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El-Erian On Stocks: "Prices Are Artificially High - It’s Time to Take Profits"
"It’s not going away, it’s going to get worse," is how PIMCO's Mohamed El-Erian warns Yahoo's Lauren Lyster about central bank policy and the currency wars that are so much in discussion currently. Central banks have been compelled to undertake unconventional measures, things they haven’t done before, because other policymakers are not stepping up to take responsibility on the fiscal side. These implicit devaluations and beggar-thy-neighbor policies force a lot of liquidity into the system and by pushing up asset prices, central banks believe, create a 'weath effect'. It can also trigger “animal spirits” – we get all excited and invest more.
The hitch, El-Erian says, is that in the process, central banks may “break” something. A currency war would fall into this camp. So it’s “high-risk, high-reward and no one can tell for sure which way it’s going to tip,” he says.
In terms of equity markets, El-Erian says investors are split into two camps.
- One camp believes that everything will go higher and central banks will succeed in their efforts.
- The other camp believes asset prices are going to come down to meet the fundamentals.
El-Erian puts himself in the second camp.
“We think that prices are artificially high, that maintaining them here is going to be hard as central banks become less effective, and that it’s time to book some profits and to wait for some better entry points,” he explains.
He clarifies that this is not a “Lehman moment." But “prices that have gotten way ahead of what policy can deliver,"
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No shit statement of the year.
+1
"He clarifies that this is not a “Lehman moment.""
But the chances are good we'll have another "Lehman moment" sooner rather than later, even if no one now knows what it will look like with specificity, thanks to a larger notional aggregate bubble (affecting an even wider swath of asset classes than prior bubbles have) than we've seen in most of our lifetimes, thanks to absolutely radical, coordinated, central bank monetary fail-policies.
When that moment arrives, they'll declare that "noone could've seen it coming," and then proceed to panic and throw reams of fiat/credit/debt at the wall to see what sticks in terms of attempting to sooth nerves and in pretending to take concrete steps towards stemming the "new, larger" crisis (that's actually merely an extension of the existing crisis born of the current monetary policy radicalism).
"Lehman Moment" is after the crash.
I see that the move to Yahoo did not do much for her pay situation ... same cheap, crappy outfits. Lauren got much better exposure on RT, where you could actually find her stuff without having to look too hard.
I'd like to find her stuff...
I'd like to stuff her stuff
Some of the outfits she (barely) wore on RT certainly did give her a lot of of exposure.
She looks fantastic here. Frankly I prefer her dressed more conservatively. I'm so sick of seeing (not to mention hearing) the garden-variety news sluts. She's a class act, it's nice to see her dress like a class act too.
You're right she is a class act......that would look great in a thong bikini.....
"where you could actually find her stuff without having to look too hard."
If I found her stuff, IT would be hard...............
Sell stocks.. & buy PIMCO bond funds!
YAY!!
So much for that "new normal". I agree that "The other camp believes asset prices are going to come down to meet the fundamentals. El-Erian puts himself in the second camp".
But it is the CB response to the retracement that will send shockwaves throughout the currency land.
Yep. If stocks dip below DJ 13k then I bet Bernanke begins buying $140B/mo of bonds.
Spiraling down the toilet bowl....
when the next lehman moments hits, in retrospect everyone will realize it was due
And CNBC will run an overnight marathon where Maria Bathroom will be screaming how this is all quiet unexpected and no one could have predicted the crash and the subsequent turmoil.
And poor Mandy Bigtits'll sit there crying, Steve Liesman'll be saying that everything's getting better when the bad numbers are excluded, the guest host, Paul Krugman will be screaming, I mean fucking screaming waving his hands all over, standing on the seat of his chair and still barley visible above the desktop, throwing Styrofoam cups (not banned in Inglewood) of cold coffee all over railing on about alien invasions and broken windows, Sorkin will sit staring at Mandy's bigtits while Kernan tries to get Santelli to tell everybody what happened and all Santelli'll say is I tolja so, tolja tolja tolja and nobody fucking listens to me you stupid bastards, I tolja, I fucking tolja.", so the producer has no option other than to cut to a dated rerun of "Amos and Andy", dedicated to the NAACP's birthday celebration held in Detroit's Cobo Hall in 1951, while everybody is yelling at the same time and nobody has any clue whatsofuckingever what is actually going on about them.
