(Bloomberg) — Bridgewater Associates founder Ray Dalio defended his decades-long investment in China and pledged he won’t abandon the world’s second-largest economy even with all of the problems there he’s identified and the risks of a war with his own country, the US.
“I have had a wonderful 40-year relationship with the Chinese people and the Chinese culture that has led me to love them. For me, being involved with them and their markets go together and I wouldn’t want to be without either,” the billionaire investor wrote in a LinkedIn post. “I don’t jump in when things are booming and jump out when things are tough because I am neither ‘a fair-weather friend’ nor ‘a fair-weather investor.’”
In an earlier post from March 27, the hedge fund titan had discussed the many difficulties and challenges China’s faced and warned that Beijing should cut its debt and ease monetary policy or face “a lost decade.”
Dalio said China’s problems are manageable now if “Chinese leaders do their job well by being both smart and courageous.” He pointed to signs that the economic leaders in Beijing are preparing to conduct quantitative easing along with debt restructuring to engineer what he described as a “beautiful deleveraging.”
Last week, a line from a 172-page book citing President Xi Jinping’s old comments on the nation’s monetary tools stoked a group of stock and bond traders to argue that may mean Beijing is considering quantitative easing, which involves a monetary authority buying a country’s government bonds. But the speculation was rejected by most commentators, including economists at Goldman Sachs Group Inc.
Read more: Old Xi Speech on China’s Monetary Tools Catches Trader Eyes
To Dalio, Chinese policymakers are able to “manage how to deal with political, geopolitical, nature, and technology forces well.” He has long nurtured relations with Chinese officials, expressed admiration for some of Beijing’s economic policies and built business for his firm in China. Dalio was among the prominent American business chiefs sharing the top table with Xi at an exclusive dinner in San Francisco last November.
At the same time, he has also been consistent in warning about the risk of conflict between the world’s two largest economies. Last April, he wrote in a LinkedIn post that tensions could worsen as the US heads toward the presidential election in November 2024.
In Monday’s post he said he understands others when they are concerned “if there is a US-China war it would be disastrous especially if one is an American investor.” Dalio admitted this is one of the issues he thinks about a lot when considering investing in most countries.
None of these, however, seems to stop Dalio from doing business with China.
“To me the key question isn’t whether or not I should invest in China so much as how much I should invest,” he wrote, adding that he sees China as one of his “15 or more good uncorrelated return streams” and “a core position that I will vary from based on my assessments of all of the things I mentioned.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
