: That's a business cycle. You have recessions, economy gross because
Speaker 1: of stimulations, you run out of capacity, central bank titan
Speaker 1: monetary policy, markets start to decline, then the economy declines,
Speaker 1: and then you have a session and you do that
Speaker 1: over and over again. Those things are usually you know,
Speaker 1: maybe ten years in that facility, a little less. Then
Speaker 1: you have a long term debt cycle. And the long
Speaker 1: term debt cycle is um the accumulation of those short
Speaker 1: term debt cycle, but it kind of reaches its end
Speaker 1: when first interest rates at zero because you can't puff
Speaker 1: things up with interest rate declines anymore. And then you
Speaker 1: have QUI, which is then the purchase of those assets
Speaker 1: to cause those prices to rise a lot. And with
Speaker 1: those asset prices rising a lot, you can't From that
Speaker 1: point have the same impact. I want to emphasize, UM,
Speaker 1: that's the pushing on the string. That's the pushing that's
Speaker 1: that's the pushing on a string phase, which is a
Speaker 1: wonderful metaphor. You try and do something and nothing happens.
Speaker 1: You push on it, it doesn't go into the system.
Speaker 1: And so UM, just let's take a moment here and realize, UM,
Speaker 1: that we have a system in which demand is produced
Speaker 1: by credit and that UM most people are long in
Speaker 1: other words, and their leverage law. UM. So the balance
Speaker 1: that you're looking for a healthy economy to obtain is
Speaker 1: sufficient credit consumption so that consumers are out buying, businesses
Speaker 1: are expanding, but not such reckless issuance of credit that
Speaker 1: things go haywire and you get the bubble and then
Speaker 1: debt cycle that leads to a giant collapse. How do
Speaker 1: you get that balance? Can? Um? Is debt rising faster
Speaker 1: than the income to service it, that's a bad sign.
Speaker 1: There maybe a lead lad but at the end of
Speaker 1: the day, it has to rise there UM, So that
Speaker 1: you have UM debt being that service payments growing faster
Speaker 1: than the actual excuse me, the income growing faster than
Speaker 1: the debt service payments. So you're gonna need that growing
Speaker 1: faster than you could service stuff. That's that's good. That's
Speaker 1: that's a good economy. That's the way the capital markets
Speaker 1: should work. So when you have debt growing faster than
Speaker 1: the debt service payments, that's unsustainable. And at some point
Speaker 1: that stops and you lose that demand. So that's point one.
Speaker 1: Point two is what is the power of the central
Speaker 1: bank to keep that thing going to in other words,
Speaker 1: repair that situation by lowering interest rates or buying assets
Speaker 1: to produce liquidity in the system, to build it up,
Speaker 1: because a debt is a promise to deliver cash, and
Speaker 1: when they put money into the system, it makes it
Speaker 1: easier to service that debt. It lowers interest rates, causes
Speaker 1: set prices. So what is the capacity of the central
Speaker 1: bank when we get into serious problems, really serious problems.
Speaker 1: We have a situation in which we can't service that debt,
Speaker 1: and we're in a situation where the central bank policies
Speaker 1: aren't are not as powerful because either interest rates are
Speaker 1: close to zero or the power of quantitative easing has
Speaker 1: largely been used up because that balloon has been expanded,
Speaker 1: and also what you can buy is limited. So that's
Speaker 1: when you're at more at the end of the longer
Speaker 1: term debt cycle, I wanna I want to ask you
Speaker 1: about the current circumstances. Can you stick around a little bit.
Speaker 1: We are tumbl questions we've been speaking with Ray Dalio.
Speaker 1: If you enjoy this conversation, be sure and check out
Speaker 1: the podcast extras, where we keep the tape rolling and
Speaker 1: continue discussing all things debt crisis. You can find that
Speaker 1: at Apple iTunes, Bloomberg dot com, Stitcher, overcast, wherever your
Speaker 1: finer podcasts are sold. We love your comments, feedback and
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Speaker 1: rit Holts. You could follow Ray on Twitter at Ray Dalio.
