Comments on: El-Erian on Greece and its consequences A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: HBC Sun, 09 May 2010 19:56:11 +0000 Trouble with El is, he’s not just pointing out how complicated the world has gotten: he’s taking a fork-tongued approach to the public sector and glossing over after the fact how Greece got the patsas kicked out of it – and by whom.

It’s rather superficial and indecently early to write Greece off as something that “just happens” but that’s what El’s up to here. Otherwise, as many self-fulfilling prophecies go, El’ll probably appear right, especially after his IMF cohorts have finished wrecking the joint. But nobody who really matters will applaud.

By: beyazkorsan Sun, 09 May 2010 12:43:53 +0000 this is very interesting… I don’t know if this is true or not. I could not find any other sources to verify this story.

Israel buys 13 Greek islands..

By: cranston Sat, 08 May 2010 11:03:50 +0000 El-Erian is representing the interests of still active portions of the defunct Turkish Empire. As such his remarks regarding Greece and other ‘peripheral’ European powers are to be taken less as investment advice and more as scurrilous racial and religious remarks. A lot of money does not mean a lot of common sense.

By: ErnieD Sat, 08 May 2010 00:43:03 +0000 I agree with your comments about Pimco trying to drum up business. They have been effective at this.

For my own personal situation, Pimco Total Return is the only bond fund offered in my 401k. A “cash” alternative is a GIC offered by a bank. We also have a full range of target date funds based on the Dow Jones target date indices, so I can get a diverse bond index at varying asset percentages through that.

I think we are in the middle of a once or twice in a lifetime economic and financial crossroads (1929-1945, and 1972-1982 are the other similar events over the past 80 years). Normally, I have been a buy and hold investor, even through the crash where I had focused in 1999 on avoiding tech and so did fairly well through that meltdown even though I was 100% in equities.

Since 2007, I have made very uncharacteristic moves in reallocating my portfolio. One of my moves has been to put much more money into Pimco Total Return to balance my employer-funded ESOP and because of their agressive active portfolio management. At the moment I have my 401k portfolio split between the Pimco fund and a target date fund to get a mix of active and index bond investing.

The last few years have proven that “conventional wisdom” by the “pros” has in many case been badly founded on faulty principles. Pimco has been one of the best at trying to get ahead of the curve on the debt instrument side. However, like any active manager, they may make a significant mistake at some point, so I look to counterbalance their approach with an index approach.

I don’t think there is any way to identify who is “right” among all of the prognosticators, but it is clear that multi-decade world-wide lows in interest rates, multi-decade world-wide highs in total debt, and 10-yr real PEs of 20 for the S&P 500 are not a recipe for easy investment success over the next decade or two.

By: Sensei Fri, 07 May 2010 21:17:17 +0000 Is “sovereign default” really the best term to use re: Greece? If you are forced to default are you really sovereign? A true sovereign does not need to borrow (or tax) to “finance” government spending.

It’s a bit off blaming this crisis on “bloated public finance.” It’s not the size of public deficits in EMU nations that presents the fundamental systemic risk – it’s the fact that EMU nations like Greece MUST finance their expenditures- and these bonds represent real debts, payable to private banks, and default would have catastrophic knock-on effects. Can’t find the Euros you need, miss a payment, blow up your banking system. Why is the EMU a good idea? Honestly.

If default does occur, where would all the smart money go? To US Treasuries, of course. Why? Because everyone knows (deep down) that the US is a real “sovereign,” unlike Greece, and the US could never be forced to default on its obligations.

By: maynardGkeynes Fri, 07 May 2010 20:25:55 +0000 No question that El-Erian is as good as they get. But I’m not sure if any “mass market” Pimco fund gives you El-Erian straight-up, even as they like to put him and Gross as their face to the world. Total Return, the big one, is just too big to engage in the tail risk strategies that one might want. I think El-Erian was going to start a market neutral fund, but I haven’t seen anything about that lately.