There’s no reset button
Mohamed El-Erian, chief executive officer of PIMCO (not pictured below), painted a bleak picture of the global economy at a press briefing of Allianz Global Investors earlier today.
“This is not the crisis within the global system. This is the crisis of the global system,” El-Erian says.
“Internal circuit breakers are meant to deal with crises within the system. The crisis of the system challenges all the circuit breakers. There is no reset button.”
For the patient — the world economy — who is in intensive care after a cardiac arrest following the collapse of Lehman Brothers in September, governments will play a bigger role in getting the patient back on a recovery path.
“You can no longer predict asset value without thinking about the role of governments. Governments are no longer referees, they are players,” El-Erian says.