Author Topic: Ray Dalio & the Three Big Issues  (Read 1688 times)

Wrenchturner

  • Bristles
  • ***
  • Posts: 352
  • Age: 31
  • Location: Canada
Ray Dalio & the Three Big Issues
« on: September 09, 2019, 08:41:44 AM »
Just wondering what you folks think about this, I'm still new to this investing stuff:

https://www.linkedin.com/pulse/three-big-issues-1930s-analogue-ray-dalio/

The three big issues:

1) The End of the Long-Term Debt Cycle (When Central Banks Are No Longer Effective)

+

2) The Large Wealth Gap and Political Polarity

+

3) A Rising World Power Challenging an Existing World Power

TheAnonOne

  • Handlebar Stache
  • *****
  • Posts: 1508
Re: Ray Dalio & the Three Big Issues
« Reply #1 on: September 09, 2019, 09:37:45 AM »
//Thread

There will be a downturn, the people who hold steady will come out fine OR they won't- but in this case, nothing you do, short of fleeing the country, will save you.

Stay on track, you will see doomsday predictions daily, and occasionally, some of them will be right or close.

//Thread

bacchi

  • Magnum Stache
  • ******
  • Posts: 3881
Re: Ray Dalio & the Three Big Issues
« Reply #2 on: September 09, 2019, 10:10:46 AM »
I woulda thought that being a market prognosticator would be more difficult now, what with the internet storing everything you write or say.

He forgot climate change.

Buffalo Chip

  • Pencil Stache
  • ****
  • Posts: 517
  • Location: Tidewater Virginia
Re: Ray Dalio & the Three Big Issues
« Reply #3 on: September 09, 2019, 10:38:29 AM »
I understand the reluctance to listen to doomsday scenarios. They do get tedious.  A couple of really smart investors have been sounding the alarm lately.  Michael Burry and Ray Dallio are two that lodge in my mind in recent days. They should be ignored as the stock market always goes up over time. You just have to be willing to wait it out.

Its true! I read it in a blog!


bacchi

  • Magnum Stache
  • ******
  • Posts: 3881
Re: Ray Dalio & the Three Big Issues
« Reply #4 on: September 09, 2019, 10:49:43 AM »
A couple of really smart investors have been sounding the alarm lately.  Michael Burry and Ray Dallio are two that lodge in my mind in recent days.
[bold added]

Anyone who recommends Blockbuster Gamestop as a great SCV buy loses all credibility. He's either ignorant or doing a pump&dump.

We'll know more tomorrow.

SwordGuy

  • Walrus Stache
  • *******
  • Posts: 5656
  • Location: Fayetteville, NC
Re: Ray Dalio & the Three Big Issues
« Reply #5 on: September 09, 2019, 02:49:56 PM »

We know from our history that really bad things can happen that can cause real economic disruption.   (That's not even including things like having a foreign country destroy or occupy large swaths of our country.)

So, knowing that, why wouldn't I have already planned for this?

That plan might be dropping the SWR down to 2%, cutting expenses by 25%, re-entering the workforce at 50% pay reduction, or whatever.

Seriously.    Is there anything new here?

ender

  • Magnum Stache
  • ******
  • Posts: 4827
Re: Ray Dalio & the Three Big Issues
« Reply #6 on: September 09, 2019, 02:58:50 PM »
Seriously.    Is there anything new here?

Yes, top is definitely in.

Wrenchturner

  • Bristles
  • ***
  • Posts: 352
  • Age: 31
  • Location: Canada
Re: Ray Dalio & the Three Big Issues
« Reply #7 on: September 09, 2019, 02:59:17 PM »
Seriously.    Is there anything new here?
Extremely low interest rates?  Excess demand fueled by said rates?

Buffalo Chip

  • Pencil Stache
  • ****
  • Posts: 517
  • Location: Tidewater Virginia
Re: Ray Dalio & the Three Big Issues
« Reply #8 on: September 09, 2019, 03:19:57 PM »

Anyone who recommends Blockbuster Gamestop as a great SCV buy loses all credibility. He's either ignorant or doing a pump&dump.

We'll know more tomorrow.

 How old is this recommendation?  Go check the 13F for his fund. Looks to me like they got rid of their holdings.

Thinking changes.

