Bill Gross has been pretty bummed out lately. Sure, he’s got a conference room and award named for him at PIMCO. But he’s getting divorced, covered in Jeff Gundlach’s shade, torturing his children around the dinner table and wasn’t permitted to single-handedly save the country—which is going to hell in a handbasket under the combined stewardship of President Trump and Federal Reserve Chair Janet Yellen. In fact, the only thing that might yet preserve the union is that the damage wrought by the two might cancel each other out. Wait, they’re working together? Oh no. All hope is lost.
"Capitalism’s arteries are now clogged or even blocked by secular forces which when combined with low/negative yielding 'safe' assets promise to stunt U.S. and global growth far below historical norms," Gross said….
"These sectors in fact, have long-term maturities and durations of their liabilities, and their assets have not risen enough to cover prior guarantees, so we see Puerto Rico, Detroit, and perhaps Illinois in future years defaulting in one way or the other on their promises to constituents," he said. "Faulty finance-based capitalism supported by the increasingly destructive monetary policy begins to erode, not support the real economy…."
"'Making money with money' is seriously threatened. How soon this takes place is of course the investor’s dilemma, and the policymakers’ conundrum. But don’t be mesmerized by the blue skies created by central bank QE (Quantitative Easing) and near perpetually low interest rates. All markets are increasingly at risk."