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Bill Gross Issues "Mea Culpa" Sees 0% Growth For Developed Economies Over The Coming Quarters

Tyler Durden's picture


By now it is no surprise that Bill Gross has not exactly "caught the inflection points" in the market in the past year. Of recent note, as Zero Hedge first reported three days ago, in September he massively extended the duration of his holdings in an attempt to catch up with Operation Twist just in time for the 30 Year to have its biggest drop in quite a while. Which may explain why he has released a letter to investors titled, simply enough, "Mea Culpa" in which he essentially apologizes for underperforming the market, when he says "I am having a bad year". That's fine, and so are your clients. But what is far more troubling Bill, is that your corporate parent, Germany's Allianz, as is now well known is the entity pursuing the conversion of the EFSF into a multi-trillion "insurance" fund to backstop even greater trillions of corporate and sovereign fixed income exposure. Please tell us Bill that this is not your doing: that it is not your "influence" that has been upstreamed to corporate, and is forcing Europe's taxpayers to foot the bill for your, and others', "bad year." Because while everyone can make a mistake, those of us who are not too big to fail, read manage $1.2 trillion fixed income portfolios, get punished for said mistake. It is far more reprehensible when you come crawling to the same taxpayer and engage in the same activity you so loudly complain about in every single letter (there is a reason why the broader population has grown to loathe Warren Buffett). Anyway, with that aside, here is what Gross sees as happening in the future: "So where do we go from here? Our internal growth forecast for developed economies is now 0% over the coming several quarters and the portfolio more accurately reflects this posture." Well, while Pimco may have been spot on 10 days ago with this assessment, the subsequent 10%+ short covering squeeze has forced a dramatic sell off in the 10 Year (the 10s30s has flatten substantially in recent days). And naturally, in this world in which effect implies cause, the moves in the market now are taken to represent an avoidance of the recession. Granted that makes absolutely no sense, but such is bizarro world. So our only question is - did Gross just jinx the recession out of existence?

Full letter:


h/t Dealbreaker


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Fri, 10/14/2011 - 17:57 | 1775483 achmachat
achmachat's picture

this is pretty big. If I'm not wrong, a lot of folks out there listen to him and mainstream reaction is bound to follow.

Fri, 10/14/2011 - 18:31 | 1775561 MillionDollarBonus_
MillionDollarBonus_'s picture

Bill Gross got what was comming to him when he had the sheer audacity to short safe-haven US treasuries. Let this be a lesson for anyone else who thinks about betting against America. You do NOT want to be short the world's number one safe-haven asset during a time of crisis. US- treasuries are the only asset that can protect you and your family during these uncertain times.

Fri, 10/14/2011 - 18:32 | 1775570 SheepDog-One
SheepDog-One's picture

If you think US Treasuries are a safe haven then youre a fucking idiot.

Fri, 10/14/2011 - 18:46 | 1775605 Biosci
Biosci's picture

Is this the friday afternoon humor post?

Fri, 10/14/2011 - 19:36 | 1775743 topcallingtroll
topcallingtroll's picture

Yes. Ya gotta love hamy, i mean million dollar bonus.

But it has been true so far.
I used to like Bill Gross until he started dissing the united states merely to talk his book.

I have some respect for legitimate criticism not based on financial motives.

Bill showed himself to be a whining loser and his losses bring me joy, particularly since he made the same mistake shorting treasuries after qe 1. He claims he wasnt short, but Tyler proved him to be a liar in addirion to a conniving mercenary whiner.

Fri, 10/14/2011 - 21:04 | 1775933 Biosci
Biosci's picture

It's a shame, really.  I used to think he was Mr. Trial Balloon for the Fed, since he was so spot on in predicting Fed policy.  You'd think that would be a license to print money, but if he knows policy changes in advance and still manages to lose money, then the PTB may have really lost control of this thing.

Fri, 10/14/2011 - 22:42 | 1776126 AldousHuxley
AldousHuxley's picture

Pimpco VS Fed and Fed won because it had the backing of ECB and Chinese central banks too.


But Mr. Gross has nothing on US Fed after socialism handout:

  1. he got bailout for $1.7B on fannie mae freddie mac deal
  2. hired Alan Greenspan to do inside the Fed trading
  3. hired Neel Kashkari of TARP fame


SO STFU Gross with your government subsidies and inside info and tell El-Erian to stop yapping on CNBC (parent GE got bailed out)


99% should go protest at his newport beach gambling parlor.


Sat, 10/15/2011 - 11:28 | 1776923 4shzl
4shzl's picture


Fri, 10/14/2011 - 18:47 | 1775608 Cynical Sidney
Cynical Sidney's picture

"My fabulous rock of a wife"

never heard of that expression before; my take is that his rock of a fund (total return or whatever it's called) is imploding and he needs to find a new rock of gibraltar to lean on. as for bill's '0% growth' forecast, debt driven growth will not offset negative growth and we are in a depression; after some sugarcoating and windowdressing bill says let's just call it '0% growth"

ps. milliondollabonus is a disingenuous fraud, he's probably selling all of his tnotes right now so he could buy more bullion, ignore his comments.

Fri, 10/14/2011 - 18:47 | 1775609 LongBallsShortBrains
LongBallsShortBrains's picture

Did you forget who you were talking to?

How he keeps a straight face while typing that shit is beyond me.

Fri, 10/14/2011 - 19:25 | 1775712 Cynical Sidney
Cynical Sidney's picture

that wouldn't be hard for folks who have an ulterior motive or some hidden agenda. for all i know milliondollarbonus could be some cuban agent trying to undermine democracy in the US by working up sentiments against the kleptocracy, or maybe his wife left him for a bankster and he wants bankster blood (in which case i'd be happy to oblige him)

Fri, 10/14/2011 - 19:30 | 1775731 topcallingtroll
topcallingtroll's picture

He has totally outclassed me as a troll. I am getting jealous.

Fri, 10/14/2011 - 20:03 | 1775801 Schmuck Raker
Schmuck Raker's picture

"for all i know milliondollarbonus could be some cuban agent trying to undermine democracy in the US by working up sentiments against the kleptocracy..."

Huh? Shouldn't you be thanking him? Or...huh?

Fri, 10/14/2011 - 23:54 | 1776279 Cynical Sidney
Cynical Sidney's picture

nope i'm not ready to go that far, at least not until he speaks his mind. but i enjoy milliondollarbonus' crazy antics, his parody of the FED, his mocking bernanke's ponzinomics, i find it amusing ;D

Fri, 10/14/2011 - 18:38 | 1775587 spiral_eyes
spiral_eyes's picture

If it helps, it's totally possible for stocks to crash up before hyperinflation hits. When the sovereigns really start moving out of US Treasuries and into gold and "productive" assets (read: S&P500) it could look like Benny was right all along for a few months. 

And then (for whatever reason, but quite possibly an oil shock) the failed bond auctions hit, treasuries crash, rates spike, and a massive flood of dollars ($trillions) is pushed onto the economy as investors try to get their hands on anything tangible.

KA-BOOM, bitchez.

When Benny is finished i predict DJIA $36,000. The problem is bread would be $36,000, too. 

Fri, 10/14/2011 - 18:41 | 1775592 SheepDog-One
SheepDog-One's picture

Somethings got to give soon. I dont know about protracted economic developments playing out anymore, I think theyll just take us into a world war like the other depressions.

Fri, 10/14/2011 - 18:51 | 1775615 spiral_eyes
spiral_eyes's picture

I've been writing about that today, too:

I’m coming to believe that the military-Keynesian establishment might try and kill every bird with one stone — a new regional war, probably involving Syria, Iran and Israel in Eurasia. Let’s look at what that might accomplish:

  1. Create a new post-9/11-style hard-to-question patriotism — “There’s a war on — we all need to rally together around the flag — the complainers and protestors must hate America”
  2. Put America back to work — in weapons factories, and on the front lines.
  3. Give the economy a large Keynesian injection — through war spending.
  4. Take out Iran, a powerful enemy of America — and send a threatening message to other uppity Eurasian autocracies like Russia and China.
  5. Curtail civil liberties & censor the internet — “There’s a war on — we all need to rally together around the flag — and those who don’t must be working to undermine America” 


Fri, 10/14/2011 - 18:59 | 1775637 derek_vineyard
derek_vineyard's picture

too much in-fighting with the Jones's to unify

survival of the fittest and luckiest and a total reset

Sat, 10/15/2011 - 04:20 | 1776510 AldousHuxley
AldousHuxley's picture

Nowadays computer science degree from MIT is not "fit" enough.


Extreme wealth is all about luck...many bullshitters sitting in corporate offices outsourcing and offshoring jobs to non-US citizens while collecting and complaining about lack to STEM workers.


Well I guess there's always the lottery or a gun.


Fri, 10/14/2011 - 19:37 | 1775747 SheepDog-One
SheepDog-One's picture

Good stuff there.

Fri, 10/14/2011 - 20:13 | 1775820 Schmuck Raker
Schmuck Raker's picture

"4. Take out Iran, a powerful enemy of America..."

"Powerful"? Your kidding right? They IMPORT oil, for cryin' out loud.

Pakistan would be a challenge, I bet. And get us on the Indians good side to boot. We'll need their help to pressure China's back door when we invade through the South China Sea, leveraging our assets in Brunei.

Fri, 10/14/2011 - 20:59 | 1775920 SoNH80
SoNH80's picture


Fri, 10/14/2011 - 21:24 | 1775978 reflex_121
reflex_121's picture


I like!  That's some cold, hard logic friendo. 

I was just discussing this type of scenario with a co-worker today. 


new threat emerges through either attack on western soil or oil pipelines.

us convenes with western partners.

un resolution to establish war.

patriotic fervor is amplified by the media and/or brainless citizens.

those raging against the system via "ows" means will be deemed malcontents and unpatriotic/unproductive scum.


turn the tables on civil disobedience.

adrenaline boost to economy via manufacturing.

war bonds issued in us and eu to shore up auctions.

aids unemployment.


now, this type of pathological thinking is anathema to most (including myself), which makes it precisely right when viewed through the prism of our leaders and the unquenched thirst for power.

stay thirsty, friendo.




Fri, 10/14/2011 - 19:24 | 1775710 NoClueSneaker
NoClueSneaker's picture

... I took a walk this evening. Something ist changing very fast, and the smell of the real change is in the air, despite all that brainwashing " Uns geht's  gut "...

The mightiest of all warlords rides again - General Fear .

K, maybe I'm just imagining it. I'd like to.

Fri, 10/14/2011 - 18:45 | 1775594 knukles
knukles's picture

A week or so ago, you'd been on a crusade suggesting that everybody should be happy about paying taxes... implying more is good, America, patriotism, etc. 
I had challenged you to in fact do as you preach, to show all of us the quality of your character, that you are indeed a man of honor amd integrity by following up upon your own suggestions.  And to inform all of us publicily, veryify that you in fact had done so.
I offered you a once in a lifetime opportunity to show the quality of your convictions, to assure us that you are not simply a shill expousing nonsensical diatribes in which you truly hold no conviction. 
Thus I ask you outright sir, have you yet made additional volitinal contributions of personal monies above and beyond that required under the tax code to the Federal Government?
Thereby proudly supporting the country you so love?
Please let us know.
Indeed, you should be grateful for such an opportunity, both philosophically as it is in concert with your stated beliefs and as a proud American to establish a precedent to which we may all aspire. 
We look forward to your exercise of this amazing privilige to show your patriotic feality with America.
Please demonstrate such for us, verifying such.  We eagerly support your contibutions to our country in a time of need.
Remember, it takes a village of many giving altruistically for the benefit of Your Federal Family.

Fri, 10/14/2011 - 18:48 | 1775614 Biosci
Biosci's picture

It is possible, knuckledragger, than he was being facetious then and is being facetious now.  Just a thought.

