El-Erian on How the Greece Crisis Helps — and Hurts — the U.S.

In an interview with CNBC, PIMCO CEO Mohamed El-Erian says the Greek debt contagion will cause investors will divert a good deal of money away from Europe and into the U.S. markets. But, he says it also means more risk aversion among investors, which means the capital diverted to the U.S. will most likely go to the bond markets. And he says the crisis will be a deflationary shock to Europe, hurting global demand just… Read More

El-Erian: No Strong Bouce-Back this Time

While the economy has shown signs of life in the past several months, PIMCO’s Mohamed El-Erian still expects a “new normal” of subpar growth in the U.S. El-Erian tells Bloomberg that, while strong bounce-backs are typical in recoveries from crises that are cyclical in nature, they are not typical in recoveries from crises that are structural — and the latter applies to the current recovery. [youtube=http://www.youtube.com/watch?v=3-OenWiHrZM]

Decoupling or Recoupling — Which Will Win Out?

One of the troubling surprises for many investors during last year’s economic crisis was the “recoupling” of the developed world and emerging markets. Rather than offering a safe haven, emerging markets ended up being hit as hard, if not harder, than the U.S. and Europe. In the Financial Times, PIMCO Chief Executive Officer Mohamed El-Erian recently offered his thoughts on whether the future will hold decoupling or recoupling for the developed and emerging markets, an… Read More

PIMCO Boss: A New Take on Asset Allocation

In this month’s Kiplinger’s magazine, PIMCO CEO Mohamed El-Erian offers some interesting insights into diversification and risk management in an economic world that is in great flux. According to El-Erian, the old rules of diversification have changed in a couple different ways. First, with other countries catching up to the U.S., he says investors shouldn’t have as much of their portfolios in U.S. stocks or bonds as they have in the past. U.S. stocks should… Read More

Pimco’s El-Erian: Beware of Value Traps, Seek Catalysts

Pimco Co-CEO Mohamed El-Erian tells CNBC that “every investor should go back to the basics” in 2009. According to El-Erian, investors need to focus on “diversified asset allocation, good implementation vehicles, and solid risk management”. El-Erian believes equities could lag until investor confidence improves and warns that some investments could be value traps — meaning their attractive valuations alone aren’t enough reason to invest in them and that they could fall further. Instead he says… Read More

PIMCO Co-CEO Calls for “New Thinking”

PIMCO’s Mohamed El-Erian says that “Only New Thinking Will Save the Global Economy”. El-Erian believes that the situation will get worse before it gets better, saying that we are moving toward a “different destination” and one that results in “more market accidents, disorderly sectoral realignments and additional shifts in policy.” He goes on to say that “we are also in the midst of a prolonged increase in precautionary behavior among entities that have suffered massive… Read More