Latest from Bill Gross

Bill Gross monthly commentary is finally here. He was running late a few days more than normal. Can be read here.

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+December.htm

The publicized and photographed overnight "runs" on Countrywide and the UK’s Northern Rock in mid-August were nothing compared to what’s taking place in the shadows of the real banking system. Credit contraction, with its inevitable companion of asset destruction, is spreading with the speed of an infectious bacterial disease.

and

First of all, history would point out that Fed easing cycles during prior recessionary or near recessionary economies have invariably dropped to 1% Fed Funds rates when calculated on a "real" or inflation-adjusted basis. With PCE core levels at 2%, a destination of 3% would therefore be a reasonable current target.

and

Standby for a tumultuous 2008 as the market struggles to move from the shadows back into the sunlight of sounder banking and financial management, accompanied by Fed Funds levels at 3% or lower.

Several of Bill Gross comments over the past month has almost made Jeremy Grantham sound like a raging bull.