{"id":31490,"date":"2018-02-23T07:15:23","date_gmt":"2018-02-23T12:15:23","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31490"},"modified":"2018-02-23T07:15:23","modified_gmt":"2018-02-23T12:15:23","slug":"dont-worry-its-only-a-pre-bubble","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31490","title":{"rendered":"Don’t Worry, It’s Only a “Pre-Bubble”"},"content":{"rendered":"
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Don’t Worry, It’s Only a “Pre-Bubble”<\/a><\/h3>\n<\/div>\n
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Ray Dalio, who embarrassed himself saying “You\u2019re Going to Feel Pretty Stupid Holding Cash” offers more silliness.<\/p>\n<\/section>\n<\/div>\n<\/header>\n
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Ray Galio, the head of the world’s largest hedge fund says U.S. in a \u2018Pre-Bubble Phase\u2019 with a 70% Chance of Recession<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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\u201cI think we are in a pre-bubble stage that could go into a bubble stage<\/em>,\u201d the hedge-fund manager said during a Harvard Kennedy School\u2019s Institute of Politics on Wednesday.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Dalio\u2019s recession comments echo remarks he has made over in a LinkedIn post, where he wrote that \u201cthe risks of a recession in the next 18-24 months are rising.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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“Stupid to Hold Cash”<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Despite his recession call, Dalio is the same person who told the crowd at Davos, \u2018If You\u2019re Holding Cash, You\u2019re Going to Feel Pretty Stupid<\/a>\u2019.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Dalio is also a believer in the sideline cash theory and that we may see a “Minor Correction<\/a>“.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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In a LinkedIn article following the VIX-related plunge, Dalio said We\u2019ve Just Had a Taste of What the Tightening Will Be Like<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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The headline sounds bearish, but the message sure isn’t, as the key paragraph explains.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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“Still, these big declines are just minor corrections in the scope of things, there is a lot of cash on the side to buy on the break, and what comes next will be most important.”<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Inundated With Cash<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n

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In the CNBC interview, Dalio also spoke of sideline cash.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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“There is a lot of cash on the sidelines. I don’t mean just investor cash. I think banks have a lot of cash. Corporations have a lot of cash. So we are going to be inundated with cash.<\/em>”<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Sideline Cash Rebuttal<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n

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