Posted by Davy Bui on July 3rd, 2009 in Gurus, Worth Reading (links to articles, etc.)
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Bill Gross and Mohamed El-Erian, the top honchos at PIMCO along with Paul McCulley, see dim prospects for the US economy.

Mohamed El-Erian is CEO and co-chief investor for PIMCO, after Bill Gross and company lured him back from Harvard’s endowment fund. He is also the author of When Markets Collide, a macro look at the economies and markets now confronting investors. His editorial in today’s Financial Times warns investors that unemployment is worse than it looks (and it looks bad at 9.5% and rising):

El-Erian: American jobs data are worse than we think

All this talk of green shoots and recovery suggests investors and pundits are still stuck in projecting past experience into the future — they can’t grasp the notion that economic behavior has been fundamentally altered on some meaningful level.

PIMCO regularly holds macro outlook brainstorming sessions and the consensus view must be decidedly negative once you combine El-Erian’s editorial with Bill Gross’ latest investment outlook. If Gordon Gekko’s famous line that “greed is good” served as the motto of the last bull market, Gross finds greed now in full retreat and retrenchment will be the predominant theme for a generation.

When it comes to PIMCO, they are the 800 lb. gorilla and for good reason: they deliver results year after year. It would be foolish to not take their viewpoints into serious consideration

Bill Gross’ July 2009 Investment Outlook: “Bon” or “Non” Appétit?

El-Erian: American jobs data are worse than we think