ofare with ray dalio bridgewater. i want to talk about you and bridgewater. you have been around for a while and you have suggested to people that you are starting to step back. a lot of people are saying, this man should stay in the game. what are your plans? ray: by the way, it has been 40 years. michael: i was just trying to be nice. ray: stepping back in management, not stepping back investments. i am an addict, i started at 12. i can't stop, i love the game. i will always be playing the game. michael: do you have a succession plan in place? prince, who has worked with me for 27 years, i think he is 55. greg jensen has worked with me for 17 years and he just turned 40. and i have a lot of people who have been there a long time and we have all played the game. has anan mullally historic meeting. everybody runs a company differently. everybody has a style. when you have a meeting at bridgewater, with the incredibly trained individuals you choose to hire, how do you inject humility into the meeting? ray: the business we are in teaches us that. we have a very

august 24, 2015, the end of the super cycle, bridgewater and mr. dalio say -- he is channeling nouriel roubini. michael: the big move would be to bring in additional qe. do you think qe works anymore? ray: it will work a lot less than it did last time. we will have a downturn and the downturn should be worrisome because we do not have the spreads. qe is the purchase of those assets to get the premiums up. when you keep pushing and you buy more bonds, if there is not an attractive investment relative to bonds, if there is not much spread in something else, you get less effective monetary policy. we call that pushing on a string. we are not there yet, but we are closer to being there. europe is there. michael: they are pushing on a string? ray: what are you going to buy in the way of bonds? michael: you cannot buy a german two-year. ray: the effectiveness of monetary policy comes through the currency. when the person who is receiving the cash has to do something, it is there -- there is a pressure to move it out to the country. if you look at us, we have v

we are with ray dalio of bridgewater.h no need for introductions. a former caddy. yes, he is in the news. we will get to that. very importantly, economicprinciples.org. what will we do next? michael: if you are having a bad month, there are openings for caddies here. maybe. this is where i want to get to risk parity. how do you develop the theory, it comes out of the idea that everything happens over and over again. you wanted a way to invest that would enable you to sail through all of the various ups and downs. tom: what happened in 1996 that got you to this introduction? what was that moment? ray: in the early 1990's, i had earned enough money that i was putting together a trust for my family. i realized -- i know that making money in the markets is zero sum -- i knew something about how markets worked. the problem is you -- if you have a stock-bond mix, if you want to diversify, and you buy stocks, 50-50 of your money, 50% in stocks, 50% in bonds, the problem with that you are dominated by equities. i need more volati

primetime edition of bloomberg surveillance on radio and television worldwide with ray dalio, founder of bridgewaterociates. ?hat do we do what is a central bank do when it is at that. when you're at the end of that long-term credit cycle. ray: the thing that you do is you realize that the risks are asymmetrical. you can tighten monetary policy. there is enough debt, enough sensitivity. see, because to the risks are asymmetrical. that's the main thing. the risks on the downside are different than the risks on the upside. brendan: do you think qe works anymore? ray: it will work less than it does last time just like each time it worked a lot less. we cannot have a big rate rise. the term structure on assets, because of the amount of debt, what it has with the dollar with deflationary pressures. we will have a downturn. worrisomern should be because we do not have the spreads. qe, you're asking if it will work. it is the purchase of those assets to get those premiums up. when you keep pushing, buying more bonds. not an attractive investment relative to bonds, the spread is what will drive that. if the

michael mckee and myself with dalio of bridgewater.going to embarrass ray with, what is the euro going to do or what are the patriots going to do? the conversation next wednesday at 6:00 p.m. a single best chart. we are thrilled to do this. this is the acclaimed weekly index of bloomberg consumer comfort. up we go, the golden years of the 1990's. down we go. we soar to get back to the midpoint. then it does not happen. there is that little bit of recent rollover we are seeing. this goes back to your idea of structural slowdown overlaid on top of a cyclical slowdown. aren't we supposed to have a recession at some point again? every eight years? lakshman: not every eight years. it could be every one year or every 10 years. with your chart, there is the slowdown. i would read what is going on at the end, that is going to continue easing down. when we look at the expectations or the mexican -- michigan expectation, this is more frequent, this is weekly. they all peaked in january. olivia: all right. lakshman: they were lower in june, they

dalio at bridgewater, mr.passport, and you have very highly respected people starting to talk about the chances of qe 4 and that's government bond buying, a very dovish position coming out of the fed. so those two scenarios are very good for utilities and if you're dovish, you want to be in utilities. >> todd, let's take a look at the technicals. that's what you do, the xlu. does it look like there's continued strength? >> if you must hide out somewhere, there is strength here. on a trailing three month basis it's barely positive where every other sector spyder is negative. treasuries have put in a higher low compared to the summer. we're seeing a flight to quality which has put the treasury market up. prices up corresponds to yields down. if you compare that to the xlu which by the way has a 53% correlation, the xlu has retested those summer lows. so from a comparison intermarket perspective, xlu is undervalued. should those treasuries continue higher, xlu could move higher. >> could, not exactly -- >> it's a

scarlet: that was an excerpt from our primetime special with ray dalio of bridgewater.see the complete interview, go to bloomberg.com. we have more coming up. a major global player in cable agrees to altice, buy cablevision. ♪ scarlet: welcome back. we want to get a check of the markets with an hour and 20 minutes left for the fed decision to read let's check in with matt miller. i lost my earpiece for a moment. markets, there has been very little change all morning. as is normal on a fed decision day, you don't see a lot of action in the equities market because traders kind of sit on their hands until a decision comes out and then they try and i just the statement and make the decision. after 2:00, closer to 2:15 is when you will start to see action. we have seen the nasdaq start to climb. all of these indexes were unchanged and 90 can see the s&p and the dow unchanged. tilting toward gains for most of the day. i'm going to show you a couple of things. -- w.a.r. p -- wirp. we have seen it hovering around 30% for the last couple of days. fed funds futures will not be at

that brings us back to our , thersation with ray dalio founder of bridgewater associates.ets are going to react. he is concerned the markets may not like what the fed is thinking if they decide to raise interest rates. the next big move is going to be lower. we posed the question, then what does the fed do? he said, qe. >> do you think qe works anymore? >> it is going to work a lot less than it did last time. we cannot have a big rate rise. the amount of debt, what it adds to the dollar, what the around.nary's exist we will have a downturn. it should be particularly worrisome because we don't have the spreads. qe is the purchase of assets to get premiums up. if there is not an attractive investment relative to bonds, if the spread is what is going to drive that, if there is not much bread and every thing else, you get less spread. we are not there yet. we are closer to being there. europe is there. >> they are pushing on a string? >> yes. buy ine you going to negative interest rates? we are very, very close. that is why you need more currency depreciation. the effectivenes

bridgewater associates, investing nearly $170 billion. the self-made money manager predicted the lasting impact of the financial crisis. and his fund has outperformed for decades. we sat down with elio -- dalioversation on his investment strategy. his view on monetary policy. >> i don't believe they can raise rates faster than is discounted in the curve. >> analyzing the global economy. >> i think china is going to