Bill Gross Starts Q4 With A Cold Shower: "Forget Double Digit Returns - Bonds, Stocks And Real Estate Are Overvalued"

Tyler Durden's picture

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GeneMarchbanks's picture

What's this about a Golden shower?!

Edward Fiatski's picture

Oh, my, goodness gracious me!
 I’m a gay man’s golden fantasy!
Programmed for homo-ecstasy,
Ten million forms of gay positioning.
 For my golden shower, you must pay a fee,
But R2-D2 gives it up for free.

-*R2D2 beeps
R2D2, watch your language!
Always having sex with robotic strangers!

LowProfile's picture

"There are no double-digit investment returns anywhere in sight for owners of financial assets."

...Note key word emphasis.

101 years and counting's picture

3x short S&P and financials can easily yield 10%+.


King_of_simpletons's picture

Cash is still the king, unfortunately.

LowProfile's picture

Timing is everything, yes?

Spitzer's picture

No yield, insane currency risk. Good luck with double digit returns.

ZeroPoint's picture

Unless Bernake waters it down further. Then you will see investors make the hard choice gambles as to where to place their shrinking bets. My guess is people will be have to pick commodities as the horse to ride until the markets finally are able to correct.


maxmad's picture

Dont get me wrong I think Johnny Cash was outstanding, but I thought Elvis was still king?

vato poco's picture

Nope. As Waylon told us all, Bob Wills is *still* The King.

zoomer's picture

In 1980 Regan was the Pres and we had Johnny Cash and Bob Hope.

Now Obummer is Pres and we have no Cash or Hope.

Careless Whisper's picture

The Careless Whisper Morning Report


Tipping Allowed: NY City Police Openly Admit Accepting $4.6 Million Cash "Gift" From JP Morgan Chase

Kissinger: China Returning To Its Rightful Place As Most Powerful Nation

Money Grabbing Red-light Camera Company Put Miami Mayor's Son On Payroll -- Mayor; No Problema

Teachers Union Places TV Commercials Supporting "Jobs" Bill

Darth Vader Coin Accepted As Official Legal Tender



PulauHantu29's picture

RE overvalued an understatement.


TheSilverJournal's picture

Bonds overvalued an understatement.

Panafrican Funktron Robot's picture

Indeed, I cashed out of my muni's over the course of September, reasoning:

1.  It's looking increasingly unlikely that stocks are going to even break even for the year.

2.  Public pension funds are still largely assuming that stocks are going to maintain their 8% annual yield.

3.  Public pension funds are largely going to miss target earnings, thus making the funding shortfalls worse than they already are.

4.  Pension obligations are generally first in line ahead of pretty much anything in state budgets, to the point where they are often protected by state constitutions.  


5.  State budgets are going to experience yet more pain, and these pension bullet holes are going to be gaping enough to likely warrant further downgrade actions.  

And this doesn't even take into consideration likely sales tax disappointments and property tax shortfalls from continued consumer and housing sector weakness.  Pension funds, on their own, are potentially destructive enough to severely screw up state finances, even in states that are relatively well-run from a fiscal perspective.

Mercury's picture

And pontificating on a theme started many months ago by Zero Hedge with observations on the relative contribution to income from labor and capital (a modern day warning to Marxists), Gross warns that "both labor and capital suffer as a deleveraging household sector in the throes of a jobless recovery refuses – if only through fear and consumptive exhaustion – to play their historic role in the capitalistic system. This “labor trap” phenomenon – in which consumers stop spending out of fear of unemployment or perhaps negative real wages, shrinking home prices or an overall loss of faith in the American Dream – is what markets or “capital” should now begin to recognize"

Even worse....we have a consumer based economy and whole lot of that consumption is paid for with passive capital (savings, pensions, grandma's muni bond income etc.) Even if ZIRP is stimulative to employment it hurts consumption more and is thus a huge drag on the economy in addition to being a wealth destruction machine. At the consumer level ZIRP doesn't prod people into spending and risk assets, it causes them to hoard and cower in fear and uncertainty.