Fucking awesome I tell ya, awesome.
I'd comment, knuks, but I wouldn't know how to improve on that;)
That was so fucking funny knuckles. I pissed myself laughing over that rant! :-D +1
Now that was a great visual and would be great to see
....and then Cramer storms in with an inflatable bull
you guys are awesome. i could not stop laughing!!!
smells fishy
that's because the can that's being kicked is a tuna can.
That's Becky you smell, waiting for a delivery of "ketchup".
They're already starting to cover their asses in the media. Krugman was on the tele the other day stating how he thought people were relying too much on the Central Banks to save the economy. Gee Krug, do ya think? But, that never stopped him from rallying behind every reason the Fed could think of to print more money.
Of course, what Krugman was really saying is don't blame the Fed and the Banksters when the shit hits the fan, now that we all realize it definitely will because their policies have massively failed.
I would think the next "Lehman Moment" that "nobody could have seen coming" will indeed be Meredith Whitney's Tragedy of the Commons. Remember that? There are still countless pension and annuity funds that only survive based on impossible rates of return. That impacts munis in ways that Main Street cannot ignore. Many of them are already dead, but like Mike the Chicken, they walk around headless.
When the SHTF this time, what could possibly be done to clean it up? If $1T a year is the problem, what's the solution? Will any amount of "printing" "help"? It seems to me we are f'ed any way you look at it... but until then, BTFD...
Yep just putting it out there. Wouldn't want any surprises now would we...
Yeah, but, more importantly, is LL no longer on Putins channel? When did this happen?
I can almost hear the studio derived canned laughter after these 'pull string' talking points...
It's not easy to take investment advice seriously, when it comes from a Dude named Mohamed, with a lithp.
Then again, look at our arrogant POTUSPROMPTER.
OMAllah, Jihad on your ass for that one
Probably so, but the line forms the the right.
+1 and then on the next reel he argues that for growth in the economy there "has to be the right mix of government spending and tax". He's talking out of his ass if he thinks some kind of tax and spend cocktail is going to generate growth since tax and spend of any kind has contributed to the shiticane were in now. Just another fucking Keynesian with another dickhead thoughtcloud rolling off his tounge.
how about if he said "i'm not worried because i think the American armored divisions will be rolling into Cairo by year end...or my name isn't Mohammed." Would that change your point of view? (you can still call him another "asshole Keynsian" of course. only "with a turban.") http://www.youtube.com/watch?v=U8XrE0FSQv4
Come on guys, be real. El-Erian only talks his (extremely large) book. If he is talking down stocks, that means he wants to buy, and it's very bullish. Don't hold your breath for any pullback.
If El-Erian wanted to dump stocks, he would say they are undervalued. Duh.
Dude is totally right.....when WMT is stating it has never been worse.....SELL. Consumers are not consuming. We gotta shit sandwich about to be fed to all.
The inattentive muppets are coughing up blood over their Xmas bills and Olameo gave em a 2% payroll shot in the ass as they were LEANING FORWARD !
LongSoupLine... Please indulge us with a comment on El-Erian...
~~~
I'll handle the Lauren Lyster stuff... [which is totally different]
Needs more pi-rats.
We seem to have lost slewie...
I haven't see Madhedgefundtrader either, or is that the Dude who is up for Secretary of Defense?
slewie... slewie... slewie...
I voted for him. He should reincarnate as Slewie the Vice-prez.
Lauren doesn't look as hot as she did at RT. No leg shots, WTF?
She's still a dirty bitch.
Get laid.
I bet she has seen many a cock, ohh those lips.
Hey, why the down votes? How the hell did Lauren get where she is, get real FFS.