Scandium

  • Handlebar Stache
  • *****
  • Posts: 2211
  • Location: EastCoast
Re: Ray Dalio & the Three Big Issues
« Reply #9 on: September 09, 2019, 05:15:22 PM »
Seriously.    Is there anything new here?
Extremely low interest rates?  Excess demand fueled by said rates?
Yaaaaaawn. These idiots have been saying the same stuff since at least 2012. I sure hope they followed their own spiel and have been out of the market the last 7 years.

Radagast

  • Handlebar Stache
  • *****
  • Posts: 1544
  • Location: West of the Mountains, East of the Sea
  • One does not simply work into Mordor
Re: Ray Dalio & the Three Big Issues
« Reply #10 on: September 09, 2019, 07:55:25 PM »
I think Dalio is one of the most knowledgeable people out there on this subject, and I doubt he his a snake-oil vendor because apart from being way too enduring and successful and apparently saying things only because he thinks they are good advice at this stage of his life, he is also such an incredibly boring writer that he could never sell even one snake oil. 

That said, what's the big deal? The second half of the 1930's were a pretty great time to invest and retire [in the US]. The 4% rule worked swimmingly, and even 5%and 6% probably succeeded [in the US]. For 100% stocks, or 75/25, or even 60/40 you ended up fine [in the US]. Same thing for buying: it was a great part of any 15 year period passing through it to be making regular stock purchases [in the US].

Of course in many of the world's countries it was a terrible time for everything, but that was because World War 2 kicked the shit out of them. So I guess the big warning is not do that.

He also seems to be saying interest rates and bond yields might hit cyclical lows in the next decade. That is hard to say, but sounds plausible. I am not nearly as scared about that as about WW3. A 75% total world stock index 25% total US bond market index seems well suited to the 60 years following any of 1935-1939, excluding world wars.

He also seems to be saying higher taxes on the wealthy are coming. I support that line of action.

What to do in WW3 is far beyond the scope of stocks v bonds. But I guess gold and beans and a water filter might raise your odds fractionally.

Radagast

  • Handlebar Stache
  • *****
  • Posts: 1544
  • Location: West of the Mountains, East of the Sea
  • One does not simply work into Mordor
Re: Ray Dalio & the Three Big Issues
« Reply #11 on: September 09, 2019, 08:04:26 PM »
https://www.linkedin.com/pulse/diversifying-well-most-important-thing-you-need-do-order-ray-dalio?trk=related_artice_Diversifying%20Well%20Is%20the%20Most%20Important%20Thing%20You%20Need%20to%20Do%20%0Ain%20Order%20to%20Invest%20Well_article-card_title

If we are looking at Dalio pieces, the prediction one you posted is definitely one of the less useful. The article above is way better: "that which is unknown is much greater than that which can be known."

Radagast

  • Handlebar Stache
  • *****
  • Posts: 1544
  • Location: West of the Mountains, East of the Sea
  • One does not simply work into Mordor
Re: Ray Dalio & the Three Big Issues
« Reply #12 on: September 09, 2019, 08:27:12 PM »
Put another way, when I look at the late 1930's, I don't think OMG my retirement portfolio!. Instead I think, As long as we don't blow ourselves to fuckdom come everything is going to be OK!

Travis

  • Magnum Stache
  • ******
  • Posts: 2525
  • Location: South Korea
Re: Ray Dalio & the Three Big Issues
« Reply #13 on: September 09, 2019, 08:51:26 PM »
I woulda thought that being a market prognosticator would be more difficult now, what with the internet storing everything you write or say.

He forgot climate change.

Even with everything written on the internet available for reference and posterity, the financial web-o-sphere is notoriously forgiving for past bad advice or predictions.

Wrenchturner

  • Bristles
  • ***
  • Posts: 352
  • Age: 31
  • Location: Canada
Re: Ray Dalio & the Three Big Issues
« Reply #14 on: September 10, 2019, 06:34:38 AM »
I think Dalio is one of the most knowledgeable people out there on this subject, and I doubt he his a snake-oil vendor because apart from being way too enduring and successful and apparently saying things only because he thinks they are good advice at this stage of his life, he is also such an incredibly boring writer that he could never sell even one snake oil. 

