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While You Were Working – March 22

Bridgewater dissects populism, warnings signs in Saudi Arabia, LSE-Deutsche Boerse prepares to RIP and Notre Dame sells out

3 min read

Modern Money

Oil rig

Can Saudi Arabia de-bloat its bureacracy? - Photo credit: Joe Raedle/Getty Images

Ray Dalio said populism is muscling out monetary and fiscal policy

The brain trust at Bridgewater Associates weighed in with this fascinating analysis of the history of populism around the world. They offered some keen insight on the evolving relationship between populism and fiscal and monetary policies.

“Given the extent of it now, over the next year populism will certainly play a greater role in shaping economic policies. In fact, we believe that populism’s role in shaping economic conditions will probably be more powerful than classic monetary and fiscal policies (as well as a big influence on fiscal policies). It will also be important in driving international relations. Exactly how important we can’t yet say.”

As the Bridgewater crew dissects what they call the “populist playbook,” I think they could have done a better job of drawing the connection between poor fiscal and monetary policies and the rise of populism. Fiscal and/or monetary policy missteps, like the ones the world witnessed during and in the aftermath of the Great Financial Crisis, often create fertile soil for populism to bloom.

Fitch made the Saudi Aramco IPO a bit more interesting

Apparently, Fitch Ratings isn’t quite sure Saudi Arabia’s plan to wean itself from the teat of petro dollars is going to work smoothly. Fitch knocked the Kingdom’s credit rating down from AA- to A+. Fitch even went so far as to identify the reason for its skepticism.

“The scale of the reform agenda risks overwhelming the government’s administrative capacity.”

Saudi Arabia’s bureaucracy is bloated and heavily dependent on energy revenue. That revenue has already started drying up and it is hard to see why the bureaucracy would help pick up a blow dryer and quicken the pace of the drying.  

The EU prepared to have the LSE-Deutsche Boerse deal drawn and quartered

From the world of things that aren’t all that shocking, news is dripping out of Brussels that the EU is set to officially veto the tie-up between Deutsche Boerse and the London Stock Exchange.

This sounded a lot like Theranos

The idea that consumers can prick their finger and send in a blood sample to get a personalized diet plan sounds like it makes sense. It also sounds suspiciously like another Theranos in the making. I have no idea. Maybe Habit is awesome. But if you use Habit and are less than thrilled when your science-based diet advice consists of “Exercise more and eat your greens” … don’t say you were never warned.

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