Skip to comments.Stocks dead, bonds deader till 2022: Pimco
Posted on 11/28/2012 11:00:14 AM PST by ExxonPatrolUs
SAN LUIS OBISPO, Calif. (MarketWatch) Big money managers are warning investors. Theyre now citing the Bible: Seven lean years. No recovery till 2016. That was Jeremy Grantham back a few years ago. His GMO firm manages $104 billion.
Now Bill Gross and Mohamed El-Erian, the co-CEOs at the $2 trillion Pimco money managers, are citing the same biblical warning to jar investors awake and prepare for the coming lean years of slow, low growth and austerity. Except in Pimcos new warning, the future just got much, much darker for investors no recovery until 2022.
Earlier in the summer back when most investors were totally distracted by campaign drama and betting heavily on a new president, anticipating a post-election bull market many were expecting Corporate America would unleash trillions in hoarded reserves, stimulate a recovery and new bull. Back then, Reuters, Forbes, CNBC, Bloomberg, the Wall Street Journal and rest of the obsessed media simply yawned at Gross and El-Erians warning that equities hit a dead end in terms of significant appreciation.
Dead end? No recovery till after the 2020 elections? Yes, one angry headline even said Gross was faithless with stocks. Why? Conventional wisdom tells us markets run in cycles. So investors believe its now time for a new bull. Gross and El-Erian disagree.
Warren Buffett and Jack Bogle first mentioned a new normal with slow, low growth back in 2002. It fell on deaf ears. Since the 2008 meltdown the same warnings are coming from gurus like Grantham, Gross, El-Erian and others. Ignore their warnings at your peril.
(Excerpt) Read more at marketwatch.com ...
I used to keep 95% in stocks.
I’m at my historic low of 50% stock / 50% cash and short bonds.
There’s nowhere in the world to make money with an optimistic outlook.
The whole world is pursuing horrible economic policy.
Until someone somewhere rejects Keynesianism, we’re all going to just feel lousy, earn no money, and be underemployed, and fight one another for scraps.
Democrats will love it, because Envy is their primary political tactic. Creating wealth is not their goal. Creating Envy is their goal.
We are not coming back.
stick a fork in it
I see PIMCO has taken a short position on the market and is trying to make sure they can cash in.
What the hell, someone has to be right. If you poll three economic analysts, you can get five opinions, plus or minus one.
Hahaha, no doubt.
What I find stunning is the level of ambivalence the stock market has had for the terrible economic conditions worldwide. The market is trading like nothing is wrong in the world.
The idea that there is a mass of corporate cash reserves is another myth spouted by the Wall Street lackeys over at Fox Business News, CNBC and Bloomberg. If that were so why not funnel all those reserves into big dividend payouts?
I’m still at 98% aggressive stock. I will probably revisit that in the next few weeks.
Someone studied this a while ago. People will keep trading stocks well beyond the point of no return, no matter how well informed, not stopping until the inevitable crash is imminent.
If you wish to agree with me on “It’s the Spending, Stupid”, then I’m in full agreement with you.
The government’s mal-spending must be paid for in some manner; taxes, inflation, etc. You can give people tax cuts and increase spending, the only problem is your currency becomes worthless. Ya done gonna havta pay the piper somehow!