Digging into the showdown at Pimco between Mohamed El-Erian and Bill Gross, with Peter Mirijanian, Peter Mirijanian Public Relations, and CNBC's Bill Griffeth.» Read More
A diverse set of circumstances and potential economic outcomes around the globe are forcing investors to take an equally diverse approach to investing, Pimco's Mohamed El-Erian said.
This week's market action serves as a vivid reminder of how dependent valuations are on central bank policies, and especially the aggressive provision of liquidity by the Federal Reserve and the European Central Bank.
An extended period of "financial repression"—brought on by low interest rates—means investors will have to do what they can to get income while keeping up a strong defense against global slowness, Pimco's Mohamed El-Erian told CNBC Monday.
"We are living in a financial repression right now," says Mohamed El-Erian, PIMCO CEO & co-CIO, sharing insight on the Greek default, the euro zone crisis, and the outlook for the markets and economy.
One of the challenges investors face today is how to reconcile seemingly conflicting messages coming from different markets. Is Dow 13,000 consistent with a 10 year U.S. Treasury at 2% and gold at almost $1,800? Is $125 Brent oil consistent with cyclically low implied volatility in many market segments, as well as widening CDS spreads for Middle Eastern oil producers?
This year's market gains will need more than an improving economic picture and investor willingness to shrug off Europe's debt crisis, Pimco's Mohamed El-Erian told CNBC.
The health of the global economy, and that of markets, depends on the success of a series of medium-term handoffs between the public and private sectors – in growth, balance sheets and credit flows.
It is unclear the extent to which the downgrades will alter the function of the international monetary system over time. It is also unclear how material the incremental headwinds blowing out of Europe will be for countries already facing internal fragilities.
Despite a steady flow of positive economic news, fears over European debt contagion have prevented investors from believing that a recovery has taken hold, Pimco's Mohamed El-Erian told CNBC.
The International Monetary Fund (IMF) should resist pressure from European Union leaders to take part in inadequate bailout programs for European countries, Mohamed El-Erian wrote in the Financial Times.
As a New York Jets fan, I despair of all the talk about the New England Patriots. I desperately want to wish the Patriots away, but I cannot. They matter. When it comes to Europe, investors around the world also face this exasperating combination of having, but not wishing to pay close attention.
Jim Cramer has brilliantly posed the most important question facing the markets today when thinking about the impact of Europe: "Is there too much hope here?"
The stories that may well materialize in the next few weeks will be more heavily influenced by what happens this week to Europe's latest yield curve inversion, core bond rates, and policy announcements.
Signals of market stress are increasing, with a growing number of measures now flashing yellow and some on the verge of flashing red. The longer this persists, the greater the risk of very large market moves - in either direction, depending on the economic and financial catalysts.
Policymakers have taken the wrong approach in dealing with the global economy's numerous problems, shuffling debt around while avoiding making difficult decisions, Pimco's Mohamed El-Erian said.
Mohamed El-Erian, PIMCO CEO, discusses the consequences of running an economy on low interest rates. "Cash has optionality value that people always underestimate," he adds.
The market and global economy have lost their anchors, including the US losing its credit rating, Switzerland losing is "safe-haven" status, and the European banks in crisis, says Mohamed El-Erian, PIMCO CEO & co-CIO. "The reality is the dog is Europe," he adds.
Mohamed El-Erian, PIMCO CEO & co-CIO, describes signs of what he calls tectonic shifts in the global economy.
Federal Reserve Chairman Ben Bernanke's speech Friday is a "warm-up act" to President Obama's Sept. 5 speech outlying his jobs program, Pimco CEO Mohamed El-Erian told CNBC Thursday.
After Monday’s gut wrenching 635 point fall, the Dow Jones index surged an impressive 430 points on Tuesday. In the process, investors experienced a wild 640 point intra-day roller coaster! Gold prices set another record while Treasury yields fell sharply, with the 2-year closing at an eye popping 0.2% and the 5-year at an equally stunning 1.0 percent.