Slow growth and inflation have a tendency to accompany large deficits and increasing debt as a percentage of GDP.
Bonds as an asset class will always be needed, and not just by insurance companies and pension funds but by aging boomers.
It's sort of like a teeter-totter; when interest rates go down, prices go up.
Bond investors want growth much like equity investors, and to the extent that too much austerity leads to recession or stagnation then credit spreads widen out - even if a country can print its own currency and write its own cheques.
Whether a tops-down or bottoms-up investor in bonds, stocks, or private equity, the standard analysis tends to judge an investor or his firm on the basis of how the bullish or bearish aspects of the cycle were managed.
Ex-Fidelity mutual fund manager Peter Lynch was certainly brilliant in one respect: he knew to get out when the gettin' was good.
If financial assets no longer work for you at a rate far and above the rate of true wealth creation, then you must work longer for your money.
Both from the standpoint of stocks and bonds, an investor wants to go where the growth is.
Human nature means that institutions at some point lose their sense of mission. That sense of vulnerability drives Pimco.
Favouring employment versus the financial markets is a decent policy; certainly not beneficial for the currency or the gilt market, but beneficial for the people.
Whenever I read the newspaper, I say to myself, 'At least my wife loves me.'
Companies typically borrow money at less than their return on equity and therefore compound their return at the expense of lenders.
Americans now know that housing prices can go down and they can go down by 10, 20, 30, and in some cases, 40 or 50 percent. We know they can go down. But five years ago, we thought they could only go up.
Bernanke and company are trying to reflate the economy with almost stated objective of inflation at 2 percent and higher in order to provide some type of safety margin for a future recession. That's where they want to go.
In questioning initially whether I am a great investor, I open the door to question whether other similarly esteemed public icons like Bill Miller are as well. It seems, perhaps, that the longer and longer you keep at it in this business the more and more time you have to expose your Achilles heel - wherever and whatever that might be.
The U.K. and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term, is the way to produce real growth. It is not. You've got to spend money.
In terms of economic growth, PIMCO originated the famous phrase the 'new normal.'
When does money run out of time? The countdown begins when investable assets pose too much risk for too little return; when lenders desert credit markets for other alternatives such as cash or real assets.
I am tough but I have a soft side.
It's going to be difficult to stimulate the real economy in the U.S. at a faster rate than 2 percent and perhaps even less if we have that fiscal cliff in December or January 2013.
