Mohamed El-Erian is the master of metaphors.
In the opening panel at the Milken Institute Global Conference, I lost count at four El-Erian metaphors. By far the best, or at least the most entertaining, was his description of investing as a surfing contest.
"You are out there waiting for the right wave," El-Erian said. "You want to wait for the right wave, but you can't wait forever. If you wait too long, the contest ends and you lose."
The wave of the moment, of course, is central bank liquidity. And everyone is riding it.
"It's a really crowded, artificial wave," the CEO of Pimco said.
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Extraordinary central bank activity means that markets become very distorted, price signals no longer function because there is a large "noncommercial player"—as El-Erian put it—in the markets.
"We're facing a 50-50 outcome," El-Erian said. "It all depends on whether genuine growth comes back."
Which brings us El-Erian's next metaphor: "Central banks are pharmaceutical companies that feel compelled to bring to market drugs that have never been tested. We just don't know what will happen."
Surfing. Untested drugs. Welcome to California, I guess.
—Follow John on Twitter @twitter.com/Carney