That said, what's the big deal? The second half of the 1930's were a pretty great time to invest and retire [in the US]. The 4% rule worked swimmingly, and even 5%and 6% probably succeeded [in the US]. For 100% stocks, or 75/25, or even 60/40 you ended up fine [in the US]. Same thing for buying: it was a great part of any 15 year period passing through it to be making regular stock purchases [in the US].

Of course in many of the world's countries it was a terrible time for everything, but that was because World War 2 kicked the shit out of them. So I guess the big warning is not do that.

He also seems to be saying interest rates and bond yields might hit cyclical lows in the next decade. That is hard to say, but sounds plausible. I am not nearly as scared about that as about WW3. A 75% total world stock index 25% total US bond market index seems well suited to the 60 years following any of 1935-1939, excluding world wars.

He also seems to be saying higher taxes on the wealthy are coming. I support that line of action.

What to do in WW3 is far beyond the scope of stocks v bonds. But I guess gold and beans and a water filter might raise your odds fractionally.

Thank you for your insight.  I thought there was more to what he was saying and I appreciate that you spelled some of it out for me.

bthewalls

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Ray Dalio & the Three Big Issues
« Reply #15 on: September 10, 2019, 06:45:37 AM »
So do we just assume a short term market drop and recovery?  Is it impossible to experience considerable rising inflation, the paradigm change that dalio suggests is possible

New investors like me need to know this stuff whereas old timers don't really care lol

B

ender

  • Magnum Stache
  • ******
  • Posts: 4827
Re: Ray Dalio & the Three Big Issues
« Reply #16 on: September 10, 2019, 07:00:27 AM »
So do we just assume a short term market drop and recovery?  Is it impossible to experience considerable rising inflation, the paradigm change that dalio suggests is possible

New investors like me need to know this stuff whereas old timers don't really care lol

B

At some point in the future it is likely the market will drop.

People have been saying that drop is imminent for about 5 years now, so eventually the broken clocks will be right again.

The real question is whether or not you will change your strategy knowing that in the future, the market will likely drop.

maizeman

  • Magnum Stache
  • ******
  • Posts: 3634
Re: Ray Dalio & the Three Big Issues
« Reply #17 on: September 10, 2019, 07:08:23 AM »
So do we just assume a short term market drop and recovery?  Is it impossible to experience considerable rising inflation, the paradigm change that dalio suggests is possible

New investors like me need to know this stuff whereas old timers don't really care lol

B

In the long term the returns of stocks are resilient to inflation. Imagine if we experienced 100% inflation of salaries and prices this morning.

First, in nominal terms you and I would suddenly need twice as many (nominal) dollars to support ourselves.
At the same time, in nominal dollars every company's expenses would double.
However, those company's revenue and profits would also double.
Ultimately both stock prices and dividend payments would also double so we'd be able to meet our doubled spending needs.

The adjustment period isn't a lot of fun. Look at the 1970s. But it is survivable as long as your net worth isn't tied up in bonds.

To find stronger examples of inflation than the 1970s you have to look outside the US. These are also, in principle, survivable, but the problem is that once you start to get into examples of hyperinflation this can often become a sign of a failing government (see Weimar Republic), which is NOT a survivable situation either as a FIREee or a person still bringing in a paycheck. So I put government collapse, either associated with hyperinflation or other factors, in the same category as having a major war fought on your country's soil, which, as Radagast points out above, is going to be a major lifestyle disruption regardless of ones planned withdrawal rate or whether one is retired or continuing to work.

ChpBstrd

  • Handlebar Stache
  • *****
  • Posts: 1467
Re: Ray Dalio & the Three Big Issues
« Reply #18 on: September 10, 2019, 02:47:53 PM »
What is the incentive of a hedge fund manager who writes a blog at a cost of, say, $10,000 per hour.

Self expression or advertising?

Scandium

  • Handlebar Stache
  • *****
  • Posts: 2211
  • Location: EastCoast
Re: Ray Dalio & the Three Big Issues
« Reply #19 on: September 10, 2019, 04:27:50 PM »




New investors like me need to know this stuff

B

No you don't. Why would you? And regardless, even if you did need to know it you can't. Since nobody knows. These folks are just speculating as much as I could

bthewalls

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Ray Dalio & the Three Big Issues
« Reply #20 on: September 11, 2019, 03:05:37 PM »
Thanks folks.

Maizeman thanks for details about inflation....wasnít aware of the dynamics.