Fri, 10/14/2011 - 20:14 | 1775827 Schmuck Raker
Schmuck Raker's picture

-1 shhhhhh

Fri, 10/14/2011 - 20:47 | 1775890 Biosci
Biosci's picture

but...but...oh, ok.  you're right.

Fri, 10/14/2011 - 20:25 | 1775840 MillionDollarBonus_
MillionDollarBonus_'s picture

It would be highly inappropriate to disclose my tax details to the public, but mark my word there are many Americans who simply do not pay their FAIR SHARE of money to the government. This is a time to make sacrifices for your country and allow the most talented politicians and economists to allocate capital for maximum effect.

Sat, 10/15/2011 - 13:52 | 1777204 knukles
knukles's picture

If one should make sacrifices, then we call upon you to show us how, to lead by example as any Great Patriotic American would do.  And if disclosure is good enough for Warren Buffet, it's good enough for you, too. 
Nothig whatsoever inappropriate about it.  Time as you said, for sacrifice.  Particulary when the Our Counrty is facing such dark hours ahead.
So quit with the dissembling, diversions and pablum.
Stand up and be counted as a True Americn Patriot.

Do you love America or Not?

Display your honor, credibility and feality, your love of America.

Else we might take you as a Troll.
Or just not take you seriously.
Which nobody wants to do, for we all love America and Her True Patriots.
Time to Man Up for America, Sir.

The Weight of Leadership is Heavy.

Fri, 10/14/2011 - 18:44 | 1775599 SpeakerFTD
SpeakerFTD's picture

I love your stuff, MDB.   And I am surprised some of the frequent commenters still fall for your clever trolls.

Fri, 10/14/2011 - 18:55 | 1775631 Yamaha
Yamaha's picture

Million DollAR Bonus - you have the best POKER face of anyone on this sight!  Bless you....

Rick Perry

Fri, 10/14/2011 - 19:52 | 1775783 Schmuck Raker
Schmuck Raker's picture


How can you be so heartless, and cruel? Have you no shame, sir?

Mr. Gross' letter is the most beautiful, and touching I've read in quite some time. (And this, among many other moving missives from Fund Managers, and like-minded Patriots we, here at Zero Hedge, have had the undeserved good fortune to be blessed with.)How can you denigrate such a fine man, and yourself, by presenting such callous commentary.

Was he mistaken in his analysis? Yes, be sure. But, he had no idea that what was clearly a most concrete recovery would be torpedoed by events in Europe. Nobody, nobody could have seen what was coming. Your advantage of hindsight should not be assumed by yourself to be carte blanch to criticize Mr. Gross.

I haven't the time to engage with you in a discussion explaining the merits, nay...the blessed wisdom of occasional "short selling". So I'll leave you with a thought for you to ponder.

"Is not the healthiest tree made stronger, indeed more whole, by artist pruning now and then?"


A Humble Schmuck

Fri, 10/14/2011 - 21:38 | 1776007 He_Who Carried ...
He_Who Carried The Sun's picture

"Let this be a lesson for anyone else who thinks about betting against America. You do NOT want to be short the world's number one safe-haven asset during a time of crisis. US- treasuries are the only asset that can protect you and your family during these uncertain times."

Sure. Put in your ante already? Good! I hold and raise by 100%.

You can call or raise, its your choice but do not base your calculations on ideology or it will be game over sooner than I'd hoped for, silly.

Fri, 10/14/2011 - 22:05 | 1776068 Buck Johnson
Buck Johnson's picture

What you should have said was don't let the govt. know that you are shorting Treasuries big time.  Because they will do everything in their power to make sure you don't collect on that bet.  He bet against the US and him thinking that he was an insider (I still like to know why he did it in the first place, he's an insider he had to know that US treasuries and the dollar is important for the US and they will protect it no matter what).  And for him to make this mia culpa, he must have lost alot more than what he is letting on. I'm not saying that US treasuries are sound, they aren't.  But the US will do an manipulation it can to make sure US treasuries are bedrock or appear bedrock.

Fri, 10/14/2011 - 22:06 | 1776072 covert
covert's picture

we saw it first, totally right.


Fri, 10/14/2011 - 18:00 | 1775491 Divided States ...
Divided States of America's picture

Nah, this guy is grossly overrated as an asset manager.

Fri, 10/14/2011 - 18:24 | 1775552 mynhair
mynhair's picture

Nah, he's just Gross.

Fri, 10/14/2011 - 18:58 | 1775639 Yamaha
Yamaha's picture

No - he's just gay.............a switch hitter!

Fri, 10/14/2011 - 18:03 | 1775496 Deadpool
Deadpool's picture

one of the great comeuppances on Wall Street. next to Bill Miller and Warren Buffett this has been a classic too big to succeed story. Gross is a book talkin' asshole. You cannot invest along side him and make you cannot invest with him and his Titanic of debt shit fund Total Return. What a scumbag earning fees for himself and Allianz while returning less then zero. burn, Bill, burn!

Fri, 10/14/2011 - 18:05 | 1775504 Caviar Emptor
Caviar Emptor's picture

did Gross just jinx the recession out of existence?

No. The term "Recession" has simply gotten more complex.

And that's for the same reason that Bill Gross (and many other experts) got it wrong on inflation/deflation in 2011. 

Biflation is a tough concept to accept in a world that was once more simple. Yes, there can be inflation and deflation co-existing side by side. Net-net, that means decreasing buying power of money. Which means a constrained consumer and margin squeezes for most business. Necessities are inflating. Personal assets like real estate and incomes are deflating. 

So Bill Gross projects 0% growth. But that doesn't mean that there won't be inflation. What will that mean for interest rates? Volatility. For the same reason Gross did a 180 on his investment thesis for Treasuries. Some will perceive 0% growth, others will see monetary inflation. The two are currently canceling each other out and that's why we have biflation. And CPI will never reveal inflation with housing dragging down 40% of the calculated figure. 