Speaker 1: I'm Barry Ritolts. You're listening to Masters in Business on
Speaker 1: Bloomberg Radio. Welcome to the podcast, Ray, Thank you so
Speaker 1: much for doing this. I've been looking forward to following
Speaker 1: up with you since our last conversation, and I have
Speaker 1: so many questions we did not get to before we
Speaker 1: move away from big debt crises. I just have to
Speaker 1: ask you here it is. It's has anybody learned anything
Speaker 1: about financial crisis? Do you think we're better prepared next time?
Speaker 1: Or are we gonna get tenue to make the exact
Speaker 1: same mistakes over and over again. We've learned some things,
Speaker 1: but not enough things. I think that I think people
Speaker 1: more cautious, cash is higher, the lending is different. Um,
Speaker 1: I think the banks have more capital. Uh, those things
Speaker 1: are good. I think we also, I think may put
Speaker 1: some regulations in place that limit the policy makers flexibilities
Speaker 1: to be able to deal with things. I think every
Speaker 1: crisis is a bit different, and you can't write the
Speaker 1: rules so precisely that you can deal with it anyway.
Speaker 1: I don't think we've materially changed those things. If I'm
Speaker 1: looking forward, I would say when we do our financial
Speaker 1: numbers pro forma, generally speaking, there's much less of a
Speaker 1: bubble around. Back in two thousand seven, when we did
Speaker 1: those numbers, we could see that a lot of debt
Speaker 1: problems and a debt crisis was going to come. So
Speaker 1: how do you contextualize something like the student debt crisis
Speaker 1: which is at all time highs or is that not
Speaker 1: the sort of bubble that leads to a systemic issue. Well,
Speaker 1: what we do is we look at each of the
Speaker 1: different types. There are parts here that look like bubbles
Speaker 1: to us, and the question is what is how big
Speaker 1: are they and what are the contagious and so um
Speaker 1: you're so methodical, you really you bring an engineer's approach
Speaker 1: to this. It's the economic machine, which you've described previously.
Speaker 1: But even when looking at a specific type of debt,
Speaker 1: you want to know exactly how problematic it is and
Speaker 1: is it something that's contained within its own silo or
Speaker 1: does it have the ability to infect the whole system?
Speaker 1: Where you need to do that and not just the
Speaker 1: you know, you have to be granular as well as
Speaker 1: a big picture. So yeah, that's what we do. And
Speaker 1: so when we go that, I think the biggest risks
Speaker 1: that we see are the corporate market has increased a lot.
Speaker 1: There's been a lot of funding to um private equity
Speaker 1: firms and so on. Um is that a good thing
Speaker 1: or a bad thing? Well, funding is good. It depends
Speaker 1: on whether that debt is producing the cash flows and
Speaker 1: and and so on. If you have a decline in earnings,
Speaker 1: which will come from the next recession, fair much fair
Speaker 1: amount of that debt um will be stress tested and
Speaker 1: they'll be issues pertaining to that. And then the other
Speaker 1: UM particular imbalance that we see is the amount of
Speaker 1: sales that the U. S. Treasury is going to have
Speaker 1: to make. And so when we look about what those
Speaker 1: numbers will be, particularly after the stimulus starts to taper off,
Speaker 1: we have we've had a big one time stimulus, particularly
Speaker 1: tax cuts and particularly the corporate tax cuts, and that
Speaker 1: will have a fading impact at the same time as
Speaker 1: the budget deficits. Hence the sales of bonds will increase
Speaker 1: at the same time as the balance sheet is being contracted.
Speaker 1: When I do the calculations of who are the buyers
Speaker 1: of that and one of their quantities, I see an
Speaker 1: imbalance in that. And so UM, that is a form
Speaker 1: of problems that existing. So three types of debt. You
Speaker 1: have household, You've corporate, you have government. Where's the biggest problem? Um? Government?
Speaker 1: And UM, the government debt and the corporate debt are
Speaker 1: the biggest problems. So let me push back on you
Speaker 1: and that and UM please do But UM, and what
Speaker 1: I'm saying is not in total, okay, but government by
Speaker 1: and large in total. But UM, corporates, not in total,
Speaker 1: but in existing in certain pockets. It's going to be
Speaker 1: the pushback because there seems to be a whole lot
Speaker 1: of corporate debt, some of which seems to be with
Speaker 1: good companies with good care flows and a strong ability
Speaker 1: to service that debt a rated and then I don't know,
Speaker 1: it's call at the bottom who are issuing a lot
Speaker 1: of debt that's a kind of junkie and of dubious
Speaker 1: serviceability in the future, Or am I just being too
Speaker 1: nat I think you're pretty you're pretty accurate on that.