Learning

Barry

Wrenchturner

  • Bristles
  • ***
  • Posts: 352
  • Age: 31
  • Location: Canada
Re: Ray Dalio & the Three Big Issues
« Reply #21 on: September 11, 2019, 07:41:38 PM »
I didn't really interpret this article as stock market skepticism...  not entirely sure why it's being interpreted that way.

I'm looking for insight into the unknown territory of extra-low or negative rates in a low growth environment.  Seems we're pushing on a string economically and I'd love to have some idea of what is to come.  I'm sure if we knew where this was going as a society we wouldn't have articles like this in the first place.

Radagast

  • Handlebar Stache
  • *****
  • Posts: 1544
  • Location: West of the Mountains, East of the Sea
  • One does not simply work into Mordor
Re: Ray Dalio & the Three Big Issues
« Reply #22 on: September 11, 2019, 09:34:53 PM »
I didn't really interpret this article as stock market skepticism...  not entirely sure why it's being interpreted that way.

I'm looking for insight into the unknown territory of extra-low or negative rates in a low growth environment.  Seems we're pushing on a string economically and I'd love to have some idea of what is to come.  I'm sure if we knew where this was going as a society we wouldn't have articles like this in the first place.
I have to agree... Dalio is very familiar with history and is very specific in calling out 1935-1945. If you read "Big Debt Crises" you will not come away thinking he is calling crashes to stir up business. I am guessing that I am the only one here who has read it even though there is a free link in the post? (but it is one of the most boring accounts of exciting events ever written) But from the book he seems to be thinking along my lines, as the most emphasized part of the whole books says
"The worst thing a country, hence a countryís leader, could ever do is get into a lot of debt and lose a war because there is nothing more devastating. ABOVE ALL ELSE,
DONíT DO THAT."

Followed by graphs of economic statistics for winners and losers of wars that seem to be averages of several actual wars.

bthewalls

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Ray Dalio & the Three Big Issues
« Reply #23 on: September 12, 2019, 01:03:32 AM »
Radagast
I'm actually in middle of reading 'big debt crisis'....stuff I don't understand or items that I query I've started posting here.

Investing life savings in index funds over 10plus year period..fine..but I prefer to understand underlying dynamics and was drawn to the dalio studies. Also considered recent article about index funds getting saturated!?...what would that mean to us.....

Anyone suggest other reliable sources of reading for studying?

Barry

Maenad

  • Pencil Stache
  • ****
  • Posts: 507
  • Location: Minneapolis 'burbs
Re: Ray Dalio & the Three Big Issues
« Reply #24 on: September 12, 2019, 05:54:31 AM »
I am guessing that I am the only one here who has read it even though there is a free link in the post? (but it is one of the most boring accounts of exciting events ever written)

Bolding mine, because that's saying something for a Tolkien fan. /OT

Buffalo Chip

  • Pencil Stache
  • ****
  • Posts: 517
  • Location: Tidewater Virginia
Re: Ray Dalio & the Three Big Issues
« Reply #25 on: September 12, 2019, 07:26:47 PM »
https://www.linkedin.com/pulse/diversifying-well-most-important-thing-you-need-do-order-ray-dalio?trk=related_artice_Diversifying%20Well%20Is%20the%20Most%20Important%20Thing%20You%20Need%20to%20Do%20%0Ain%20Order%20to%20Invest%20Well_article-card_title

If we are looking at Dalio pieces, the prediction one you posted is definitely one of the less useful. The article above is way better: "that which is unknown is much greater than that which can be known."

Thanks for the link. An excellent read.

bthewalls

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Ray Dalio & the Three Big Issues
« Reply #26 on: September 13, 2019, 01:12:45 AM »
I see ecb has restarted quantitative easing to stimulate....not a great sign for Europe

Barry

Buffalo Chip

  • Pencil Stache
  • ****
  • Posts: 517
  • Location: Tidewater Virginia
Re: Ray Dalio & the Three Big Issues
« Reply #27 on: September 13, 2019, 04:34:22 AM »
I see ecb has restarted quantitative easing to stimulate....not a great sign for Europe

Barry

How much longer does the ECB push on a string before they decide it isnít working? The underlying problems in my opinion are demographic ones. An aging population with high public social costs is not a great prescription for long term economic growth.

bthewalls

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Ray Dalio & the Three Big Issues
« Reply #28 on: September 13, 2019, 05:35:30 AM »
I read....and I'm only learning so go easy!....these market cycles, QE,  dropping interest to near zero and subsequent inflation and currency devaluation are all just on going cycles...'big debt crisis ' is very informative.