I didn't junk you, bro.
I'm sad that Lauren went all "family" on us. There's still Daniela Cambone of Kitco, though.
Cambrone?... She looks like Snoopy...
Get one of those Japanese Love Dolls, Wile-E...they'll do you good. May I recomend little Miko? She is cooperative and very attentive. Will sit there for hours listening to you with sweet eyes and not argue with every word you say...a perfect woman!
http://www.diginfo.tv/v/11-0075-f-en.php
6 to 7 grand for these things.
Wonder how much they would cost used ???
/not
Jesus people... That's some sick shit even by my almost nonexistant standards.
Keep it up
LOL
Ya'll are just a bunch of preverts.
Ain't it grand??
Is that how much to rent them?
Jesus Jenny Hulk I can't stop laughing.
Dunno...ask Hillary...
But does she say - Oh, Oh, you so beeeg GI?
"The doll is 157 cm tall and weighs 25 kg, which is about 10 kg lighter than the silicone doll developed by Orient in 2001. This improvement makes it easier to handle for seniors and people with physical disabilities."
Emotional disablilties, maybe?
I resemble that remark. ;0>
While we're on the subject...
http://www.realdoll.com/cgi-bin/snav.rd
Ehhh not so much, she's actually really nice. She worked in the same building as me when she was at RT. Real friendly and personable. Always had her make-up done in studio. She was still hot, even without the make-up on in the mornings.
Thanks to her show I met Jim Rogers, Nigel Farage and Jim Rickards. Rogers didn't know what the fuck to make of me when I said hi to him in the elevator and asked about gold. With his southern accent he said "young man, I don't know. I'm sure it will go up". Farange was lighting up cigs the second he got outside. Rickards was the coolest of all three. He talked to me for about 5 minutes. Granted I told him his book was fucking awesome.
Weird isn't it. If you are in the right place at the right time, you meet lots of people who are, for better and worse, celebrities.
Most are pretty decent, but as a friend once said of a famous author, you wouldn't trust him to walk your dog.
A guy I worked with knew Bill Clinton during his governeor days. Said he was one hell of a great guy with whom to play golf, cards and the like but he "wouldn't trust him alone in a dark room with just his bowling ball."
It'd still be fun watchin Clinton trying to fuck a bowling ball.
Don't talk about Hillary like that
I shook Billyboy's hand at a restaurant here in DC known as Sequoia, circa 1994. Brushed Hillary's arm as I did so, between secret service agents. Billy was staring at the nice rack on the young woman next to me. Also sat next to Monica Lewinsky on a plane from NY to DC around the time she was boinking Billy. She was returning from the Vineyard, where Clinton was vacationing, I was returning from Nantucket. She was digging me, I think, but too chubby for me. Then a year later, she's in the news 24/7. Billy was also at the Schiff/Gore wedding, as was a buddy of mine, who told me that Billy couldn't take his eyes my buddy's girlfriend's rack. I have a few other anecdotes about Billy - he truly has a problem around the ladies.
What color dress was she wearing ?
So you had a brush with death... How cold was it?
...
The Truth has left you speechless! :>D
Nice anecdote Charles.
DavidC
What are you ..the elevator man in the bldg?
What's your opinion on bond prices there, Mohamed?
BTW, When did PIMCO take over the world? Gotta love that map behind him.
Off topic alert! - but I gotta get this out.
If you look back over my comments - I predicted this about a month ago - the REAL fallout of the EU meat crisis.
http://www.standard.co.uk/news/uk/horse-meat-scandal-beef-prices-start-t...
10% on the price of beef IN A WEEK - and they just found it in school dinners - and they're pulling it all.
Now what do they say about 'shocks' and 'hyperinflation' and 'triggers'?
Go veggie already and clam up
Have you ever thought about going vegan, Carl?
Yeah the biggest pump and dump Ponzi in history. Everyone is playing chicken hoping they will have the balls to get out at the top, I hope the fuckers lose everything.