Speaker 1: In other words, if you did triple B or double
Speaker 1: by debt, and if you looked at UM leverage loans
Speaker 1: and which has become huge the past five years, that's right,
Speaker 1: and UM to finance also acquisitions a lot of private
Speaker 1: equity acquisitions and and so on, and you looked at
Speaker 1: the collateralized loan obligation mark CLO market UM in terms
Speaker 1: of those things, there are some there are vulnerabilities that
Speaker 1: exist there in terms of if incomes go down and
Speaker 1: they're fairly covenant like, they're they're very convenent lie UM
Speaker 1: and so and the big growth in debt in this
Speaker 1: psycho has been the corporate debt too, because when interest
Speaker 1: rates were lowered to a level that was below the
Speaker 1: return on equity it paid to have buy backs or
Speaker 1: to make acquisitions or um, and to go out there
Speaker 1: and have a private equity because I get a higher
Speaker 1: return on the equity. So it's a great financial That's
Speaker 1: what you do with free money. You take it and
Speaker 1: you put it to where it's going to generate the
Speaker 1: highest return. That's right, and so UM a lot of
Speaker 1: that UM that's where the big growth is. Two things
Speaker 1: about that is that can't continue. First of all at
Speaker 1: that pace, okay, so um that that problem under the
Speaker 1: market will be disappearing. And then because you get leveraged
Speaker 1: up to a certain point, you can't extrapolate that. But
Speaker 1: then in addition to that, you know through experiences that
Speaker 1: there are some that you could see are going to
Speaker 1: be problems when earnings get hurt. And then there are
Speaker 1: some that you can't see because you haven't stress tested
Speaker 1: whether that was done well with good asset liability matches.
Speaker 1: You know, for example, number of multinational companies bought companies
Speaker 1: in other countries and they financed that with dollar denominated debt,
Speaker 1: and when the dollar goes up and the incomes that
Speaker 1: they're receiving is in local currency, you have an asset
Speaker 1: liability mismatch. So there are a lot of asset liability
Speaker 1: mismatches that are out there that we sort of worry about.
Speaker 1: Those are the particular spots I would say that look vulnerable,
Speaker 1: not nothing like it looked to us in two thousand seven.
Speaker 1: But then if you go a little bit longer and
Speaker 1: you take the movement. Um, we also have nonfunded, non
Speaker 1: debt liabilities in the form of pension liabilities and healthcare liabilities,
Speaker 1: both of which widnded, that are going to come. I mean,
Speaker 1: we're going to a lot of promises, promises either be
Speaker 1: paid back in the form of debt or promises to
Speaker 1: you have money to pay pensions and all and negati
Speaker 1: here that that all becomes limited and not all that produces,
Speaker 1: you know, a greater squeeze, So it doesn't look as big,
Speaker 1: like a big bang type of thing. My concern has
Speaker 1: to do with the fact that it is coming at
Speaker 1: the same time as there's populism and the political because um,
Speaker 1: we're really right now at each other's throats, the left,
Speaker 1: the right, the UM. I want to I want to
Speaker 1: push back on that also, But before I do that,
Speaker 1: I just have to come back to the corporate debt.
Speaker 1: What you're describing is sort of an echo boom following
Speaker 1: the original bubble and crash. Is that echo boom historically consistent?
Speaker 1: Does that always seem to happen after a debt crisis
Speaker 1: and collapse? Do you always get hey, things start to
Speaker 1: repair and here we go again, or is this kind
Speaker 1: of unique to well? You always you always go through
Speaker 1: the cycle. And so when you're uh, when we we
Speaker 1: are in a position where we're nine years into the
Speaker 1: expansion and central banks have brought fifteen sixteen trillion dollars
Speaker 1: worth of assets and made that cheap, you then mechanistically
Speaker 1: have what you're calling an echo boom. You have that
Speaker 1: big boom that has taken place. Happens, and that that
Speaker 1: always happens. That's why you always have cycles, you know,
Speaker 1: And that's why you come back to seven between the politics,
Speaker 1: it's ten years after that's twin years, almost ten years.
