Gross: 'Stop the Asset Price Decline'

“Stop the decline in asset prices,” PIMCO’s Bill Gross exhorts in his February Investment Outlook. Who (other than short sellers) can argue with that sentiment? Many (such as Credit Writedowns) might argue with the efficacy or wisdom of government intervention to artificially prop up prices. The track record on this score does not inspire confidence. A contrary argument is that excesses must be flushed out of the system before a true recovery can occur and attempts to hinder that process will only prolong the agony.

However, desperate times call for desperate measures, so it's worth considering Gross’s plea, especially given his track record and PIMCO’s close relationship with the TARP program and the Treasury department.

PIMCO’s advice to policymakers is as follows: you can’t bail out everyone, yet economic recovery is not possible unless certain critical asset sectors are not only reliquefied, but rejuvenated in price.

“Policymakers should not focus entirely on one-off bailouts of large real estate developers, municipalities, or even credit card issuers like they have with Citi, BofA, and AIG. Rather, they should recognize that supporting critical asset prices such as municipal bonds, CMBS, and even investment grade corporate bonds is a necessary step towards eventual economic revival.”

But one thing is certain: an economic recovery is dependent upon commercial real estate prices stabilizing and most retail stores staying open for business in the months and years ahead.

Comments

[jayjayjay1212:]

HAHAHAHAHAHAHA!!! Wow that article really made me laugh!

Bill Gross might as well have said : Pleeeeeeeeeeeeeease make the asset price decline stop! I can't stand it anymore! I'm losing my shirt out here!

Just a crazy idea : Why not let the markets decide how much assets are worth?!

Jan 29 03:38 PM

[market ace:]

Gross is the only economic voice that is more geared towrd protecting his own wealth and a$$ than the numerous other crooks on Wall Street and in congress. He has never called for any gov't policy that did not benefit him personally to the detriment of the country. He must be happy that the Fed cut interest to zero to give his bad bonds some life, but he can now only watch in horror as his buddies at the Fed wipe him out with their insane policies.

Jan 29 03:48 PM

[JohnAl:]

So Bill wants his pal Ben to call up the National Guard for extra helicopters.

Jan 29 03:57 PM

[dlaw:]

Absolutely disgusting.

After years of snickering at the government for going "long volatility" and thereby giving him a profit edge he thought was near-permanent, Gross is now directly ripping off the taxpayer.

What a shameful person he is.

Jan 29 04:28 PM

[Obama is Bu...:]

Is Bill Gross actually capable of generating a profit anymore? Gross is paid millions every year under the pretense that he can manage investments better than an index fund

But all his "gains" boil down to political connections and having the Fed or Treasury artificially inflate prices!! PIMCO shareholders are paying millions to have this guy rob taxpayers -- who are also the PIMCO shareholders.

PIMCO shareholders are paying this guy to rob them, take a few million off the top for himself, and then give the shareholders their money back -- calling it "profits" !!!!

Jan 29 04:33 PM

[ROLEX18K:]

Pimco is going to be nationalized, they can't stand it anymore, all this bailout was meant to save Pimco's of America, why people are sitting put whe THEY steal your money, if it would happen on such a scale in other country people would go on White House with hammers and guns and bombs, not watching business TV.
Your life is being destroyed, everybody to the streets!!!

Jan 29 05:02 PM

[Sasha B:]

Phenomenon of declining asset prices is called deflation; and what this guy says is you can stimulate whatever you want with all kinds of fancy wrapped stimulus packages, but until prices stop falling you will see no recovery.

And just to make the point ... he is not the only one who cannot stand it any longer and it just happens that what helps his ass also helps mine and probably yours.

Jan 29 05:31 PM

[justcurious:]

This is the same guy who said buy whatever the treasury buys, but just before they do that. Seems like he's bought a lot of CMBS, and Corporate bonds this time around. Please!!! Give me a break. It should be obvious to even a 7 year old kid what an ass Gross is. Grosso just grosses me out.

Jan 29 05:43 PM

[PROXIMO:]

Surely Mr. Gross can rely on his Washington DC cronies for some relief here. You know, the same ones that ride around in a limo with a hooker under each arm with the tab being paid for by the taxpayer. To hear him piss and moan, - whine,bitch, and complain is pathetic. What's he make, $100 million a year ? More? For doing what? Nothing. I mean, that is embarrassing.

Jan 29 08:38 PM

[damienhaas:]

What he is doing is to save his own. Why not let Bill Gross lose all his money and let other people buy up his asset. That is call Boom and Bust!!!!

Jan 29 10:01 PM

[stkinvestor09:]

Gross is a scum bag.

Everything he says is completely centered around saving his own hide.

Jan 30 01:09 AM

[Studebaker:]

I think that what Bill Gross thinks is "good for America" is whatever happens to be good for Bill Gross at the moment.

Jan 30 08:28 AM

[Hmm?!:]

OK! "an economic recovery is dependent upon stabilized commercial real estate prices and most retail stores staying open"

Sorry Research Recap, but if the government gets involved that is a false or artificially supported market not a truly stabilized market.

Jan 30 11:51 PM