BTW Lauren can sit on my face any time she likes.
Wile-E seems you weren't around when the Naz went through 5000 or the nekkei went thru 38000
No I'm only three years old, but I learnt to read last week. I come on here for light entertainment. My speciality is directing Meteorites towards Russia at he bequest of the NSA who are the bitches of the CIA.
Where does one find the heavy entertainment?
Me thinks a few of you guys on here tonight need el-laid-o baddo.
If Obama had a brother, he would look just like that POS - I can't stand him, but I had to watch the first 35 seconds to see my sweetheart:)
Mr. El-Obvious.
Currency wars?
Fredo Krugman was on Bloomberg saying there is no currency wars. That it is just monetary policy. And he's not stupid like everyone says, he's smaaaaaht. :D
Please do not ever talk of that man in a serious tone.
"Fredo Krugman."
Slooofoot, you broke my heart.
Every time El-Erian says a "P" word like "prices" or "policy" I blink and expect to wipe spittle off my face.
Oh and the Green Wizard of Fiat, Alan Greenspan, was on CNBS and he sounds quite dour on...everything. They discuss Sequestration and the Wealth Effect (starts at 1:45):
Greenspan: Odds of Sequestration Occurring Are Very HighAnd Congress is on a 9 day recess. Pelosi said people shouldn't leave and I bet she boarded a plane for CA as soon as she stepped away from the mic.
Pelosi needs another facial overhaul. It looks like shes been sleeping with a bag of hungry rats over her head.
She makes The Joker look saggy faced.
She went as The Joker for Halloween and people complimented her on what she had done.
Heh, yeah, I wasn't sure if it was Greenspan or Pelosi whom Maria was interviewing.
r u sure it wasn't the other way around?
Fuck you Greenspan! Fucking die you douche nozzle. "Dr. Greenpsan" MY FUCKING ASS. When has he ever "thought anything through?"
I don't believe English was his first language, and there is no "p" in Arabic. Most English speakers will never correctly pronounce "Baghdad" or the name "Ghazi". Even "Mohammed". Same thing.
Smart and articulate guy, this fellow.
"and there is no "p" in Arabic."
I'm almost afraid to ask...no, I won't ask ;-)
you must, you must......
[quote] Smart and articulate guy, this fellow. [/quote]
Makes ya wonder, "Does he stack Au/Ag?"
Great interview with the former Chair-Satan - what a slippery devil! At one time he says that "Volker never talked about policy, so I don't wanna either" then a minute later he is talking about Bowles-Simpson/Simpson-Bowles (probably the BS version is more appropriate!). I especially like how at the end of the interview he talks about "unless we get enough confidence going back for longer-term investment" - we won't get 3% or higher GDP growth. Note that he cagily doesn't mention housing at all! My take is that he is referring to the need to blow another housing bubble, without saying it.
Damn! Lauren looks like she's about to give me a hug and a kiss in that link. ...but then, probably not :)
So maybe there's been some profit taking in Gold ETF's so they can buy the coming correction in equities?
Those hedgies and algo's have been having a field day playing sector rotation and churn.
What fucking correction in equities? Said on the ticker today that some big bank was laying off 350 people in stock trading business because of bad market environment.
WHATTHEFUCK?
When Mohammed talks about Prophets I keep glancing outside to make sure no bearded dudes with scimitars on horses in my yard.
Now I ask you, who the fuck made me paranoid about these foreigners, nonbelievers, swarthy skinned people in robes and funny vests, eh? Not anybody here? No fucking way. Sir, may I please move to the front of the line for my colonoscopy, I'm running late for my connection.
Yes, where is the correction?
But, if GS knew the Heinz deal was coming and have made their money, perhaps it is actually going to happen?
Dunno, way overdue, but there is definitely some sector rotation and shenanigans going on with what is left of a market.
Abstatively.
2 indica from my feeble point of view.
