Monday, February 09, 2009

Ray Dalio in Barron's: it's a "D-process"

Hedge fund manager and Bridgewater Associates founder, Ray Dalio talks to Barron's this week about the global economic downturn and ongoing deleveraging process (H/T: Paul Kedrosky).

Here's an excerpt from the Barron's interview:

"Barron's: I can't think of anyone who was earlier in describing the deleveraging and deflationary process that has been happening around the world.

Dalio: Let's call it a "D-process," which is different than a recession, and the only reason that people really don't understand this process is because it happens rarely. Everybody should, at this point, try to understand the depression process by reading about the Great Depression or the Latin American debt crisis or the Japanese experience so that it becomes part of their frame of reference.

Most people didn't live through any of those experiences, and what they have gotten used to is the recession dynamic, and so they are quick to presume the recession dynamic. It is very clear to me that we are in a D-process..."

Dalio is careful to use the "D-process" term to describe what's happening, but judging by what he says later on in the interview, it's pretty clear that we're facing something more than your run of the mill post-World War II recession. Meanwhile, there are some who are not shying away from using the term "depression".

Check out the rest of the interview at the link above and see our post, "Ray Dalio in FT", for more background on Dalio's investing methods and how he got his start in the business.

3 comments:

Anonymous said...

Ray Dalio's annual letter to clients where he describes the root causes of the financial market crisis and what differentiated investors who made money from those who lost money last year.


http://www.scribd.com/doc/11474912/Bridgewater-Associates-Annual-Letter-to-Clients

Anonymous said...

"Ray Dalio Client Letter"

David said...

Thanks for that link, it should make for interesting reading.

Funny, as I was just reading someone's post on Mohnish Pabrai's letter to clients, which was also on Scribd.