- Dubai Debt Delay Rattles Stock, Bond Markets
- China Overcapacity Worsening, EU Chamber Warns
- Investing in Good Karma – and Making a Profit
- China Unveils Carbon Target Ahead of Copenhagen
- Wal-Mart Price Pressure Hurts China Workers: Report
- Black Friday to Avoid Red Ink; Greenback Gets the Blues
- Bankruptcies Jump, Hitting Highest Level in Four Years
- Steepest Black Friday Discounts, Revealed
- Where Do Pardoned Turkeys Go?
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
MOST SHARED
- The Executive Job Search
- Where Do Pardoned Turkeys Go?
- Chinese Overcapacity is Worsening, EU Chamber Warns
- Salvation Army's Kettles Now Credit Card-Ready
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Dubai Debt Delay Rattles Stock, Bond Markets
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Topless Business Is Taking Off
Text Size 
Government policy will be the key influence in how the economy acts in 2009, Pimco co-CEO Mohamed El-Erian told CNBC.
"Pay particular attention to government action," El-Erian said in a live interview. "The government, whether we like it or not, is going to be a major determinant of both relative and absolute value in '09."
In particular, he said the stimulus package to be fashioned between President-elect Barack Obama and the Democratic Congress will be watched closely on Wall Street to see who wins and loses.
"The government is going to be a major price-setter going forward," he said.
El-Erian said the new year promises to be a "bumpy journey" in which investors should shift their focus from the safety of government Treasury notes and into other vehicles.
Among his recommendations are municipal bonds, Federal Deposit Insurance Corporation-backed paper, high-quality investment grade bonds, bank debt and Treasury Inflation-Protected Securities, or TIPS.
"There's a whole range of instruments that are protected" from risk, he said.
But the best investment decisions, according to El-Erian, will be those based on policy adjustments of the incoming administration.
"'08 was a year when the unthinkable was thinkable. Why? Because Wall Street got caught offside," he said. "There was a massive implosion of the financial sector and there was a contamination in the real economy. In such an environment policy mistakes are inevitable. The story for '09, for this coming year, is a recognition that we are now in the midst of this bumpy journey to a new destination."
Print
Email
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
- How can you get out of debt and back on the road to recovery? Follow these ten steps.
Data is a real-time snapshot *Data is delayed at least 15 minutes