Fri, 10/14/2011 - 18:18 | 1775536 AngryGerman
AngryGerman's picture

"biflation"? if i understand that correctly, it just like a girl being digging dicks and cunts

Fri, 10/14/2011 - 19:41 | 1775757 topcallingtroll
topcallingtroll's picture

Stagflation bitchez.

We have seen this before. No need to make up words that show your lack of ejumacation.

Fri, 10/14/2011 - 18:24 | 1775549 jimmyjames
jimmyjames's picture

Biflation is a tough concept to accept in a world that was once more simple. Yes, there can be inflation and deflation co-existing side by side. Net-net, that means decreasing buying power of money. Which means a constrained consumer and margin squeezes for most business. Necessities are inflating. Personal assets like real estate and incomes are deflating.

So Bill Gross projects 0% growth. But that doesn't mean that there won't be inflation. What will that mean for interest rates? Volatility. For the same reason Gross did a 180 on his investment thesis for Treasuries. Some will perceive 0% growth, others will see monetary inflation. The two are currently canceling each other out and that's why we have biflation. And CPI will never reveal inflation with housing dragging down 40% of the calculated figure.


You cannot have both Inflation and Deflation at the same time-

Both are monetary phenomena -money supply and credit supply-

If cash and credit are going in opposite directions-it's as simple as which one is contracting or expanding by the largest amount-

Asset values decreasing is deflation-(a decrease in personal balance sheet worth ie: decrease in personal money supply)

Housing prices are not included in CPI and haven't been for years-

They used "owners equivalent rent" to hide the Inflation of the last 30 years and now they will use it to hide the Deflation in housing values-

Fri, 10/14/2011 - 18:32 | 1775571 Caviar Emptor
Caviar Emptor's picture

The old concept was one of  "a strictly monetary phenomenon".  However those concepts were designed to describe a much simpler world. Today, you could contract the money supply to zero and still have inflation. The dollar is global reserve currency and there are oceans of dollars outside the porous border of the US economy. Same way that for 3-4 decades there was near limitless monetary inflation with concomitant price deflation due to the special arrangement between the US and China where money was sterilized into  a form of seller-financing. There are even more complexities to this theory that I have been discussing on ZH for 2 years. Many are becoming hip to the Biflation theory (see today's Casey Report cited on ZH) and it's gaining acceptance. But the Fed's Chicago monetarists get pale at the mere suggestion of it because it defies all that they have theorized regarding the cause and effect of their money printing and interest rate tweeking

Fri, 10/14/2011 - 18:51 | 1775622 SpeakerFTD
SpeakerFTD's picture

I have been arguing for a "Maslow's Hierarchy of Needs"-flation for the last few years.  The notional values of any product will move depending on the vagaries of the central banks, but the key is to understand the relative value between products.   The spread between products at the bottom of the hierarchy and the products at the top is going to be closed over the next few years.   In the worst case, you will find that a product at the top of the hierarchy that used to be valued at >100x of a bottom product will be valued at <1x that bottom product.

Sat, 10/15/2011 - 04:35 | 1776525 AldousHuxley
AldousHuxley's picture

here is a little can meet ALL of maslow's hierarchy of needs with..... a gun. That's what OWS really needs...guns. Just rob the banksters and sleep with their wives. fuck them as they fucked you. eye for an eye bitches!

Fri, 10/14/2011 - 19:11 | 1775662 jimmyjames
jimmyjames's picture

The old concept was one of  "a strictly monetary phenomenon".  However those concepts were designed to describe a much simpler world.

Same way that for 3-4 decades there was near limitless monetary inflation

Today, you could contract the money supply to zero and still have inflation.


I don't believe the concept of inflation and deflation as strictly monetary phenomena has changed at all-no different today then the clipping of gold by the Romans-

I agree that prices can run opposite to the money supply-but prices cannot hang above the market clearing level for long-affordability enters the picture and prices must clear-or your commodity is essentially worthless-

Yes we've had horrendous inflation for the past 30 years and to see where the inflation occurred-you need to look at both credit and money/cash-

Cash supply

Credit supply

The Credit supply makes the cash supply look pathetic-

Fri, 10/14/2011 - 19:23 | 1775709 Caviar Emptor
Caviar Emptor's picture

I agree that prices can run opposite to the money supply-but prices cannot hang above the market clearing level for long-affordability enters the picture and prices must clear-or your commodity is essentially worthless-

Affordability to whom? As the US consumer withers, the Chinese step in. All the holders of oceans of dollars around the world can support price and make it go even higher even if it's unaffordable to Americans . 

Fri, 10/14/2011 - 20:05 | 1775804 jimmyjames
jimmyjames's picture

Affordability to whom? As the US consumer withers, the Chinese step in. All the holders of oceans of dollars around the world can support price and make it go even higher even if it's unaffordable to Americans .


There is no oceans of dollars-(BASE) above-

There is debt that needs to be paid but obviously it hasn't been-

How in hell can China compete with 35 cents an hour wages?

China is like we were ATM'n the friggen house-living on credit-

China will crash and go into deflation-just like us-

Prices will meet affordability-they "must"

The growing protests around the world guarantee it-

Don't think for a second they're not looking down from their ivory towers with a chill running up their spine-

Fri, 10/14/2011 - 19:29 | 1775726 jimmyjames
jimmyjames's picture

Today, you could contract the money supply to zero and still have inflation.


The money supply in cash-cannot be deflated-the printed dollar is always somewhere-

You can stop printing but you cannot contract what's already there-

Credit is a different type of money supply-it can be expanded (Inflation) as we've seen and it can deflate in cloud of smoke-like we've seen-

Fri, 10/14/2011 - 20:47 | 1775881 cranky-old-geezer
cranky-old-geezer's picture



You and your theory are full of shit.

"Biflation" would mean inflation twice in a time period, like "biannual", not inflation and it's opposite.

On top of that, "inflation" has to do with the money supply, not prices. The money supply cannot be growing and shrinking at the same time.

