In an age of popping bubbles, a doozy remains - the "central bank put." "Central banks are neck...

In an age of popping bubbles, a doozy remains - the "central bank put." "Central banks are neck deep in extreme policy experimentation mode," writes Mohamed El-Erian, and market reaction to failure "will not be pleasant." Most think they can get out at the turn, an idea sounding better in theory than practice.

Comments (12)
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
    After years and mountains of evidence, we need more "experimentation?" Newsflash: central planning control freaks at work.
    10 Oct 2012, 03:27 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
    And not just at the Fed, but at every other governmental level as well.
    10 Oct 2012, 05:21 PM Reply Like
  • june1234
    , contributor
    Comments (4504) | Send Message
    Exactly and well put "after years and mountains of evidence". I don't think people like Mohamed El-Erian are going to wait for the herd at the turn when the "not be pleasant" occurs.
    10 Oct 2012, 03:45 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4911) | Send Message
    I am thinking the Swiss Franc is looking better and better.
    10 Oct 2012, 05:11 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (13618) | Send Message
    -market reaction to failure "will not be pleasant." -


    What does he mean here? So far central banks actions have been nothing but a long string of miserable failures that put capitalism itself at risk, not just the value of money. Central bank infusions and bailouts of big corporations creates a huge reallocation of wealth to the failures they support at the cost of the value of money.


    The US Federal Reserve saying without their efforts interest rates would rise is disingenuous. They are the ones causing inflation bailing out member banks. Also interest rates would be 0 if they didn't act because we would have had deflation. The Federal Reserve has done no favors this downturn. None at all. If they lower interest rates market forces would have long before they acted.
    10 Oct 2012, 05:18 PM Reply Like
  • Lakeaffect
    , contributor
    Comments (1481) | Send Message
    Seems like the market is going to test that put, starting a couple days ago.
    10 Oct 2012, 07:53 PM Reply Like
  • june1234
    , contributor
    Comments (4504) | Send Message
    QE3 as they call it is nothing more than a continuation of an ongoing program in place since 2008, nothing new . Fed has been buying mortgages and most us treasuries for years now. They all know that


    I believe what he is saying is once the market accepts the fact that all this money printing, trillions of $$ worth has not yielded the desired results the same people who have been benefiting from these trillions will place large sell orders to protect the profits they have made since the market went down to 6500. They ain't getting caught with their pants down like in 08. What else can the Fed do, print more?
    10 Oct 2012, 09:04 PM Reply Like
  • Ijaz Fahted
    , contributor
    Comments (48) | Send Message
    Printing more money was the best, doable alternative. Ben B. has been an expert at avoiding a deeper crisis. The dour comments of El-Erian are self serving, as the flight to his fixed imcome products represents a bubble itself. His investors will someday wish they owned much maligned Apple rather than get slaughtered as interest rates eventually crater current bonds.
    10 Oct 2012, 10:45 PM Reply Like
  • designshoe
    , contributor
    Comments (944) | Send Message
    I am resigned to believe Bernanki is doing the right thing. after siding with the anti-stocks, pro-bonds,"currency bubble" crowd. I am long european, china stocks now, a small postion in US smidcaps
    11 Oct 2012, 12:03 AM Reply Like
  • designshoe
    , contributor
    Comments (944) | Send Message
    El-Erian made the right call 10 years ago on owning EM stocks, it was brilliant. I traded along side with him.
    this time the "currency bubble" and the "market reaction to failure "will not be pleasant."" - smacks of stock-bears. wanting another 2008 crash to buy into. I am afraid that ship has long sailed.
    the stock market as a whole is not over-valued at PE=13, even XLF is still 60% below it's 2007 high. betting on a crash from this low PE level has not been a smart bet historically.
    El-Erian, Gross want stock investors to panic & to buy more bonds
    11 Oct 2012, 12:09 AM Reply Like
  • designshoe
    , contributor
    Comments (944) | Send Message
    the only time in the last 100 years where a 50% correction occured 3-5 years after a major financial crisis-recovery, was in 1938.
    can such conditions recur? only if we redo trade wars, and deep austerity on a national level.
    11 Oct 2012, 12:17 AM Reply Like
  • sethmcs
    , contributor
    Comments (3581) | Send Message
    El-Erian and Gross would have a very unpleasant time trying to exit PIMCO's bond positions if they even could the losses would be brutal. I, however, would buy those dumped bonds at a extreme discount with a reasonable yield.
    11 Oct 2012, 12:35 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs