Wednesday, June 30, 2010

Bill Gross - "Bond Markets Priced for a Depression"

I have had some issues with Bill Gross over the years though there is no denying he is a great investor. Mainly I felt like he was one of the prominent voices last year cheering on the spending that I felt would make the mess worse just a little ways down the road. Well he has seen the light. Very good monthly outlook from Pimcos Bill Gross.

Starts out with a doozy of a first sentence.

Global financial market returns stand at the threshold of mediocrity. With bonds priced not for recession but near depression, most major global bond indices now yield less than 3%, surely a forerunner of returns to come.

and he is right here (how many times have I said this over the past 2 years?)

It is this lack of global aggregate demand – resulting from too much debt in parts of the global economy and not enough in others – that is the essence of the problem

The entire thing is very good.

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