El-Erian: End May Be Near For “New Normal”

When the financial crisis of 2008-09 hit, bond giant PIMCO was quick to say that the U.S. had entered a “New Normal” of slow growth, high unemployment, and debt woes. Now, PIMCO’s Mohamed El-Erian says that we may be nearing the end of the “New Normal”. “We said in 2009: three to five years,” El-Erian tells CNBC, referring to how long he thought the New Normal would last. “Sectors have healed. The ‘new normal’ [has] allowed… Read More

Yardeni: Numbers Show “Old Normal” Reigns

Strategist Ed Yardeni says that the “New Normal” scenario that has been promulgated by Bill Gross and PIMCO is off base — and says recent economic data proves it. “While Bill Gross sees a world full of new normals and paranormals, the old normal business cycle continues to show that it is still in gear,” Yardeni writes on his blog. He presents a chart of the trend of initial unemployment claims following the past four… Read More

Arnott on The Simple, “Uncomfortable” Truisms

Rob Arnott of PIMCO and Research Affiliates says that he expects developed world growth to significantly lag emerging market growth in the coming years — and says investors should take heed of that when investing. “GDP growth in the developed world faces headwinds from the costs associated with a rising debt burden, from the inevitable return to balanced budgets in the years ahead, from a shrinking workforce, and from a dearth of young adults,” Arnott… Read More

Montier: Don’t Believe the New Normal Hype

The “New Normal” concept has gotten a ton of attention in the financial and investment worlds in the past couple years. But in a new paper, GMO’s James Montier says not to believe the hype. In a paper posted on GMO’s web site, Montier says that for some economic indicators, there may indeed be a New Normal. For others, however, there isn’t. And, he adds, “what concerns me more than this are some of the… Read More

Paulsen on the “New Normal” Mania

Wells Capital Management’s Jim Paulsen says that, just as investors succumbed to a mania that made technology stocks wildly overvalued in the late 1990s, they now are falling prey to a “new normal” mania that is keeping stocks extremely cheap. Paulsen tells Bloomberg that investors are ignoring the positives about the economy and buying into the notion of the “new normal” — that is, the notion that growth will be slow or non-existent for the… Read More

Gross: New Normal Is Real; Look Outside U.S. for Opportunities

PIMCO’s Bill Gross is standing by his contention that we’re in a “New Normal” for the economy and stock market, saying that investors shouldn’t expect double-digit returns from a stock/bond portfolio going forward. Gross tells CNBC that investors should look outside the U.S. for the best opportunities, keying on countries that have non-dollar currencies and higher growth prospects.

Fisher: New Normal Concept Is “Idiotic”

While many have been talking about — and fearing — a “New Normal” of slower growth for the U.S. economy and stock market, author and top money manager Kenneth Fisher says the notion is “idiotic”. Speaking at the Forbes Global CEO Conference in Sydney, Fisher said things aren’t so different this time around. “We are chimpanzees with no memory,” he said, according to Bloomberg. “The next 10 years are going to be just as good… Read More

Gross Talks Deleveraging, Deficits, and the New Normal

In Consuelo Mack’s latest WealthTrack interview, PIMCO’s Bill Gross talks about the “New Normal” he envisions for the economy and investing world. Gross says that deleveraging and the need for big numbers of Baby Boomers to save as they reach retirement will be drags on the economy for some time. He says he’s not in the “old Roubini camp” — referring to Nouriel Roubini, the economist known as “Dr. Doom” — and that he doesn’t… Read More

New Normal? Don’t Count on It, Says Farrell

Since the financial crisis hit last fall, one of the most-used terms popping up in stock market and economic parlance has been “the new normal”. Often attributed to PIMCO’s Bill Gross, the term is used to describe the slower-growth, lower-return environment that many say will confront investors in the coming post-overleveraging period. But are we indeed heading for a “new normal”? And is “the new normal” really a new idea? No on both counts, says… Read More