Salient to Investors:

Bill Gross at Pimco said:

  • If central banks can convince investors that their policies can reproduce the old normal economy, then risk assets will have higher future returns and outperform cash, trickling down to respectable growth rates and lower global unemployment.
  • Central banks must shift to qualitative forward guidance from quantitative guidance focused on unemployment rate thresholds that are about to be breached.
  • Central banks must have credibility or else the entire array of asset prices at the extremities is at risk.
  • Carry trades in numerous forms should be profitable in 2014.
  • As QE ends in the US, liquidity in corporate bonds will be challenged and if inflation appears then assets may indeed be mispriced.

Economists expect US GDP growth of 2.9 percent in 2014.

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