Only morons like you use inflation / deflation to describe price changes.

There is no one word in the English language to describe price changes up nor down. Hence "rising prices" and "falling prices", two words.

Nobody says "stock XYZ inflated 3 points today" nor "stock XYZ deflated 3 points today". They say "stock XYZ rose 3 points today" or "stock XYZ fell 3 points today".

What you describe as "biflation" is not new, and you have no "new theory". It has occurred in the past. Expanding money supply in an economic depression characterized by severe demand collapse causing prices to fall overall, what's happening in residential real estate. Home values have dropped around 40% since mid 2007 while the money supply has grown around 35%, roughly offsetting each other, leaving home prices stagnant or slightly dropping (not "deflating"). Without that 35% money supply growth (true inflation) home prices would be down 60% or more.

If home prices fell 60% the real estate market would simply crash. Bernanke has been trying to keep real estate prices from falling 60% by expanding the money supply rapidly, softening the real estate price drop in nominal terms, but at the same time causing prices of commodities not experiencing severe demand collapse to rise rapidly, like gold and silver ...and milk and eggs and bread, etc.

Fri, 10/14/2011 - 20:55 | 1775914 V in PA
V in PA's picture

Hear-hear! Well said.

Fri, 10/14/2011 - 21:13 | 1775956 Schmuck Raker
Schmuck Raker's picture

Precisely my thought.

And, I'm staying out of that guys yard.

Fri, 10/14/2011 - 21:05 | 1775936 Caviar Emptor
Caviar Emptor's picture

Clearly you don't get it. Congratulations! You're in ignorant bliss. That can be a blessing, good for you. In the short run :-)

Fri, 10/14/2011 - 21:17 | 1775959 cranky-old-geezer
cranky-old-geezer's picture



Oh, so you're in the "it's different this time" camp.

Nothing is different this time.  All this stuff has happened before in varying degrees.  It's just more intense this time.

A "perfect storm" is not some new kind of storm.  It's just way more intense.

Fri, 10/14/2011 - 21:34 | 1776002 Caviar Emptor
Caviar Emptor's picture

The continent of Pangea once existed, and ceased to exist becuase of plate tectonics. Neanderthal man ceased to exist. The DoDo bird, T Rex, the Caspian and Java tiger too, and the California condor almost ceased to exist if it hadn't been saved. Monarchies have died, empires have crumbled, religions have become extinct, mighty volcanoes have too

Some changes come along that are game-changers. 

And all economic theories have a life-cycle: they emerge when the old ones fail, they have a heyday and then they too fail, get discredited and get replaced. Because the world never stops changing. Change is the constant. You can't feel yourself spinning through space but you are. And you can't always see the giant changes as they are occurring until after they become more obvious

Fri, 10/14/2011 - 22:02 | 1776060 cranky-old-geezer
cranky-old-geezer's picture



We're not dealing with bullshit economic / monetary theories here you fucking moron.  We're dealing with economic / monetary FACTS.

FACT:  Price collapse in a collapsing real estate market IS attenuated by expanding the money supply correspondingly.   Exactly what Bernanke has been doing. 

FACT: Bernake couldn't care less about the real estate market.  He cares about maintaining book values of real estate paper held by banks so the fucking banking system won't crash. 

FACT:  It's why they went to mark-to-myth accounting as well.  Trying to maintain book values of financial paper while the underlying physical assets collapse in value, creating a widening gap between the financial sector and the real economy.

FACT:  Without Bernake's 35% money supply expansion ...going to criminal bankers and our criminal government incidently... the financial system would have imploded by now, we would have hit the proverbial "reset" point, and we'd be in true recovery now ...unless our enemies around the world (of which there are meny) decided to take advantage of the opportunty and take America down once and for all. 

So far you have cited NO facts about the current situation, merely engaging in vague generalities ...exactly what those criminal Wall Street bankers do ...and our criminal government.  Vague generalties to placate the stupid sheep out there ...and hide the fact that they don't know what the fuck they're talking about you.

Sat, 10/15/2011 - 00:05 | 1776296 jimmyjames
jimmyjames's picture


Very good on the facts-

Fri, 10/14/2011 - 21:06 | 1775941 cranky-old-geezer
cranky-old-geezer's picture



Corrections:  Home values have dropped around 50% since mid 2007.  If Bernanke hadn't expanded the money supply 35%, home prices would have dropped correspondingly, around 50%, not 60%.  But 50% would still precipitate a real estate crash ...and crash the banking sector along with it.

Fri, 10/14/2011 - 18:32 | 1775569 LongBalls
LongBalls's picture

Long commodities. Short emerging markets.

Fri, 10/14/2011 - 18:37 | 1775581 ElvisDog
ElvisDog's picture

No. The term "Recession" has simply gotten more complex.

No, you're wrong. It's really very simple. A good part of the "growth" we've all enjoyed over the past 30 years has been fueled by two things: cheap oil and pulling forward demand by issuing debt at 2X (or so) the rate of real economic growth. Those two dynamics have reached the end of their rope and that's why we're in recession. That's also why there will be no "recovery" in the sense of resuming the previous growth profile but rather a re-set to a lower level of prosperity.

Fri, 10/14/2011 - 18:39 | 1775588 SheepDog-One
SheepDog-One's picture

Thats a good comment right there.

Fri, 10/14/2011 - 18:46 | 1775602 Caviar Emptor
Caviar Emptor's picture

I agree, but what you're saying shows that it is more complex in the sense that it's a "non-traditonal" way of looking at it. When you say "recession" to the average Chicago U-trained monetarist, what they see is a classic post-war business cycle recession: supply outstrips demand, costs rise to unsustainable levels and need to correct. But ultimately to them it's a very simple cycle, a pendulum that just swings back and forth.

That was all true when the system was in equilibrium, which it's not anymore as a consequence of a build up of forces over the past 4 decades of money printing, but also shifts in the global economy, demographics and natural resource allocation. It ain't as simple as they'd like it to be and that's why their policies are making things worse. 

