It Would Not be Unfair to say Bill Gross lost his touch
a while back, seeing he said the FED would stop at--was it 4.00%FF? And of course he's made a number of pronoucements in the last 24 months that simply have not come true. OK. Gross has done his pulbic mea culpas. That;s cool.
But here's Gross today:
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U.S. Treasuries Gain After June Job Growth Is Below Forecast
July 7 (Bloomberg) -- U.S. Treasuries rose for a second day after a government report showed the economy created fewer jobs last month than analysts forecast, damping speculation the Federal Reserve will lift interest rates next month.
Traders pared bets on the Fed raising the overnight rate between banks for an 18th straight time when it meets Aug. 8 after the Labor Department said employers added 121,000 workers in June. Treasury gains were limited as the report also showed wages accelerated at the fastest pace in five years.
``The bear market's over'' in bonds, said Bill Gross, chief investment officer at Newport Beach, California-based Pacific Investment Management Co., who manages the world's biggest bond fund. ``We're becoming bullish on the market, bearish on the economy.''
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Uh-Oh. Kind of makes you wonder. I'm adding this call from the Bond King to the universal consensus on The Street for slower growth, and lower earnings in 2H 2006. Let's throw in the consensus for a housing crash, and the peaking of inflation as well. Let's also add in what was, up until today, the consensus that there was no wage inflation pressure. And finally, let's note that the FED is already asserting the US economy is slowing.
I tell ya this is starting to look like a repeat of the past 3+ years, and in particular, the period immediately following last Spring's commodity, stock market, and gold smash.
Meanwhile, China's demand for oil, and petroleum products is exploding (that's not hyperbole), manufacturing is on the boil in Germany, and the mid-east is seeing a building and infrastructure boom.
There's no question it's time for US stocks to go down. Long, long overdue. You won't find me getting short this market however. I'll just stay in cash, or gold, or CAD or AUD stuff.
Best,
Gregor
PS: I would add Stephen Roach to the mix, but, it's important to be clear that every, single one of Roach's calls is hedged. He hedges in the final paragraph. Always. When he "reversed" his China crash call, he hedged. And even his Spring time bullishness on global "imbalances" (His tedious fudge word) was hedged. And he hedged publically as well. |
