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of course there is. these guys can not predict any better than you or i. eventually the stance you take that makes you right makes you wrong.
we see posters here all the time ,i won't mention the names, but one of them has three letters starts with D , but they argue and predict over and over like they have the inside track and they fail to see any way things can play out any different than the picture in their own heads.
it has been a few years since this thread was active and no surprise, yesterday bill gross quit pimco ,the company he founded .
word is he was about to be fired from his own company.
his mis-judged calls and strange behavior had the company execs very worried. at least 5 executives said they were leaving if he didn't.
he is going to janus funds .
so much for these great predictors of things to come.
But you see the insanity continues as Janus stock goes up 40%. Part of that may be rational as Gross may attract new capital to manage for Janus but a not too small part is that people still believe in these prediction gurus. There was a good book years ago by Tetlock "Expert Political Judgement" pretty much showing how bad a track record predictions have in general and by single-minded hedgehogs in particular. Still, we humans seem to have an ingrained need that someone needs to foretell us the future and we readily believe it despite the evidence. Prechter comes to mind here of course.
we see posters here all the time ,i won't mention the names, but one of them has three letters starts with D , but they argue and predict over and over like they have the inside track and they fail to see any way things can play out any different than the picture in their own heads.
'Armchair economists' see no harm in making predictions. Notice how many times I use "IMO" &/or "IMHO". Plus, I don't see people predicting as much as I see people stating how things should be if the economy is to function correctly--IMHO of course.
Hey mathjak107: what if other bond gurus followed Bill Gross back in 2011? As a 'collective group', do you think they could have changed the economy from what we have today?
'Armchair economists' see no harm in making predictions. Notice how many times I use "IMO" &/or "IMHO". Plus, I don't see people predicting as much as I see people stating how things should be if the economy is to function correctly--IMHO of course.
Hey mathjak107: what if other bond gurus followed Bill Gross back in 2011? As a 'collective group', do you think they could have changed the economy from what we have today?
With the recent performance issues in Pimco's bond fund I suspect they and their clients are glad they didn't.
'Armchair economists' see no harm in making predictions. Notice how many times I use "IMO" &/or "IMHO". Plus, I don't see people predicting as much as I see people stating how things should be if the economy is to function correctly--IMHO of course.
Hey mathjak107: what if other bond gurus followed Bill Gross back in 2011? As a 'collective group', do you think they could have changed the economy from what we have today?
you can't even rationalize that since the worlds investors obviously did not follow nor had reason to. .
there are few times in history that the worlds bond investors didn't call it correct as a group..
in fact as many times as the fed raised rates trying to signal they wanted a rise only 1 year in the past 36 years did bonds lose money when the fed funds rate was raised by more than 1%.
Only in 1994 did the federal funds rate rise by more than 1 percent and intermediate bonds lose money. In fact, over the last 36 years, we have seen a decline in interest rates. Yet, there were almost as many years when the federal funds rate increased (17) as there were years of decline. Yet, we only had one year (from 1973 through 2011) when the intermediate bond index produced negative returns.
the worlds bond investors collectively see things very different from what an individual sees. if the QE'S were seen as inflationary then the stopping of the qe's should be deflationary in nature. bill gross tried to think this time was different and when the qe's ended rates would soar and he was wrong .
the stopping of qe1 had investors fearing a slow down and rates went lower not higher.
the fed's signaling in qe2 by buying bonds again reinforced those fears and thinking and rates fell even more.
looks like in the debate between jeff gundlach and bill gross ,jeff was the clear cut winner saying bill was making a big mistake and rates would fall not rise..
by the way bill gross was in talks with jeff about coming aboard and working for him but that didn't materialize so he went to janus .
Last edited by mathjak107; 09-29-2014 at 03:54 AM..
Bill Gross's Total Return Fund, the largest bond fund valued at $237 billion sold all its government related bonds. Saying that yields were too low and, "the Fed is now helping the US government implement a ponzi scheme."
If that isn't a wake up call for you, I don't know what is.
That was near the end of a bond sell-off before QE1 or QE2 ended, perhaps due in some part to his fund getting out of bonds. He's been up front about his performance. Only a few people at that time were predicting that the Fed would keep doing another QE after the previous one had ended. I don't think Gross was one of those predicting a policy trap for the Fed. This time, you have other central banks picking up the QE baton from the Fed.
QEs created inflation but the inflation didn't trickle down to wages. Financial asset inflation will go where the money is concentrated and the wealthy have an extremely high personal savings rate as a group.
Last edited by lchoro; 09-29-2014 at 02:02 PM..
Reason: clarication on QE
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