It seems society doesn't learn and it will continue like this...maybe not a bad thing if you can time a market drop a bit...

Barry

Wrenchturner

  • Bristles
  • ***
  • Posts: 352
  • Age: 31
  • Location: Canada
Re: Ray Dalio & the Three Big Issues
« Reply #29 on: September 13, 2019, 08:44:30 AM »
I read....and I'm only learning so go easy!....these market cycles, QE,  dropping interest to near zero and subsequent inflation and currency devaluation are all just on going cycles...'big debt crisis ' is very informative.

It seems society doesn't learn and it will continue like this...maybe not a bad thing if you can time a market drop a bit...

Barry
I'm not really even worried about a recession --im more worried that it seems recessions are no longer permitted by central bankers.

bwall

  • Pencil Stache
  • ****
  • Posts: 573
Re: Ray Dalio & the Three Big Issues
« Reply #30 on: September 13, 2019, 09:14:24 AM »
I see ecb has restarted quantitative easing to stimulate....not a great sign for Europe
How much longer does the ECB push on a string before they decide it isnít working? The underlying problems in my opinion are demographic ones. An aging population with high public social costs is not a great prescription for long term economic growth.

Demographics: Great point. Merkel tried to import about one million young workers, but it didn't go very well.

The biggest irony of all will be upon us in about ten years: China will have a labor shortage and all the headaches that come with aging population, shrinking workforce, zero growth. They will not have attained rich world status by then. The Party is in a mad race against the clock.  On a bright note, cities in China will not be as crowded as they are now.

maizeman

  • Magnum Stache
  • ******
  • Posts: 3634
Re: Ray Dalio & the Three Big Issues
« Reply #31 on: September 13, 2019, 12:40:56 PM »
I'm not really even worried about a recession --im more worried that it seems recessions are no longer permitted by central bankers.

At a surface level it would seem that if central bankers really could simply eliminate recessions that would be a good thing. So I'm guessing you are actually saying you are worried there is some unintended consequence to that potential abolition of recessions.

Could you elaborate a bit more on what specific consequences you are envisioning?

Wrenchturner

  • Bristles
  • ***
  • Posts: 352
  • Age: 31
  • Location: Canada
Re: Ray Dalio & the Three Big Issues
« Reply #32 on: September 13, 2019, 02:13:56 PM »
I'm not really even worried about a recession --im more worried that it seems recessions are no longer permitted by central bankers.

At a surface level it would seem that if central bankers really could simply eliminate recessions that would be a good thing. So I'm guessing you are actually saying you are worried there is some unintended consequence to that potential abolition of recessions.

Could you elaborate a bit more on what specific consequences you are envisioning?
Price discovery is useful.  Continually lowering rates produces excess demand and distorts markets.  An economy that never has a downtrend is a dangerous one.

If bad investments never fail, they parasitize on the real, healthy economy.

maizeman

  • Magnum Stache
  • ******
  • Posts: 3634
Re: Ray Dalio & the Three Big Issues
« Reply #33 on: September 13, 2019, 04:57:23 PM »
Price discovery is useful.

Could you elaborate on what you mean here? I agree price discovery is useful, and in fact essential to our economic system. I'm just not sure I see the connection to recessions or the lack thereof.

Quote
Continually lowering rates produces excess demand and distorts markets.

Okay, this point I do agree with. I'm not sure it is an inherent property of the absence of recessions, but keeping interest rates artificially low is definitely doing weird things to investment. It has also let public debt grow at a frightening pace (and not to invest in infrastructure or R&D or other things with long term payoffs, just to fund existing spending with lower taxes).

Quote
An economy that never has a downtrend is a dangerous one.
This would appear to be just a restatement of your original comment "I'm more worried that it seems recessions are no longer permitted by central bankers." What I am curious about is why you believe this to be the case?

Quote
If bad investments never fail, they parasitize on the real, healthy economy.

True, but are recessions necessary in order for bad investments to fail?

Look at Theranos or MoviePass. Sure maybe they would have failed earlier if they'd hit a recession at the wrong time, but a consistently expanding economy wasn't enough from keeping fraud and the absence of any sort of profitable business model (respectively) from ultimately leading to failure.