Fri, 10/14/2011 - 18:06 | 1775505 Atlantis Consigliore
Atlantis Consigliore's picture

hes like Cramer, a fade, always was a fade,  


fade him on bonds, fade em on stocks, (when he bt stocks short)


every one a fade,  open up your pie hole either of you and say.


BI BI BI,  lol..... a fade.   

Fri, 10/14/2011 - 18:43 | 1775575 SheepDog-One
SheepDog-One's picture

Nah not like Cramer, he's more like another domino falling from optimism, or even thinking he can play this rigged market within a depression. 1 by 1 theyre capitulating.

Fri, 10/14/2011 - 23:29 | 1775638 baby_BLYTHE
baby_BLYTHE's picture

it is a shame (on their part) billionaries like Gross continue to doubt gold despite all the money that has been printed worldwide, 0% interest rates, debt/gdp ratios 90%+, unfunded liabilities, continued government intervention in the economy with keynesian stimulus programs, never ending war... I could go on. 

Continuting to doubt the fact we are not only at the end of a economic era of phony leveraged growth, but the end of the entire dollar world reserve monetary system will continue to smack the portfolios of these so-called equity/bond Titans

Fri, 10/14/2011 - 18:06 | 1775507 X.inf.capt
X.inf.capt's picture



Fri, 10/14/2011 - 18:08 | 1775510 buzzsaw99
buzzsaw99's picture

Gross just thinks he had a bad year in 2011. He will be looking back upon the past few quarters soon and regarding them as "the good old days".

Fri, 10/14/2011 - 18:11 | 1775520 Caviar Emptor
Caviar Emptor's picture

...The golden age. 

Fri, 10/14/2011 - 18:15 | 1775531 AngryGerman
AngryGerman's picture

...where fiat still worked

Fri, 10/14/2011 - 18:25 | 1775551 buzzsaw99
buzzsaw99's picture

when the last bond bear capitulated.

Fri, 10/14/2011 - 18:36 | 1775580 SheepDog-One
SheepDog-One's picture

Yea well buzzsaw a whole LOT of people will be looking back on today (in a couple months) thinking 'wow those sure were the good ol days'.

Fri, 10/14/2011 - 18:11 | 1775517 AngryGerman
AngryGerman's picture

blackjack bitches, blackjack.

Fri, 10/14/2011 - 18:19 | 1775539 HD
Fri, 10/14/2011 - 19:38 | 1775752 mjk0259
mjk0259's picture

Crap, could the CCP run someone in our elections please...

Fri, 10/14/2011 - 18:22 | 1775541 mynhair
mynhair's picture

Zero seems high for the retarded, errr, developed  economies.

Fri, 10/14/2011 - 18:27 | 1775547 JustObserving
JustObserving's picture

"Lots of safety in treasuries"??

It took 205 years to accumulate $1 trillion in US debt and now we are adding $1.7 trillion a year in new debt and about $6 trillion a year in unfunded liabilities.  And US treasuries are the safest investment - because they are backed by the Fed and gold and silver are backed by nothing.

The world has always been insane - just more so now.


Fri, 10/14/2011 - 18:24 | 1775550 reader2010
reader2010's picture

What's wrong with ZERO growth anyway? Fuck those perpetual growth motherfuckers.

Fri, 10/14/2011 - 18:28 | 1775556 mynhair
mynhair's picture

We need massive tax increases to spur growth and support the war in Uganda.

We now know what half darkies are capable of.

Fri, 10/14/2011 - 18:52 | 1775623 knukles
knukles's picture

So how amny wars do our fearless one have us in now?
Uganda (plus 2 others where the buffalo roam)
What am I missing?
Well glory fucking be, by this count it's at least 4 more than under that vilified predecessor warmonger.

Fri, 10/14/2011 - 19:41 | 1775761 Arkadaba
Arkadaba's picture

Imagine if the US gov brought home all those service men and women to this shitty economy. Now that would be an OccupyAmerica movement.  And you forgot Libya.

Both parties have fed the war machine.

Fri, 10/14/2011 - 18:29 | 1775562 bbq on whitehou...
bbq on whitehouse lawn's picture

Bill Gross should turn over his full year income to ZH. Because ZH was right and Bill was wrong.

Or Bill could just buy gold with his OPM and be right for the next year.

Bill is old stupid and most importantly WRONG.

Being wrong should lead to death. If other people or animals are wrong, guess what they die. So should CEOs. But that since we are a civil people he should just lose his earnings, income or other money for this year.

Face it Bill you are stupid, and if nature had her way you would be rightfully dead.

Oh thats right you will be soon, nature wins you lose again.

Fri, 10/14/2011 - 18:30 | 1775565 devo
devo's picture

Bill Gross is correct, but there could be the illusion of growth due to (a) inflation/hidden inflation (b) cooked books and (c) falsified government reports.

I write this knowing full well I just made myself sound like a gun-toting conspiracy theory hick straight out of Deliverance.

Fri, 10/14/2011 - 18:38 | 1775583 SheepDog-One
SheepDog-One's picture

Yea we've been running on illusions for a few years now, problem is someone has to pay now.

Fri, 10/14/2011 - 19:19 | 1775691 Don Birnam
Don Birnam's picture

...Just as long as you don't end up like Ned Beatty. Best stay away from that river.

Fri, 10/14/2011 - 18:33 | 1775573 ElvisDog
ElvisDog's picture

Dear Bill Gross,

On behalf of the 99%, let me just say "FUCK YOU".

Fri, 10/14/2011 - 18:34 | 1775577 SheepDog-One
SheepDog-One's picture

Long WW3.

Fri, 10/14/2011 - 18:40 | 1775590 Josh Randall
Josh Randall's picture

Wonder whom else is going to apologize...Greenspan anyone ? A former All American Gold Bug turned bubble buiding and popping machine whom handpicked the Bernank

Fri, 10/14/2011 - 18:55 | 1775630 knukles
knukles's picture

Wait for his book....
All rememberances will be that he was a major motherfucking hard currency guy but the presidents, congress, all the other central bankers pulled the wool over his eyes and if they hadn't tricked him, all would be well in the land of Skittle shitting Unicorns.

