The Giant Money Palace of Ray Dalio

The founder of Bridgewater Associates Ray Dalio, is a man in a hurry. He has many errands to run such as enforcing radical transparency, shuttling taxidermied birds and last but not least, wooing clients.

It is not surprising, thought, that the hedge fund legend has built a helipad into his plans for the new headquarters of Bridgewater in Stamford, Connecticut.

According to the Stamford Advocate, the Rayplex will be easily associated with a palace if it is built the way he intends to:

“Made up of two long, curved buildings joined in the center by bridges and paths, the structure is poised to become the most striking presence on the Stamford coastline. The project’s goal, according to the coastal site plan application, is “to house a corporation in an environment that fosters personal interaction and a strong connection to the living world.”

In addition to the helipad, the headquarters will have a marina, a restored estuary and a floating recreational barge.

Many people, however, have objected to the idea of the campus being much bigger that it was initially proposed.

Source: The Giant Money Palace of Ray Dalio

A trouble for QE3

Ben Bernanke, Photo: Bloomberg

The Fed’s decision to implement a third round of quantitative easing (QE3) has raised 3 very important questions concerning the economic growth of the USA, whether it will bring about an increase in risky assets or its effect on GDP (gross domestic product) will be similar or somewhat different.

Many argue that the effect of QE3 is more powerful than that of QE1 and QE2. Whilst the previous rounds of quantitative easing have been associated with an increase in equity prices, the duration and size of QE3 are somewhat more substantial.

Moreover, the credit channel seems not to be outperforming these days, as banks hoarded the extra liquidity from the quantitative easing, which created excess reserves instead of increasing lending.

The only way in which the QE can be transmitted to real economy is the effect of an equity market increase. However, there is an argument that the QE3 will contribute to the rise in equity prices. If such thing requires a significant growth recovery of the GDP, it’s tautological to be said that if equity prices rise enough, he result in the increase of GDP justifies the rise in asset prices.

As a whole, the third round of quantitative easing reduces the risk of an economic contraction but it’s highly unlikely that it will bring about a sustained recovery. In the short run, the latest round will contribute to some investor’s taking risk and it will also stimulate asset reflation.

A trouble for QE3