1. They're working the price of gold in nasty hard assed ways like we've not seen before. The question is why this time, so hard, so far all of a sudden. Seems like the paper short sellers believe maybe somethings about to break that'll push it higher? Reminds me of the old Greenspan comment after I think it was th Plaza Accord when he said that "in retrospect they should have intervened."
2. Of the real smart money, the private equity and so on guys who do seem to know WTF is going on, are ardent sellers of their positions over the last several weeks with late pricings, follow-ons, after the close activities, etc. Kinda similar in tone and feel to the PM suppression.
Why? All of a sudden....
As I have to keep reminding some of my friends, there are no fucking coincidences.
Fundamentals? What are you talking about, Mohamed? Rules do not apply anymore, the Krugman said it today on the Telewebs again. I would only sell if Faber said buy.
Faber, Junjah, Rosie, Bidermon - they have all been very wrong lately.
Marc or David?
She raises my interest rate.
I keep getting 'Date an Older Woman' ads popping up on ZH.......and i dont wanna!
What's the problemo..?? They don't swell, they don't tell and they're grateful as hell.
That's what Ben Franklin said, more or less..., but then he was damn near blind.
+1000! baaahaaaaaaaa!
Ha, you watched too much granny porn. I only get ads for meeting catholic woman to marry.
Ah hah! Another nun porn aficionado...
Not even Hillary?
As all the Muppets get corralled for the sluaghter.
Yep some wealth effect. Destroy the entire world economy to benefit 5 people.
It's like the Highlander decided fighting with swords was boring.
There can only be one.
http://www.youtube.com/watch?v=NuBis2oey-o
+1 This reminds me of Dave Gruisin
I want equity prices lower, because I am stuck with my bonds. Please, give me some better equity prices, I have missed the run.
Stop whining you stupid fuck.
100 rounds, a silver eagle, and a 6er of beer set me back almost a hundo. Please, someone tell me there's no inflation again...
60" flat screen cheaper now LOL
60" flat screen cheaper now LOL
Just goes to show... I always thought El-Erian was a Middle Eastern Airline....
Just fire the nukes and get it over with. Asteroids aren't worth a damn at ending this.
Lauren should present topless (after the boob job).
What, she interviewed Krugman, too?
El Erian is one of the few worth listening to these days.
I think he summarizes things very well here, but the wild card is the possibility of a return to recession (negative GDP and job losses). And that possibility is not addressed here in his bifurcated view.
A return to negative GDP and job losses appears to be increasing in likelihood, in my estimation. And obviously that would be a much worse outcome for equities.
He seems to expect a slow decline in equities to “meet fundamentals”, but recession would cause a much faster and greater decline, imo.
WAIT THE FUCK A MINUTE.
Job losses. Like there have been no job losses? The number of Americans at work is falling, at full time jobs, falling, at any job with any bennies, falling, unless statistically adjusted all to hell and back to show that there's at least some modest make believe job growth between here now and infinity
Jesus H Fucking Christ, do not let them subsume you!
There has been no fucking recovery!
The fog of chatter about Federal Reserve money-printing shenanigans, currency wars, fiscal intransigence, exchange rates, and alphabetized rescue operations conceals the central reality of the historical moment: that all industrial economies now face epic contraction, even rip-roaring China in its absurd and spectacular bid to become the latest drive-in utopia. The so-called advanced nations of the world are all sliding toward something less than they wish to be, and the so-called developing nations will backslide further into poverty and anarchy where development will never happen.