Fri, 10/14/2011 - 18:38 | 1775585 navy62802
navy62802's picture

These people who continue to lean on "traditional" economics and trading strategies are going to get royally fucked. It's already happening and we haven't even hit a black swan yet.

Fri, 10/14/2011 - 18:46 | 1775604 AngryGerman
AngryGerman's picture

"traditional" economics and trading strategies

...nth else than a feeble attempt to mass-market markets. there is no tradition economics that pays off.

Fri, 10/14/2011 - 19:07 | 1775659 SheepDog-One
SheepDog-One's picture

Definitely, thats why I discount anyone out there projecting where the market is going and when. 

Fri, 10/14/2011 - 18:45 | 1775601 ZeroBoBo
ZeroBoBo's picture

What's happened to the world's greatest bond fund?
Pretty darn simple: Paul McCulley left last year is what happened! woocoodanode he was the real brains behind the bond strategy?

Well, we did!

They are a bond fund and they don't see how austerity is about to his us right in the face with the wind-down of the ARRA and all its transfer money to states, municipalities and the unemployed? Mea Culpa is too nice.

Now FFS, Biflation? come on LOL

Fri, 10/14/2011 - 18:47 | 1775610 AngryGerman
AngryGerman's picture

girls gone wild: the biflation issue!!!


and as i said before: gross = blackjack


Fri, 10/14/2011 - 19:01 | 1775644 Caviar Emptor
Caviar Emptor's picture

lol. What about boobflation? If CNBS is a barometer, we clearly have been inflaitng for quite some time. 

Fri, 10/14/2011 - 19:32 | 1775737 ZeroBoBo
ZeroBoBo's picture

LOL, too good!

Fri, 10/14/2011 - 18:47 | 1775611 Everybodys All ...
Everybodys All American's picture

I just wonder when Moody's or Fitch decides it's time to downgrade the US debt and whether the US Treasury will hold up as well as it did under S&P's downgrade. My hunch is the outcome will be far different and being short US Treasuries going into that occurence would seem prudent. Would love to know what Gross thinks of that hypothesis.

Fri, 10/14/2011 - 18:49 | 1775616 AngryGerman
AngryGerman's picture

uuuhhhh, downgrade. now i'm scared. like that gonna happen. world reserve crncy is not allowed to be downgraded. but the day will come.

Fri, 10/14/2011 - 19:32 | 1775735 ZeroBoBo
ZeroBoBo's picture

The thing is, because of the sheer size of the U.S. economy and lack of an "immediate" alternative reserve currency, I don't think it will do much harm. That said, if the U.S. was the size of Denmark, the debt would be selling at $0.30 to the dollar...

Sometimes, bigger is better, and not only for fat cat, overpaid CEOs...

Fri, 10/14/2011 - 19:03 | 1775647 Die Weiße Rose
Die Weiße Rose's picture

very well said ZH

it is important to remember that Zirp, Twist and Tweak

does not represent a healthy Economy.

I am still waiting for the Age of Enlightenment -

Just because Bernanke says "there is no Inflation" does not mean there is no Inflation. Just look at your Food and Energy bills and your gas or Fuel bills and the cost of living, and compare that to your income.

I think that there is actually inflation of Commodity prices, caused by Bernanke's devaluation of the USD, which is closely linked to the 10 year Bond yield which stands at a lousy 2.19% for 10 year US Government Bonds.

But the public sees none of these cheap Loans, nor do Corporations who pay very high rates like 10.11% to borrow money .

So what Bernanke is doing is trying to Twist and Tweak Rates,short-term and Long, to give signals to the markets, in the US but also in Europe, that it is o.k. to borrow and take on more Debt to grow further and get the economy going.

But who wants to borrow at these rates ?  Everyone has gone super conservative. I could have bought a Property last year at an absolute bargain in the middle of Sydney, but i would have to take out a Loan with a Bank. With things being so uncertain

and having been free of Debt for 3 years now, I just did not want to be fucked over paying Interest to a Bank yet again, so I let it go, but I know I have lost out on an eccellent bargain.

Truth is, I have no trust whatsoever in this economy and in People like Bernanke or Geitner or the IMF or the ECB or any "Investment Banks " for that matter. All they want to do is take your cash and assets and then use everything against you,

as soon as you take on Debt. I have bought a property in the 90th in Sydney on the harbour, took out a loan and payed it off over 10 years. My Rate then was 16 %, but my Job was secure and I was 20 with a good income working in Advertising.

Things have changed so dramatically. No-one has Jobsecurity now! So how can you take out a Loan and take the risk of maybe losing it all ? How can you even start a Family with the cost of things?

The reason why I am doing well is that I made a decision with 40 that I did not feel secure enough to have a decent Life-style while at the same time taking care of a wife and Kids. I did the figures and I just could not do it. And I consider myself a pretty smart guy, I have done well, and I have taken many risks in my life but I just never had the guts to have a family or put kids in a World where everything is just set up to fail and to be exploited or enslaved.

I did not want my kids to grow up in a world where there are no more values left, but only inflated Prices and bills to pay.

In the last 20 years this world has changed dramatically for the worse. It has become cut-throat and savage.

People like Bernanke really believe that they are doing an excellent Job. But there are millions like me, the world over who know the real story, we know the real economy and the rates and costs we pay for shit, we know what real life is all about.

I admire people who are brave enough to have a family like my Mother and father did in Germany after WW2.

times were tough then too, but they were building something again after years of nothing and they found real joy and value of Life in every simple little thing, like a sunset or a walk in the park or going to a dance.

What has happened to real value in this world ? to real quality of Life and love and pride in the things we do ?

I always believed that we are creating heaven or hell right here on earth...

but this world looks more and more predatory and dangerous to me.

