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.
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.
Policy weakness in the US and Europe is prevailing over corporate strength to prevent a rally in the stock market, Pimco's Mohamed El-Erian said.
Technical factors played a role in Thursday's unsettling market moves, including the disorderly across-the-board collapse in the price of risk assets in the final hour of trading and the related surge in U.S. Treasuries. But they were not the cause. Rather, they amplified three factors that will determine the fate of markets in the weeks ahead.
Equity markets are in the grips of a tug of war — between solid company fundamentals and macroeconomic uncertainty.
A lack of direction in both policy and politics will create a highly volatile investing environment for an extended period, Pimco's Mohamed El-Erian told CNBC.
The week's top business news and investment advice, including cyber security picks and earnings plays, with CNBC's Sue Herera.
The co-CEO of the world’s largest bond fund has warned America that it faces a combination of higher inflation, austerity and financial repression over the coming years as policy makers grapple with the impact of the financial crisis and the subsequent policy response.
Pimco Chief Executive Mohamed El-Erian told CNBC Friday he is disturbed by increases in commodities prices and how investors and the government react to them.
Insight on the US health care industry and whether the world can accommodate China's success, among other topics, with Hedge Fund titan Jim Chanos, president and founder of Kynikos Associates, and Mohamed El-Erian, Pimco CEO & co-CIO.