Bill Gross, in his monthly 'Investment Outlook' letter for July: "Dear President Obama: You have inherited a mess. Your predecessor, fixated on emulating a former Republican icon from a far different economic era, chose to emphasize tax cuts for the rich and excessive consumption for all Americans. He promoted deregulation and free markets when, in fact, the markets and their institutions needed tough love. Over eight years, he failed to put forth a coherent energy policy. He needlessly invaded Iraq and lowered worldwide esteem for this nation as a symbol of freedom and benevolence. But enough about Wâs spilt milk. Iâve already ticked off so many readers that theyâre questioning my Republican Party voter registration. What do I think you should do as the new President to rectify this mess? All I know is that any solution will come with a high price tag. Although your campaign slogan says âYes we can,â I have my doubts. Granted, youâre going to raise tax rates on the rich, give a break to the lower/middle class and rebalance the scales of economic justice somewhat. I myself wonât enjoy paying that near 50 percent marginal tax rate after you remove the current cap on the payroll tax, but my wealthy neighbors and I in Newport Beach should just look at it this way: weâve had an eight-year lease extension on the âhigh life.â Now itâs time to give something back and I suspect we wonât be working any less hard. That olâ Laffer Curve has a certain logic to it, but it only makes sense at the upper margin. People did work less at confiscatory tax rates imposed pre-Thatcher/Reagan but once they got down to 50 percent or lower, it was all gravy â promoting conspicuous consumption as opposed to higher productivity and overtime at the office. Gosh, now we donât even want those oversized trophy houses! The New York Times reports that the high-profile crowd now favors small ecologically certified âLEEDâ houses â âLeadership in Energy and Environmental Design.â My, what green eyes we have, Grandma! Anyway, so youâre gonna do the tax thing, Mr. President, and throw in some form of universal healthcare to boot that your buddy Hillary will help spearhead. You hope you can get a lot of this passed despite a potentially long string of filibusters from a Senate that wonât quite have sixty Democrats. In addition, youâll need to provide some immediate relief to homeowners in the form of FHA (Federal Housing Administration) subsidies and low mortgage rate loans that somehow have been studied and studied in Congress for the past six months yet still havenât been passed into law. By January, home prices will be down another 10 percent or so and our Japanese-style property deflation will be in full stride. Congress will have had its summer recess though and spent September and October on the campaign trail. They had to get re-elected you know, so those homeowners just had to wait. http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+July+2008.htm
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+July+2008.htm I wrote a post similar to this over the weekend... in the ES Journal and it was deleted.. keywords 1) ponzi 2) caffeine 3) asset-based economy 4) fiscal spending lol..
Wow, what a moron for writing that. I guess when you make enough money you lose your mind eventually.. I bet he wouldn't have written this had pimco been in its infancy..douch.
Why? He pretty much summed up what the next president will have to deal with and what we have in front of us right now.
Bill loves cock.. seriously, I wish I was Bill, except for the fact that he loves cock. He might not be gay, but with that very high tone in his voice, it appears that he wore his pants too tight in the 70's, or his daily yoga routine has destroyed his balls.. Again, I wish I was him..minus the homo thing..
oh, and another thing.. the last thing our current situation has in common with it is a 'Japanese Style Deflation'... He's so wrong about this, and he knows better.. The Japs didn't have the reserve currency of the world They didn't have enormous debt and deficit and they were net savers... The current environment is an inflationary one..period... The bond market is controlled by the Fed and the Towel heads.. and he sure would loooove a deflationary environment to keep punting shitty fixed income... Anything else?