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Pimco's Gross Skewers Bernanke: You're Part Of The Problem

Tuesday, June 4, 2013 - 7:59 PM
Bond guru Bill Gross has taken straight aim at the Federal Reserve and its Chairman Ben Bernanke, charging that ultra-loose monetary policies are holding back the economic recovery.

Pimco's Gross Skewers Bernanke: You're Part of the Problem
10
ShorebreakShorebreak2,381 posts since
Apr 6, 2010
Rep Points: 12,707
1. Tuesday, June 4, 2013 - 8:27 PM
Come on, we all know such attacks are with background motive; e.g., maybe Gross' career is at risk by recent Fed's positions/actions.
2
51hh51hh1,462 posts since
Jan 16, 2010
Rep Points: 6,352
2. Tuesday, June 4, 2013 - 8:42 PM
Well, if you don't agree with what Gross says regarding Bernanke's policies I can understand where you are coming from.  However, I really can't see Bill Gross' career in jeapardy any time soon.
10
ShorebreakShorebreak2,381 posts since
Apr 6, 2010
Rep Points: 12,707
3. Tuesday, June 4, 2013 - 10:23 PM
Just sick with everyone trying to be a sage.  Why doesn't Gross try to be in Bernanke's position for size??  Taking wild shot at the sideline certainly does not help.
3
51hh51hh1,462 posts since
Jan 16, 2010
Rep Points: 6,352
4. Tuesday, June 4, 2013 - 10:48 PM
I would trust my money with Gross over Bernanke any day. He has made a lot of money for his investors over the years. He is not known for being the bond king for nothing. Gross is a billionaire so I don't think he has too much to worry about with respect to Bernanke.
5
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
5. Wednesday, June 5, 2013 - 6:58 AM
We are somewhat missing the point I am trying to make:

1. Putting the persons aside, look at the recent trend due to Fed's QE actions.  Stock market rises and bond market suffers.  When a "Bond king" attacks the Fed in this particular climate (bond is a disease, not an opion) and timing (toward the tail end of Fed's QE actions), no matter who he/she is, the objectivity is at question.

2. Bond king or not, there was a time for Gross to make his name when Bond was favored.  He "happened" to do it better than others.  Opportunity makes a hero, so to speak.  But there were star fund managers like Bill N. of Oakmark fund and Joel T. of FLPSX (and Peter Lynch of Fidelity Magellan Fund); they were humble and knew their places/functions.  I did not hear any of those truly great fund managers even commented on Fed. Policy, not to mention attacking.  It will be a joke to put Ben in Bond trading or to put Gross to lead the Fed., just different functions.  Gross is more arrogant and political, and noisy at times.  He is definitely different from those superb fund managers I highly respect.  Personally I think he wants to be compared with Warren Buffett, in terms of publicity and fame (Warren is another great example of humility even when all seeks his perspectives; his comments are always intelligent, objective, and non-critical).   

3. I will certainly not trust my money to either of those two or anyone else, without careful and thorough examination/analysis.  It is my money and it is dangerous to develop any favor or even "love" for any fund managers.  This is not the issue for our discussions anyhow.

4.  One will be surprised how insecure a billionaire would feel, especially when her/his "star" status is endangered.  Some just do not know when to fold and keep a low profile.  Personally I feel that Gross belongs to that category.  he wants name/fame in addition to money.  If the spot light is not on him, he is very unsatisfied.  You folks can help my memory, but I do not think this is the first time he opens his "big" mouth and gets himself into trouble.

Thus as for this topic, I humbly and respectfully beg to differ.  It is ok for anyone to criticize the Fed. (it is a free country) and I am certainly not defending Ben (I do not trust or like his approach).  But the timing and content of Gross' criticism deserves more discernment and examination; i.e., taking it with a grain of salt.
5
51hh51hh1,462 posts since
Jan 16, 2010
Rep Points: 6,352
6. Wednesday, June 5, 2013 - 8:33 AM
I stand by my post @ 2. Tuesday, June 4, 2013 - 8:42 PM
6
ShorebreakShorebreak2,381 posts since
Apr 6, 2010
Rep Points: 12,707
7. Wednesday, June 5, 2013 - 12:23 PM
51hh, you may be right about Gross talking too much, but I like it when I agree with him. :)

He has been warning the public about monetary policy for a number of years. I really don't see the problem with it. People are free to agree, disagree or just plain ignore him. He has also been warning people about assuming too much risk reaching for yield. He calls it the "new normal", an investing environment where one needs to lower their expectations for higher yields in a slow growth economy. This is probably good advice. There are a number of savers out there who are reaching for yield in leveraged investments like closed-end funds or high yield/long duration bonds. There may come a day when they will regret having done so. In this regard, I think he is providing a public service although I would imagine very few people are paying attention to his warnings.
3
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
8. Wednesday, June 5, 2013 - 12:28 PM
Lou/SB, Thanks for your view of Gross; helping all of us to have a more balanced perspectives. 

Lou: I agree with you completely on #7.
2
51hh51hh1,462 posts since
Jan 16, 2010
Rep Points: 6,352
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