Let government-clogged markets clear, repeal ZIRP and let the market price risk accordingly and accurately.


jm's picture

What's his encore, talking about his flabby ass that was once so tight?

Anyway, this is classic equity revulsion, bitchez.

Buy yield cuz it's all you're gonna get for a while.

Panafrican Funktron Robot's picture

Yeah, definitely could have done without the imagry of Bill Gross.  Then again, it was an effective descriptor of both the stock and bond markets.

Snakeeyes's picture

Ya think, Billy?

We are in a liquidity trap. Banks are contracting credit. Ergo, housing is STILL overvalued.

buzzsaw99's picture

...and capital suffer the capitalistic system.

gross is full of beans.

ivars's picture

Here i did some further checking on patterns to make some sense in future events predicted by some of my charts:

By comparing the interesting way DJIA follows Greeces Athens General index with a 1,5 year delay, including current drop ( august/september) . The patterns match almost exactly, and also compare well to my own prediction of DJIA 2011-2013 ( see in the post I referred to).

Briefly: First, have a look at the pictures :

DJIA/Greece comparison April 30, 2011:


DJIA / Greece comparison October 3rd, 2011:

Longest DJIA prediction I have made on April 26th, 2011( not from Greeces graphs, from other patterns I use) :


Since both currencies are pegged ( Greece to EUR, USA to being a world reserve currency) , at the moment where the predicted DJIA stops falling like Greece but becomes stable or even grows due to inflation, the USA DEFAULTS and deflation is replaced by inflation. By looking at Greeces graph that takes a sharp downturn(on Greeces graph, April 2011)  into levels DJIA will never reach, and calibrating the time axis of DJIA graph forward, the day of inflection point  is Jan 1st, 2015, or roughly, H2 2014. That is the day when USD will be unpegged ( as Greece is still pegged) = meaning the USA will default VERY soon after that or at that time, and USA  deflation will change to inflation.

That gives some time for silver stackers, I guess, since as long as USD stays as a reserve currency and deflates, and the price of silver in USD goes up at the time deflation begins, it will allow them to purchase more other things with this silver. This period will last for 2 years-long enough to prepare for what comes next. This crisis is much more stretched out than 1929 crisis.

The question still remains, why at deflation start, silver will move up 3 times while gold only 10-20%. But now its more clear where to look for answers as the scope has been narrowed.

SheepDog-One's picture

Bonds stocks and real estate ETF's overvalued? No WAY??

Josh Randall's picture

Exactly -- this is all conjecture, harumph, harumph harumph....I didn't get a Harumph out of that guy!

you watch your @ss

mayhem_korner's picture



In the current climate, nominal yield is subordinate to both liquidity and storing purchasing power.

johnnymustardseed's picture

Fat Cat calling himself a Fat Cat....interesting

scatterbrains's picture

When he said real estate he just meant residential right ?  If he's implying that mall prices may be weak then he's bordering on being a propagandist and should expect a drone fly over shortly.

Panafrican Funktron Robot's picture

Blackstone is perfectly healthy.  Their recent shopping mall acquisitions are going to work great.  Also, that lawsuit is going to be resolved amicably with no net loss to the company.  

There, covered your pasty white ass for you, Bill.

midtowng's picture

So labor needs some of the pie, huh? Amazing how many people who hate unions must acknowledge that labor needs some of the profits for the capitalist system to work, yet somehow expect the capitalists to share a piece of the pie without being forced to.

buzzsaw99's picture

they aren't capitalists. they are crony crapitalists and fascists to a man.

Thulsa Doom's picture

Agreed. And how does a crony capitalist who speculates with free money via the FED, pushing papers around and making "money" on margin, supposed to share his profits with those doing the labor? There is no labor in pushing papers around.

buzzsaw99's picture

Contemplate this on the tree of woe.

