The founder of the world's largest hedge fund just shared brutal analysis of the US economy

pulse

October 23, 2017 8:36 PM

While the headline numbers show a growing, healthy economy, there's a lot more going on under the surface that needs to be paid attention to.

Ray Dalio, the founder of Bridgewater, the world's largest hedge fund, just published a note on the state of the US economy.
He noted that the bottom 60% of Americans are struggling, listing a litany of depressing statistics to make his case.
He said that if he were running Federal Reserve policy, he'd keep an eye on the bottom 60%.

Brutal.

There's no other word for Ray Dalio's latest note on the US economy, and the situation it describes. The founder of Bridgewater, the world's largest hedge fund with about $160 billion in management, posted the note on LinkedIn on Monday, and sets about splitting the US economy in two: the top 40% and the bottom 60%.

The point of this exercise is to show that while the headline numbers show a growing, healthy economy, there's a lot more going on under the surface that needs to be paid attention to.

The stats he cites for the bottom 60% are downright depressing. Here's a selection taken straight from the note (emphasis Dalio's):

Real incomes have been flat to down slightly for the average household in the bottom 60%
since 1980 (while they have been up for the top 40%).
Those in the top 40% now have on average 10 times as much wealth as those in the bottom 60%. That is up from six times as much in 1980.
Only about a third of families in the bottom 60% have retirement savings accounts—e.g., pensions, 401(k)s—which average less than $20,000.
For those in the bottom 60%, premature deaths are up by about 20% since 2000. The biggest contributors to that change are an increase in deaths by drugs/poisoning (up two times since 2000) and an increase in suicides (up over 50% since 2000).
average household income for main income earners without a college degree is half that of the average college graduate
divorce rates have more than doubled
The number of prime-age white men without college degrees not in the labor force has increased from 7% to 15% since 1980.

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