Speaker 1: We're late in the short term cycle, relatively late, although
Speaker 1: I would say we've got probably the seventh inning of
Speaker 1: the short term cycle this business cycle. We're late in
Speaker 1: the long we're late in the long term cycle. Meeting
Speaker 1: the amount of ammunition is less. These are facts in
Speaker 1: other words, the interest rate, the quei thing um. And
Speaker 1: we do have um a lot of populism and uh
Speaker 1: and clashes about wealth and culture and those things internally
Speaker 1: much more than we did. And we're at the top
Speaker 1: or right near the top of the cycle and the
Speaker 1: markets and so on, so you can't imagine that things
Speaker 1: would turn down. And when things turned down, UM, my
Speaker 1: big worry about that following these cycles is that political conflict,
Speaker 1: social conflict worsen's because at times get worse for everybody.
Speaker 1: And that's and that's that's an issue. So how do
Speaker 1: the politics play out? How how were we with each other?
Speaker 1: Can we can we approach that together or not? And
Speaker 1: then of course then there's the power of the central
Speaker 1: bank to be helping us, which is less. So so
Speaker 1: let me do the little bit of pushback. And you know,
Speaker 1: we kind of all exist in a media world, in
Speaker 1: a social network world. But when we see these studies
Speaker 1: that talk to Americans about a lot of hot button issues,
Speaker 1: once you get away from the crazy rhetoric and the divisiveness,
Speaker 1: we kind of all more or less have you know,
Speaker 1: six agreement on some big issues. We all agree that
Speaker 1: there should be less abortions if there's a way to
Speaker 1: make that happen. We could disagree about whether or not
Speaker 1: it should be mandatory, but there's some agreement there. There's
Speaker 1: some agreement about some pretty common sense gun control laws.
Speaker 1: There's some agreement about pollution and climate change. There's a
Speaker 1: small group of people who don't believe it's man made,
Speaker 1: and there's a small group of people who don't believe
Speaker 1: in small pox vaccination. But by and large, most of
Speaker 1: America things it's a bad idea to spew chemical exhaust
Speaker 1: into the into the atmosphere that we all have to
Speaker 1: um breathe. So, taking what you've learned, when you've put
Speaker 1: these principles of of dead crisis together, how can we
Speaker 1: get people outside of Twitter and Facebook to focus on
Speaker 1: what we have in common? Hey, we're all Americans. We
Speaker 1: all share a certain common belief system. How come we
Speaker 1: don't focus on what brings us together as opposed to
Speaker 1: what divides us. Well, first of all, I would disagree
Speaker 1: with us um. I think we have a higher level
Speaker 1: of conflict that created a conflict gauge. The conflict gauge
Speaker 1: consists of a lot of different measures of conflicts alone
Speaker 1: go over that. I was kind of leaning in that direction. Okay,
Speaker 1: but it would be UM. The polarity within the two
Speaker 1: political systems, the percentage of UM those who are adamantly
Speaker 1: in favor of their candidate versus adamantly opposed to the
Speaker 1: other candidate. That it would be. There's a whole bunch
Speaker 1: of political things like uh, compromises in the bills that
Speaker 1: are there, UM, A whole bunch of those types of
Speaker 1: political things. UM. There are social value measures UM. In
Speaker 1: other words, UM lots of indicators of what the parties
Speaker 1: think of the other side, which is um uh antagonistic
Speaker 1: almost to the point of being violent in terms of
Speaker 1: measuring what one side is listening to the other side.
Speaker 1: Any if you if you use UM, if you google
Speaker 1: the word google, count the word war as this thing
Speaker 1: from the word peace or compromise, and so on, all
Speaker 1: of those measures. I could rattle on a lot. Big
Speaker 1: differences in beliefs, Okay, big difference Uh. One of the
Speaker 1: things that used to bind us more together was UM
Speaker 1: certain religious produced certain UM common beliefs of Judeo Christian,
Speaker 1: of relief system, the appreciation for the immigrant UM. These
Speaker 1: were things, in other words, where diversity was really the
Speaker 1: main sort of thanks anyway I could rattle off those.