MachoMan's picture

I wish to speak to you now. Where is the Eye of the Serpent? Rexor said that you gave it to a girl; probably for a mere night's pleasure. Such a loss. People have no grasp of what they do.

mayhem_korner's picture



Unions get in the way of labor's participation in corporate returns by diminishing the returns generally and by imposing forms of compensation that aren't linked to collective productivity.

buzzsaw99's picture

Execs get in the way of labor's participation in corporate returns by diminishing the returns generally and by imposing forms of compensation that aren't linked to collective productivity.


Fixed it.

mayhem_korner's picture


Yeah, it was all those executive bailouts that put GM under.  /sarc/

Panafrican Funktron Robot's picture

My first read through this, I thought you said "unicorns" as opposed to "unions".  I'm pretty sure my reading was correct here.

Messianic's picture

Unions are fine until they start pushing for legislative/legal/tax privileges the way the corps do. As soon as they do, they've become rackets for rich labor bosses and shills of a different breed. Every union tends to this direction given enough time, as every (large) corporation does...

I see no reason to cheer for "the little guy" (so defined as a union man) when he has millions of other little guys and a bunch of politicians manning his proverbial artillery and guaranteeing him greater compensation merely because of his membership, not his productivity or relationship to his employer.

Bicycle Repairman's picture

So the problems occur when labor or capital turn to government for "assistance"?

Panafrican Funktron Robot's picture

I'd be for the elimination of unions if there was complete transparancy regarding compensation for labor, and compensation in general was actually linked to performance.  The norm at most non-union businesses is to squeeze production at a flat payment rate, with that rate being subject to an unfair information advantage (people don't generally know if their rate of reimbursement is appropriate for their work effort and expertise).  Global (as opposed to executive-only) profit sharing is probably the most workable solution.  

mayhem_korner's picture

The norm at most non-union businesses is to squeeze production at a flat payment rate, with that rate being subject to an unfair information advantage (people don't generally know if their rate of reimbursement is appropriate for their work effort and expertise).  

And you know this because you've worked at how many such places....?  You know not what you say.

Most businesses are small and compensation is clearly tied to performance.  No one is forced to work at a "giant, bloodsucking corporation."  (But we are forced to pay school taxes for union teachers' salaries, which aren't tied to performance, ironically).

One thing about liberal pablum, it's full of unsupported generalizations.

DeltaDawn's picture

Labor has been getting a piece of the pie, but those pies were baked in a fiat oven since 1971. We now have only shit to put in for the filling.  

Don't blame the factory owners, the laborers have also been shopping at Target instead of buying domestic goods. Those cheap prices were great, but now all the jobs have been sucked away. Can't have it both ways. We can't all be college-educated consultants and service-providers in the information age, now can we?  Not to mention, our open borders....

Remember your precious unions are international. They just want your dues and power. They did serve a valient purpose in the past, but they can't make an infertile dry cow produce milk.

Someday we might be working in sweatshops and exporting the stuff to China. 

Bicycle Repairman's picture

We have a systemic problem and no leadership.

CapitalistRock's picture

No one "shares a piece of the pie." You earn it, you idiot. Create something other people want and they will offer you money for it. Same is true for labor. Simply fill a demand. Have employable skills.

SheepDog-One's picture

We're in the final stages of the Great Wealth Transfer, last major move is crushing all 401k's and pensions. Thats whats going on now, and its working perfectly as everyone expects their nest egg retirement to be bailed out by the Maniacal Monetizers...this is going to be painful to watch.

Thulsa Doom's picture

I'm new here, SD1, and over the last year or so I've always enjoyed reading your comments. I've always thought the creation of 401(k)s was the most important enabling mechanism for the speculators and day traders out there who make money on margin - an endless stream of buy orders automatically coming into the market? No matter what the market conditions? Lambs to the slaughter. It was only a matter of time before people woke up to the fact that the 401(k) system is a scam, and people started bailing out. Get out while the getting is good - the early withdrawal penalty don't mean shite when taking a "long term perspective."

buzzsaw99's picture

welcome. we're glad you de-lurked.