This is a world where the innocent become ensnared and addicted and enslaved.

This is a world where a young kid with dreams in their eyes can lose their soul and end up with a syringe stuck unconcious in some gutter. The difference between the average person and a derelict is a Job...but no-one is safe anymore.

tomorrow all your dreams could turn into a nightmare, and most of us know that.

that's why this system has to totally collapse before there can be a renaisance, a rebirth, a new beginning,

a new age of enlightenment.

written in a rage by wr;)

Fri, 10/14/2011 - 19:28 | 1775724 Don Birnam
Don Birnam's picture

Very fine commentary, sir. Eloquently put. The unenlightened despots who hold power will cling and grasp to the very end. It may be a very long time before another Enlightened Age dawns. There is much to unwind.

Fri, 10/14/2011 - 19:06 | 1775655 Caviar Emptor
Caviar Emptor's picture

Fed's 40-year plan (since 1971) simply drove a wedge between the "real" economy and the "paper" economy. They believed one could lead the other. But that's like saying that if you smoke enough dope the world will smile with you. Biflation grew out of the booming growth in the paper economy which happened along side the withering of the real economy. The middle class is caught in the, well, middle. Doing a split trying to keep one foot in one and the other foot in the second

Fri, 10/14/2011 - 19:06 | 1775657 High Plains Drifter
High Plains Drifter's picture

gee, what a gutsy call...........

Fri, 10/14/2011 - 19:09 | 1775664 SheepDog-One
SheepDog-One's picture

Yea real prescient, WTF Bill Gross is the new Nostradamus! In an obvious world economic crackup, he predicts '0 growth'? Wow real ballzy call!

Fri, 10/14/2011 - 19:11 | 1775670 disabledvet
disabledvet's picture

What else do you want from a bond guy? James Bond? He has nothing but doubts there too. I imagine he see's this sudden equity surge and goes "WTF?!" Whatever happened to "holding to maturity"? I imagine Wall Street of the West thinks just like Wall Street of the East: "how quaint!" Again "just pass the Poupon" Mr. Zero Coupon.

Fri, 10/14/2011 - 19:18 | 1775686 Ultros88
Ultros88's picture

Hey looks its a ||FaT MMaN|| clone. Gee Bill is really pretty Gross, isn't he. What's his net weight...  oops I mean net worth, again? Maybe our friend Bill is projecting 0% growth because he can't see beyond his bloated wallet.


Shut down the money market sweeps in your account. Don't feed the beast... It doesn't give anything back.



Fri, 10/14/2011 - 19:41 | 1775758 devo
devo's picture

I can't wait to watch Mad Money tonight.

"Buy!" "Buy!"..."Buy!"

Pure lolz

Fri, 10/14/2011 - 20:13 | 1775816 PulauHantu29
PulauHantu29's picture

Negative real growth is more accurate imo. Negative GDP growth at least through 2012.  If the dollar strengthens (such as if the euro drops to parity) my guess is you will see -2.0% or worse GDP growth with higher unemployment numbers.

And oh, yes, last time I looked John Williams was shwoing over 6% inflation.

Biflation is what some call it here on ZH.

Remember, seems like as long as the Bankers get their Mega-Bonuses, nothing else matters in this economy.


Fri, 10/14/2011 - 22:13 | 1776083 Atomizer
Atomizer's picture

Geithner: US To Play "Very Major Role" In Helping Europe


Rolls back the hands of time.. 

Mr. David Lipton assumed the position of First Deputy Managing Director of the International Monetary Fund on September 1, 2011. He served as a Special Advisor to the Managing Director of the International Monetary Fund starting July 26, 2011 before assuming his duties as First Deputy Managing Director. 

Later today.. 

Geithner: will prosecute myself for all illegal infractions - LOL

Round up.. 

" Geithner said that using U.S. tax dollars, through the IMF, to shore up Europe was appropriate, but he stopped short of suggesting that the U.S. give more money to the IMF or commit U.S. funds to the problem directly" - OK Timmah, we believe you. 

Sept 26 - Daily Wrap, David Lipton Talks about the 2011 Annual Meetings 

My high tax bracket should deliver better propaganda tales..

Sat, 10/15/2011 - 10:30 | 1776792 falak pema
falak pema's picture

Geithner: US To Play "Very Major Role" In Helping Europe

Thats why he has just said that increased IMF funding of EFSF complimentary facilities will be curbed by USA. 'They have to get their act together first'... Hows THAT for coherent reasoning. Whats going on behind the curtains in not just illogical, I'm sure its truly ugly, Oligarchy at play...beggar thy neighbour...race him down to hi-stake poker all the way to the precipice...and who knows...even beyond!

Fri, 10/14/2011 - 22:43 | 1776137 zorba THE GREEK
zorba THE GREEK's picture

I'm a Phillies Fan. They had the best record in baseball followed by the Yankies.

Both teams are out of the play-offs in the first round. Shit happens. Paulson crapped 

out this year and so did Bill Gross. That just goes to show you how illogical the markets

have become. I've have been holding physical PMs for 10 years now and I am up every year

for a total of over 400%. Am I an investment genius? Hell no. I was just too afraid of losing

everything, so I figured PMs will always have value and kept blindly adding to my position

by accumulating. So it turned out that a distrust of every paper investment by owning physical

PMs was the best investment strategy for the last 10 years. Who would have thought that?

Will fear be the best strategy going forward? Who knows? But under the present world

circumstances, I'm sure as hell sticking with it.

Sat, 10/15/2011 - 06:16 | 1776593 broke433
broke433's picture

This guy sucks, when he was shorting everyone went long 2x leverage and now that he has gone long everyone is shorting.

Sat, 10/15/2011 - 09:07 | 1776713 Grand Supercycle
Grand Supercycle's picture

SP500 / DOW daily charts remain choppy but bullish.

A reminder that SP500 / DOW weekly indicators now give bullish warning. If confirmed, it suggests significant equity rally this year.

Importantly, monthly charts remain bearish.

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