Speaker 1: We so we created an index, and the Index of Conflict,
Speaker 1: which is just these measures biled up UM shows that
Speaker 1: the conflict gauge is both within the country and within
Speaker 1: most countries, is greater than it was since the thirties,
Speaker 1: and also between countries. So is it just the nature
Speaker 1: of the debt cycle? Can we blame? Can you blame
Speaker 1: I don't know, social media, Fox News, Nancy Pelosi, Donald Trump?
Speaker 1: Who gets the blame for that? Or is this just
Speaker 1: what happens when you have a big debt crisis. Um. Yeah,
Speaker 1: I think it happens over and over again because of
Speaker 1: that disenfranchise and also I don't think they have much contact.
Speaker 1: I mean, it's totally understandable. I think in the sense
Speaker 1: that UM, capitalism right now is not working for the
Speaker 1: majority of Americans. And I'm a hardcore capitalist. I wish
Speaker 1: I could. But if you take the bottom six I
Speaker 1: did a study of carving out what is it like
Speaker 1: the bottom I want to look at the majority. Those
Speaker 1: conditions are are bad. Another hasn't been income growth theory
Speaker 1: on a real basis. That's right, there's rising debt um Uh,
Speaker 1: there's rising death rates to rid death rates from opiates
Speaker 1: death rates, but from suicides and so on. In those
Speaker 1: those conditions, less economic mobility, there's a whole ga. We
Speaker 1: used to have a middle class that was on the
Speaker 1: assembly line and it kind of worked. So we have
Speaker 1: a greater economic polarity you have. UM, so there's a
Speaker 1: disenfranchised group out there. That's important. UM, we're also we
Speaker 1: don't have that same sort of contact with each other.
Speaker 1: You know, I live in Greenwich, Connecticut, in Greenwich, so
Speaker 1: I think so exemplifies this. And my um we live
Speaker 1: in Fairfield County, Greenwich, Connecticut. Um, it's I think still
Speaker 1: the wealthiest state in the United States anyway, right up there. Um,
Speaker 1: in that state there is one county that's rich and
Speaker 1: the rest of the count state pretty much as poor,
Speaker 1: and it's going in terrible situation. My wife, she does
Speaker 1: to work with the disengaged kids, the students who basically
Speaker 1: they're just kind of coasting through school and not in
Speaker 1: doing anything. Yeah, thank you for remembering. Yeah, it's um,
Speaker 1: there's disengaged and there's disconnected. And the disengaged are the
Speaker 1: kid who attends school but he doesn't study, doesn't take tests,
Speaker 1: or he fails and that county is just so to
Speaker 1: getting through, and then there's disconnected, which means they don't
Speaker 1: know where they are. They're no longer coming to the
Speaker 1: school district. Twenty two percent of the high school students
Speaker 1: are one of those. Those kids are going to be
Speaker 1: twenty Those kids are going to be on the street.
Speaker 1: They're gonna be there's a uselessness. They have to share
Speaker 1: books literally, I mean in some cases sharing pencils, they literally.
Speaker 1: Can you do to change that? Sounds like a broken system,
Speaker 1: both on the educational level and the family level. How
Speaker 1: can you possibly fix that? Well, these are um I'm
Speaker 1: still answering the last question on the division right and
Speaker 1: that division and most people don't even have contact with it,
Speaker 1: Like I wouldn't have contact if it wasn't for my
Speaker 1: wife taking me there and they in their twenty five
Speaker 1: miles up the road. You know, you're in Grant, Connectic
Speaker 1: kit and then and there, and you go to Bridgeport
Speaker 1: or you go to Hartford, and you look at what
Speaker 1: the daily shootings are killings in this place. Hartford, Connecticut
Speaker 1: used to be the yeah, and and uh, you know,
Speaker 1: a very fine place to be. So there is this
Speaker 1: polarity we're talking about the reasons for the polarity. There's
Speaker 1: a lot of reasons. I think to answer your question,
Speaker 1: what you need is to recognize that that that that's
Speaker 1: a national emergency, in other words, that capitalism has got
Speaker 1: to work for the majority of the people. First of all,
Speaker 1: let's recognize that. Let's and let's establish what that polar
Speaker 1: metrics around that. You you have always been such a
Speaker 1: private individual most of your career. You're not a big
Speaker 1: in the past. When the books came out, you started
Speaker 1: doing a little more media. This sounds like politics. I
