'One of those once in 100 years catastrophic events': Billionaire Ray Dalio says coronavirus will 'annihilate' select parts of the market — and warns further emergency rate cuts will be futile
The coronavirus is a unique event that will crush investors who don't protect for the worst, Bridgewater Co-Chairman Ray Dalio wrote., highlighting his perspectives on the outbreak itself, its economic impact, and markets' reactions. He noted his aversion to betting on events mired in uncertainty, adding that he prefers to insulate himself from murky risks.
"It seems to me that this is one of those once in 100 years catastrophic events that annihilates those who provide insurance against it and those who don't take insurance to protect themselves against it because they treat it as the exposed bet that they can take because it virtually never happens," the investor wrote.
. The 50-basis-point adjustment serves as a shot-in-the-arm for consumer spending as virus fears grow, and Fed chair Jerome Powell signaled additional stimulus is in the cards if the outbreak intensifies. "In Europe and Japan, monetary policy is virtually out of gas so it's difficult to imagine how pure monetary policy will work," Dalio wrote. "So, it seems to me that containing the economic damage requires coordinated monetary and fiscal policy targeted more at specific cases of debt/liquidity-constrained entities rather than more blanket cuts in rates and broad increases in liquidity.
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