Bill Gross

Futures Surge, Oil Rebounds As Fed Starts Historic Two-Day "Rate Hike" Meeting

The start of the Fed's most eagerly awaited two-day policy meeting in years has finally arrived with the market expecting Yellen to announce the first 25 bps rate hike in 9 years tomorrow with nearly 80% probability, and so far US equity futures are enjoying a last minute relief rally, while emerging market stocks rose for the first day in ten after the longest losing run since June. Europe's Stoxx 600 Index has also rebounded from a five-day losing streak, the worst in over four months.

"How Does It All Play Out?" - Bill Gross Explains How The Central Casino Banks' Martingale Strategy Ends

"How does all this play out? Timing is the key because as gamblers know there isn’t an endless stream of Martingale chips – even for central bankers acting in unison. One day the negative feedback loop on the real economy will halt the ascent of stock and bond prices and investors will look around like Wile E. Coyote wondering how far is down. But when? When does Martingale meet its inevitable fate? I really don’t know; I’m just certain it will."

"People Are Voting With Their Feet": PIMCO No Longer EM Bond King As Fund's AUM Tumbles 62%

Amid souring bets on Brazil and the general malaise across EM, PIMCO has been dethroned as the king of emerging market bonds. A fund run by Ireland-incorporated Stone Harbor has overtaken PIMCO's EM Local Bond Fund as the world's largest emerging market fixed income fund by AUM as rollercoaster bets on Brazil and the departure of both El-Erian and Gross weighs on investor sentiment.

The Next Level of John Law Type Central Planning Madness

The cries for going totally crazy are growing louder... the lunatics are running the asylum. One shouldn’t underestimate what they are capable of. The only consolation is that the day will come when the monetary cranks will be discredited again (for the umpteenth time). Thereafter it will presumably take a few decades before these ideas will rear their head again (like an especially sturdy weed, the idea that inflationism can promote prosperity seems nigh ineradicable in the long term – it always rises from the ashes again). The bad news is that many of us will probably still be around when the bill for these idiocies will be presented.

Futures Flat Ahead Of Payrolls; World's Largest Steel Maker Ends Dividend; China IPOs Return

As DB so well-puts it, "Welcome to random number generator day also known as US payrolls." Consensus expects 185k jobs to have been added in October but it’s fair to say that the whisper number has edged up this week with slightly firmer US data. It is also fair to say that even if one knew the number beforehand, it would be impossible to know how the market will react.

Bring On 'Operation Switch' - Bill Gross Calls For A Reverse 'Operation Twist' To "Benefit Savers And The Economy"

"But they won’t, you know. Yellen and Draghi believe in the Taylor model and the Phillips curve. Gresham’s law will be found in the history books, but his corollary has little chance of making it into future economic textbooks. The result will likely be a continued imbalance between savings and investment, a yield curve too flat to support historic business models, and an anemic 1-2% rate of real economic growth in even the most robust developed countries."

Frontrunning: November 3

  • S&P 500 Futures Slip as Aussie Gains on Rate Outlook; Oil Rises (BBG)
  • Xi Says China Needs at Least 6.5% Growth in Next Five Years (BBG)
  • Ben Carson Vaults to Lead in Latest Journal/NBC Poll (WSJ)
  • World's Biggest Banks Still Not `Truly Resolvable,' FSB Says (BBG)
  • Keystone XL's builder faced darkening prospects (Reuters)
  • Merkel Says Germany Must Step Up World Role in Refugee Crisis (BBG)

Frontrunning: October 23

  • China's central bank cuts rates for sixth time since November (Reuters)
  • Global stocks hit two-month high on dovish Draghi message (Reuters)
  • $6.5 Billion in Energy Writedowns and We're Just Getting Started (BBG)
  • Alphabet, formerly Google, sets share buyback, shares jump (Reuters)
  • Hurricane Patricia, Stronger Than Katrina, Nears Mexico (BBG)
  • TVA Cleared to Start First New U.S. Nuclear Power Plant in Nearly 20 Years (WSJ)

Axel Merk: Got Gold?

We think the market may have gotten ahead of itself, accepting the narrative that the Fed will raise rates as many other countries ease. We believe the market is gradually realizing that the Fed is far less flexible than it hoped it would be, thus causing a re-pricing of expectations. We don't think this will necessarily change the Fed's "desire" to pursue an exit. This re-pricing of expectations may have profound implications for the U.S. dollar, and with it, the price of gold.

Don't Tell My Mother I'm In Finance (She Thinks I Work In A Brothel)

In medicine, they have something called the Hippocratic Oath. It requires physicians to swear to uphold certain ethical standards. In modern fund management, there is no Hippocratic Oath. Whereas doctors are expected to “First, do no harm”, in modern fund management, iatrogenic illnesses hold sway. An iatrogenic illness is one that is caused by the physician himself. Fund management doctors seem to be doing the best they can to kill their own patients. Science has a word for this, too. It’s called parasite. There is a solution to all this insanity.