When Bill Gross talks …

May 29, 2013 admin

Before the success of the E-Trade talking baby TV commercials, E.F. Hutton — a powerhouse firm of the 1970s and early 1980s that was eventually derailed by several scandals — arguably laid claim to the most memorable stock brokerage ad.

As you might remember, the E.F. Hutton commercials were set in a crowded environment, such as at the airport baggage claim area, aboard a train, a public park. The conversation would turn to the stock market, and one person would ask the other, “What does your broker say?” To which the second person would respond, “My broker is E.F. Hutton. And E.F. Hutton says …” At that point, others stopped what they were doing, leaned toward the speaker and attentively turned their heads to listen. The commercial ended with the voiceover: “When E.F. Hutton talks, people listen.”

There are high-profile financial market executives today who elicit a similar response. Once such thought leader is Bill Gross, managing director and co-CIO at PIMCO, who framed the much-adopted idea of “The New Normal” back in 2009. His comments and insights are not to be missed. He writes a monthly investment outlook that is a must-read, typically informative, insightful and entertaining.

If you didn’t catch his May 16 Bloomberg interview, check it out. The interview includes some good takeaways, including the line, “We see bubbles everywhere.” He also noted:

For a while, as long as the Fed and the Bank of Japan and other central banks keep writing checks and don’t withdraw, then the bubble can be supported. … When that stops, then perhaps there are going to be repercussions. It doesn’t mean something like 2008, but it means the potential end of bull markets everywhere, not just in the bond market but in the stock market as well because there are distortions aplenty.

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Larry Gray is editorial director of Institutional Real Estate, Inc.

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