PIMCO: El-Erian on the Secular Outlook

Economic Outlook

May 2011

Article Title

Secular Outlook:
Navigating the Multi-Speed World

Article Introduction

• Balance sheets, both across and within economies, are still out of
  equilibrium. We expect advanced economies will face sluggish growth and
  persistently high unemployment over the secular horizon. Emerging
  economies will achieve higher growth but face recurrent inflationary
  concerns.
• We do not expect policymakers to boldly address structural problems.
  By targeting negative real interest rates, they will pursue financial
  repression that undermines the “real return” contract that savers
  expect.
• Secular baseline portfolio positioning should minimize exposure to
  the negative impact of financial repression, hedge against higher
  inflation and currency depreciation and exploit the heightened
  differentiation in balance sheets and growth potentials.

the article and a PDF are available Here

Money Illusionn or How the Government Really Gets In Your Pocket

Bill Gross of Pimco the manager of the largest bond fund in the world has recently ( and rightly) been ranting about Washington and the failure to deal with the US debt buildup. Most recently Pimco has discussed the stock market and "money illusion".  I wrote a short note on what he meant. Available here: 

money illusion  at  Scribd.com