Salient to Investors: Bill Gross at Pimco said the Fed can do nothing but continue its accommodative monetary policies even with the U.S. economy adding more jobs than forecast last month. Pimco bought Spanish and Italian bonds on speculation that Draghi will come to the rescue. Mohamed El-Erian at Pimco said
READ MORE... →Salient to Investors: Bill Gross at Pimco said: Investment is not being incentivized by QE. Lower interest rates are being used to consume as opposed to invest, and the money created and freed up is elevating asset prices, but corporations are not investing in future production. Asset and currency prices ultimately rest on economic growth, so
READ MORE... →Salient to Investors: Speculators lowered bullish bets on commodities for the third straight week, the longest streak since April. Copper holdings fell the most in seven weeks, and sugar wagers dropped to a one-month low. Bullish bets on gold slumped the most in three months. Donald Selkin at National Securities Corp said
READ MORE... →Salient to Investors: Bill Gross at Pimco said: Structural headwinds in terms of economic growth, the budget deficit, and the fiscal cliff will dominate the economic debate no matter who wins the election – meaning lower growth due to the excessive debt and leverage built up over 10 or 20 years. Future annual
READ MORE... →Salient to Investors: The days of instant rewards from the stock market are over. Larry Fink at Blackrock says be 100% in equities, prefers stocks to bonds. Bill Gross at Pimco says the cult of equities is dead but sees stocks offering double the nominal return of bonds over the next several
READ MORE... →Salient to Investors: Homeowners, cities and companies are cutting borrowing, undermining the downgrading of the nation’s credit rating. Total indebtedness – including federal and state governments and consumers – is at 3.29 times GDP, the least since 2006 versus a peak of 3.59 four years ago. Private-sector borrowing is down by $4 trillion to
READ MORE... →Salient to Investors: Michael Feroli at JPMorgan Chase said the jobs report is a setback for the labor market and the economy and validates Bernanke’s concern. Bill Gross said the Fed will likely ease further through “open-ended” purchases of Treasuries and mortgages and extend its pledge to keep interest rates low
READ MORE... →Salient to Investors: Pimco’s Bill Gross said: Investors face an age of inflation, a headwind for both stocks and bonds. The cult of equity was dying, and long-term equity returns of 6.6 percent above inflation – the Siegel Constant – won’t be seen again. Institutional investors will find the highest returns in countries with faster growth
READ MORE... →Salient to Investors: PIMCO’s Bill Gross said a debt trap remains even after the European agreement, continues to avoid the debt of nations including Spain and Portugal in favor of U.S. Treasuries and mortgage securities. Gross said both the peripherals and the core union nations have too much debt, whose marginal cost
READ MORE... →Salient to Investors: The bid-to-cover ratio for 7-year Treasuries securities was the lowest since October. Marc Ostwald at Monument Securities said it’s very important to focus on the personal consumption and expenditure. Ira Jersey at Credit Suisse said it’s hard to like these yields unless you think there’s going to be a significant
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