|
CNBC'S MOST SHARED
- Investing in Tech Now
- What You'll See On My NASCAR Documentary Tonight
- Warren Buffett Tells CNBC Consumer Sales Remain "Very, Very Soft"
- Software Giants Rush to Cash In on Carbon Counting
- Warren Buffett's Complete Sun Valley CNBC Interview - Transcript and Video
- Preparing for Retirement
- Microsoft Plays a Game of Bing Pong
- July 10th in Market History
- Video Game Makers Finding Gold in Old Titles
- GM CEO Vows Leaner and Better Company To Emerge
- GM CFO Young: No Positive Cash Flow Until 2009
- Consumers' Mood Sours in Early July
- World Has Avoided Economic Disaster, Obama Says
- Claims Total Over 15,400 in Fraud by Madoff
- UBS Can't Comply with US Request: Internal Memo
- Cisco Cutting up to 2,000 Jobs, Analyst Says
- Treasury Sold Warrants Below Market Value: Panel
- Christmas in July: Consumers to Out-Scrooge Scrooge
- Call Of Shame - Vote Now
- Schmidt on Social Media, Ads and Hulu
- 15 Stocks to Consider
- Maximum Bob Goes Full Throttle For GM
- Najarian: Options Get Bullish on Cisco
- Sun Valley on Social Media
- Four Hardware Stocks Upgraded by Goldman
- Eric Schmidt + Larry Page on Revolutionizing Computing
- Warren Buffett's Complete Sun Valley CNBC Interview - Transcript and Video
Bond guru Bill Gross told CNBC that the 30-year fixed-rate mortgage could fall as low as 4.5 percent as the economy stabilizes.
"The mortgage rate will come down another 50 to 100 basis points," Pimco's founder and chief investment officer said. "That's basically what the government needs. They need a 4 1/2 percent to 5 percent 30-year rate in order to support home prices and, yes, to encourage refinancing and the process of reliquification within the economy."
His advice: "Don't refinance yet."
Gross also said he sees two conflicting trends in the bond markets, with corporate bonds overtaking Treasurys as attractive places to invest money.
Watch Gross's interview at left.
"Treasuries have basically benefited from a flight to quality," he said. "On the other side, though, corporate bonds—for example, Caterpillar and Hewlett-Packard—their spreads are 5 percent more than Treasurys, and so, yes, there's an increasing attraction to the corporate bond market."
That said, he's not buying corporate bonds.
"PIMCO basically is still under what we call the government umbrella, and close to the handle," he explained. "Those would be assets, mortgage-backed securities, that the government has announced that they's going to be buying $500 billion of over the next few quarters."
Some time next year, he sees stabilization coming to the economy, and lower mortgage rates are an essential part of that process.
_____________________________________
Calculators and Advice from Bankrate.com:
_____________________________________
Gross said the economy has undergone profound changes.
"The past 30, 40, 50 years, of a bull stock market was based, in substantial part, on a leveraged type of economy—where people borrowed more and more money, corporations and individuals, etc.," he said. "In addition, the regulation was lax, and on top of that, corporate taxes came down substantially."
All of those trends, he said, are about to reverse, and not just for the short run.
"I call them 'inter-generational changes,' not just cyclical, not for the next year or two, not even for the next two to five years, not maybe for the next 10, 20, 30 years," he said. "We have to factor those in to our pricing for stocks."








