Ray Galio, the head of the world's largest hedge fund says U.S. in a ‘Pre-Bubble Phase’ with a 70% Chance of Recession.

I think we are in a pre-bubble stage that could go into a bubble stage,” the hedge-fund manager said during a Harvard Kennedy School’s Institute of Politics on Wednesday.

Dalio’s recession comments echo remarks he has made over in a LinkedIn post, where he wrote that “the risks of a recession in the next 18-24 months are rising.”

"Stupid to Hold Cash"

Despite his recession call, Dalio is the same person who told the crowd at Davos, ‘If You’re Holding Cash, You’re Going to Feel Pretty Stupid’.

Dalio is also a believer in the sideline cash theory and that we may see a "Minor Correction".

In a LinkedIn article following the VIX-related plunge, Dalio said We’ve Just Had a Taste of What the Tightening Will Be Like.

The headline sounds bearish, but the message sure isn't, as the key paragraph explains.

"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."

Inundated With Cash

RECOMMENDED ARTICLES

In the CNBC interview, Dalio also spoke of sideline cash.

"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."

Sideline Cash Rebuttal

Question of the Day

Previously, I asked the question: Do hedge fund managers really believe this sideline cash nonsense, or are they purposely feeding their clients BS?

Here are the final results.

Pre-Bubble?

The major networks fawn all over Dalio hoping for quotes, and not a one them takes him to task for spouting pure nonsense or even his "stupid to hold cash" call.

Mike "Mish" Shedlock

Taunts From Bulls Come In: "Stupid to Hold Cash"

Bridgewater’s Ray Dalio says investors in cash are going to feel pretty stupid.

Don’t Worry: “It’s Only 1997” Besides “It’s Different This Time”

Two articles in the last two days, one on Bloomberg, the other on the Wall Street Journal, provided key reasons we should not worry about stock market bubbles. 1. It’s only 1997 (P/E valuations have not exceeded the dot-com bubble in 2000 yet) 2.It’s different this time (always a classic argument)

Bitcoin Debate: It's a Bubble! No, It's Not, It Cannot Be a Bubble!

The bitcoin debate goes on and on. Some claim it's a bubble. Others say it isn't. Still others say it can never be a bubble.

Expect a Deal With China, Just Don't Expect Much From It

Trump says the trade talks with China are going well. And China will purchase soybeans again. Don't expect much more.

Fed Worried About Lack of Inflation, Stock Market Bubble (Sort Of)

FOMC minutes show Yellen is no longer convinced that low inflation is transitory. Other members mention bubble concerns.

Don't Worry "Everything Bad is Priced In"

The stock market has turned the corner. Everythig bad is priced in.

Billionaire Ray Dalio Calls For "Minor Correction": HODL Equities?

Billionaire Ray Dalio, who founded the world’s largest hedge fund at Bridgewater Associates, sees a "minor correction."

Fed Tightening Cycles Coincide With Bursting of Asset Bubbles: How to Play It

Fed tightening has been a reliable catalyst for the bursting of asset bubbles globally, says Crescat Capital.

Man Who Says "Bubbles Only Identified When They Burst" Detects Bubbles

Alan Greenspan is on a bubble-announcing campaign. He can see them now, but he couldn't see them then.