PDXTabs

  • Handlebar Stache
  • *****
  • Posts: 1245
  • Age: 36
  • Location: Vancouver, WA, USA
Re: Ray Dalio & the Three Big Issues
« Reply #34 on: September 13, 2019, 05:16:11 PM »
If bad investments never fail, they parasitize on the real, healthy economy.

True, but are recessions necessary in order for bad investments to fail?

Look at Theranos or MoviePass. Sure maybe they would have failed earlier if they'd hit a recession at the wrong time, but a consistently expanding economy wasn't enough from keeping fraud and the absence of any sort of profitable business model (respectively) from ultimately leading to failure.

I'm with Wrenchturner on this one: 13% of the world's companies are 'zombies.' That's not healthy.

maizeman

  • Magnum Stache
  • ******
  • Posts: 3634
Re: Ray Dalio & the Three Big Issues
« Reply #35 on: September 13, 2019, 05:24:31 PM »
If bad investments never fail, they parasitize on the real, healthy economy.

True, but are recessions necessary in order for bad investments to fail?

Look at Theranos or MoviePass. Sure maybe they would have failed earlier if they'd hit a recession at the wrong time, but a consistently expanding economy wasn't enough from keeping fraud and the absence of any sort of profitable business model (respectively) from ultimately leading to failure.

I'm with Wrenchturner on this one: 13% of the world's companies are 'zombies.' That's not healthy.

No argument here. But in reading the article it sounds like the author is arguing that what is creating and sustaining zombie companies is low interest rates specifically.

I'm not arguing that our current worldwide economic situation is a healthy or sustainable one. Just trying to figure out if there is a strong argument for recessions themselves being inherently necessary for a healthy and functional economy, or if it is the only specific side effects of the mechanism being used to stave off recession (low interest rates) which are the problem.

PDXTabs

  • Handlebar Stache
  • *****
  • Posts: 1245
  • Age: 36
  • Location: Vancouver, WA, USA
Re: Ray Dalio & the Three Big Issues
« Reply #36 on: September 13, 2019, 05:33:31 PM »
No argument here. But in reading the article it sounds like the author is arguing that what is creating and sustaining zombie companies is low interest rates specifically.

I'm not arguing that our current worldwide economic situation is a healthy or sustainable one. Just trying to figure out if there is a strong argument for recessions themselves being inherently necessary for a healthy and functional economy, or if it is the only specific side effects of the mechanism being used to stave off recession (low interest rates) which are the problem.

Well, you need low interest rates and a bank willing to lend to you. In recessions banks get skittish about loaning money to marginal companies. I suppose you could simulate that without a recession, but it might well cause one.

Wrenchturner

  • Bristles
  • ***
  • Posts: 352
  • Age: 31
  • Location: Canada
Re: Ray Dalio & the Three Big Issues
« Reply #37 on: September 13, 2019, 05:38:18 PM »
(nested quotes)

Why are recessions useful?  Mean reversion, I guess?  I'm not an economist and I'm not well versed in this stuff.  But it seems to me markets like housing or equities tend to overheat on the way up and benefit from periodic corrections.  This stabilizes buying power to some degree.  High priced stuff is great but the affordability is also a concern for the sustainability of said markets.   How many buyers of stock already did well in stocks?  How many buyers of property already did well in property?  Are there any fresh buyers, or is it just low cost credit fueling demand where it isn't needed?  Canada is considering government policy to share equity for downpayments for houses up to $800k.  (and yet our carbon tax kicks in for anyone earning over $47k/year).

Why is a recession-proof strategy bad?  Well, because recessions and downtrends are an inevitability.  It's sort of like the "too big to fail" argument.  Everything fails at some point.  If it's too big to fail it means the moral hazard has become extraordinary.  And it is the continual lowering of rates that is feeding this, not simply inaction.  If we were seeing the economy grow with stable interest rates and central banks NOT buying bonds, we could presume it's healthy.  But we can't even see the risk at all when it's being papered over like this.

Recessions are not necessary for bad companies to fail but I'm sure they help the process.

Also--we should be able to handle a recession.  I think the reason no one wants to go near one is contagion or some sort of house-of-cards situation where everything will break all at once if anyone stops dancing to the music.