Speaker 1: can't imagine any interest in running for for office or
Speaker 1: you the I can't imagine it. Now, some guy who
Speaker 1: sits about forty feet from where we're having a conversation
Speaker 1: has been talking about running in Do you think the
Speaker 1: sort of technocratic approach, the engineered approach that Bridgewater uses,
Speaker 1: or Mike Bloomberg, who is the owner of Bloomberg LP
Speaker 1: where we're sitting right now, do you think that approach
Speaker 1: can help solve some of these issues. And I was
Speaker 1: not planning on making a political commercial. I'm I'm sincerely
Speaker 1: asking a question. These have been very, very challenging problems
Speaker 1: for generations. Nobody seems to have figured out how to
Speaker 1: fix that. Well, I think a big I think big
Speaker 1: progress can be made. First, UM, let's acknowledge it, let's
Speaker 1: measure it, put the statistics, let's use those measurements as metrics,
Speaker 1: in other words, to own it, so that now you say,
Speaker 1: if I change that number, I'm doing a good job,
Speaker 1: or if I'm not changing that number. And then let's
Speaker 1: bring about the various peoples and parties. UM various parties
Speaker 1: people most importantly, who are experts who deal in those
Speaker 1: communities and understand them and make changes. Because I think
Speaker 1: there are a lot of things that can be done
Speaker 1: in my philanthropic efforts, and I think probably in Mike's
Speaker 1: philanthropic You guys just did something with the ocean X
Speaker 1: two hundred million dollar investment to help uh folk us
Speaker 1: on keeping the oceans cleaner and resolving submission. That's right,
Speaker 1: And I think people, I think we're also dealing with
Speaker 1: that population and a we see all the time great
Speaker 1: return on investment type of things that could be done,
Speaker 1: and you just cannot imagine how the payoff can't be
Speaker 1: great on those types of things. I think you could
Speaker 1: put together public private partnerships and that that could be
Speaker 1: corporations or philanthropists together with the government to do high
Speaker 1: return on investment. I could rattle off a bunch of
Speaker 1: these types of things that would help to eliminate, in
Speaker 1: other words, things that pay for themselves. And think about,
Speaker 1: you know, the cost of getting not getting through high
Speaker 1: school and getting not getting a job in an individual's lifetime.
Speaker 1: It's gonna, it's gonna be forever. It's a it's about
Speaker 1: a million dollars per per per person. The that means
Speaker 1: everything from police to courts to jails and beyond incarceration
Speaker 1: is between eighty thousand dollars a year is what happens.
Speaker 1: And people if you don't have jobs and you're in
Speaker 1: a community that way, and like I support micro finance,
Speaker 1: and for every dollar that I give to micro finance,
Speaker 1: twelve dollars is lent out to people in the first
Speaker 1: five years and it keeps ongoing because they get paid
Speaker 1: back and so on. If you look at um um
Speaker 1: that I could go on and on and on a
Speaker 1: listening and those things, but somebody's got to take it
Speaker 1: on right in other words, and then the other thing
Speaker 1: is um I think the important, the most important thing
Speaker 1: is to believe that we're there's a country that we
Speaker 1: are in it together, Okay, that we need to um,
Speaker 1: not fight about things, but to debate, argue and then
Speaker 1: move on to compromises and to run the country for
Speaker 1: the whole. We need to have thoughtful disagreement and principles
Speaker 1: for dealing with it. Yeah, so you got me on
Speaker 1: a hot street, Ray, you got my vote. So I'll
Speaker 1: tell you that much I wish. I know, I have to.
Speaker 1: You have to head out. Promise me you'll come back.
Speaker 1: I have a thousand more questions for you. I can
Speaker 1: talk to you for hours and hours. Um, this has
Speaker 1: been absolutely delightful. Thank you for being so generous with
Speaker 1: your time. Thank you for having me. It's always a
Speaker 1: delight Um. We have been speaking with Ray Dalio, co
Speaker 1: founder of Bridgewater Associates. If you enjoy this conversation, well,
Speaker 1: be sure to look up and entered down an inch
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Speaker 1: wherever your finer podcasts are sold. I would be remiss
Speaker 1: if I did not thank the correct staff that puts
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