The implacable contraction underway is the simple result of growing scarcity of cheap oil, the master resource. Thus, in a world where fantasy has replaced analysis, the propaganda channels brim with false news of America's coming "energy independence" and the rebirth of domestic manufacturing, the coming electric car fleet, and space tourism. There is also chatter among the paranoid that an imagined elite has deliberately engineered American collapse for fun and profit, with sideshows about the Department of Homeland Security promoting social upheaval in order to make a show of putting it down. This is all bullshit concealing the futile machinations of people so unfortunate as to hold political office in an unraveling they can't control. Where control is no longer possible, paranoid fantasies fill the vacuum of wishing for control. One thing you can be sure of: the current sociopolitical weather will change. A front will blow through and sweep the fog away. So many circles of hazard are spinning around events that some fast-turning object will come off its axis and start smashing all the fantasies. When that happens, it will be every community for itself, and where there are no real communities -- for instance, the vast matrix of suburban noplaces that America emergently composed itself out of in a tragic quest to become its own televised fantasy -- we'll discover the dark side of the "liberty" that so-called conservatives endlessly invoke, in all its screaming eagle iconography. Not since the Civil War (1861 - 65) has anything bad of this scale happened within the United States itself and the public is unprepared despite our total immersion in the on-screen ersatz heroics of avatars such as Dwayne Johnson. The terrible convulsion of the 1860s was preceded by a political time much like ours is now, with figures (calling them leaders is inaccurate) of no conviction backpedaling furiously toward strife. Remember these things if you tune in to watch President Obama move his lips on Tuesday amid the incessant applause in the House chamber. He'll speak the words "climate change" and the hall will rock with thunderous handclapping -- but it won't mean anything because both the president and the people have no intention of changing the way we live. Mr. Obama will cheerlead for economic growth and he will be talking out of his ass. It's the nature of this contraction that economic growth is absent. You can have plenty of economic activity -- especially if you re-form (literally) the systems we depend on, such as farming, commerce, medicine, and transportation -- but it won't be expressed favorably in the GDP stats or the balance sheets of CitiGroup and Morgan Stanley. At the core of this contraction is the disappearing act of real capital -- that is, accumulated wealth -- for the excellent reason that we are squandering what remains of it in the futile effort to keep living the way we do. But it will be vanishing fast, contrary to the view of such fantasists as David Leonhardt, Washington bureau chief of The New York Times -- catch him on the current Slate Political Gabfest -- who thinks that the Growth Fairy is about to land on the south lawn of the White House. The State of the Union Address is happening in a peculiar quiet moment when all the financial brushfires of the time have been reduced temporarily to a smolder that conceals the full involvement of the roots under the surface. Our economic system is burning down. Nobody wants to talk about the system that will have to replace it, which I call a world made by hand. The fortunate few will be those who have already established themselves in an authentic community of helping hands, who have some tools -- and I don't mean Adobe Photoshop or the latest iPhone app -- and laid in some bits of silver and gold.Ever heard of a "paragraph"?
Oh, he seems like such a nice boy.
Hey, you just met psychopath, don't look him in the eye and edge very, very slowly towards the door! What ever you do don't mention his mother.
paragraph"?
it's a pity that you can't read without a paragrafffffffffffff
Write your own article. This is the Comment section, dbag.
I like turtles.
Its turtles all the way down. Now get the fuck out of here...
Perfect reply!
Let's just create another Government stimulus program. Watch small growth prevail. Have Moody's downgrade US securities. Thus creating another injection to spar growth. This is becoming a scene from groundhog day movie.
http://www.youtube.com/watch?v=tSVeDx9fk60
This guy is a tool, shilling for his line of bond funds mostly held by and for elites, that fund governments' largesse. At the end of the day, what would you rather hold, paper issued by the government that produces nothing, or paper issued by a corporation that actually generates economic activity and presumably profits?
I wanna hold something that pays me more than .000056%
That being the case, you can now let go of your dick...
"We've seen this movie before"...yeah, like the last three years in a row they've tried to pump up the first quarter only to FAIL. Coordinated or not, low-volume melt up or not, the typical consumer is NOT benefitting from this "wealth effect" and I don't know about your neck of the woods, but here in San Diego the lowest price regular I can find is $4.13/gallon. Let me see, higher taxes, higher gas prices, higher food/electricity/water/insurance/everything prices. When can I turn my house into an ATM again...I really need the money so I can CONSUME!!!!
Under the thought of statism, you should have gotten back into debt to buy a Chevy Spark vehicle to help contribute to the reduction of climate carbon emissions
/sarc