Dalio said the biggest risks he sees are in the corporate debt market, which he said has increased a lot, with a lot of funding going to private equity firms.
Mostly true True in substance, wrong in a detail.
Factual: Statements about the present or the past, checked against the record: did they hold up?
The second judge would not resolve this claim; the verdict shown is the first judge's.
What would count as true or false
Two parts. (1) Dalio stated on or around 2018-11-11 that he saw the biggest risks in the corporate debt market. (2) Corporate debt had in fact increased substantially, for example US nonfinancial corporate debt or leveraged loans at or near record levels relative to GDP, with significant credit going to private-equity-backed borrowers. True: both hold. Mostly true: he said it and corporate debt had grown markedly, but a secondary detail is overstated, such as the share going to private equity. Mixed: he said it, but data show corporate debt growth was only modest. Mostly false or false: the statement is misattributed, or corporate debt had not increased meaningfully.
Set before the research began.
Evidence (4)
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E1 Financial Stability Report Board of Governors of the Federal Reserve System · 28 November 2018
“After growing faster than GDP through most of the current expansion, total business-sector debt relative to GDP stands at a historically high level. However, growth of this debt slowed markedly in the first half of 2018 (figure 2-3).”
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E2 Financial Stability Report Board of Governors of the Federal Reserve System · 28 November 2018
“On net, total risky debt rose about 5 percent over the year ending in the third quarter of 2018 and now represents over $2 trillion in debt outstanding.”
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E3 Financial Stability Report Board of Governors of the Federal Reserve System · 28 November 2018
“However, over the past several years, total debt owed by businesses and households expanded at a pace similar to that of nominal GDP.”
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E4 Financial Stability Report Board of Governors of the Federal Reserve System · 28 November 2018
“The share of bonds rated at the lowest investment-grade level (for example, an S&P rating of triple-B) has reached near-record levels.”
Reasoning
The Federal Reserve's November 2018 Financial Stability Report says total business-sector debt relative to GDP was at a historically high level after growing faster than GDP for most of the expansion (E1). It also says risky debt exceeded $2 trillion (E2) and that the share of triple-B bonds was near record levels (E4). The same report notes that growth in business debt slowed markedly in the first half of 2018 and that total private debt grew roughly in line with GDP (E1, E3). None of the evidence shows how much credit went to private-equity-backed borrowers, and no item independently records Dalio's statement, so the claim is rated mostly true rather than fully true.
Cite this claim
Ray Dalio, “Dalio said the biggest risks he sees are in the corporate debt market, which he said has increased a lot, with a lot of funding going to private equity firms.” (said 11 November 2018). Verdict: mostly true. Reliability API, claim c_bffde52684ab, method 0.1.0+c876030c, dataset release v1.1.2. https://epistacklabs.com/claims/c_bffde52684ab
This claim is in dataset release v1.1.2, with the same verdict.
Reply to this claim
More factual claims by Ray Dalio
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Mostly false
“That has been true through all history.”
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Mostly true
“So when we look at history, we see that in all such periods, all the fiat currencies go down, okay?”
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Mostly true
“It takes in about $5 trillion, so it spends 40% more than it takes in.”
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Mostly true
“you could still have financial problems, like the breakdown of the monetary system in 1971, okay?”
The monetary system broke down in 1971 while the United States was still a dominant power.
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Resolved true
“one-third of our debt is held by foreigners, so that’s a different thing.”
Verdicts are made automatically; how verdicts are made.