El-Erian has some bad news – and some more bad news.
Photo: Alex Kraus/laif/Redux
It’s hard to remember a more pessimistic time in the market. The current bear market has already gone on much longer than the 2020 one, which — at just a month long — barely counts. And at the moment, both stocks and bonds are falling, an unusual phenomenon that did not occur during 2008’s financial crisis or even during the dot-com bust. (Lately, no matter what you do, you’re basically losing money; even if you were tucking dollars under your mattress, inflation is still eating into your savings day by day.) The specter of 2008 has clearly been haunting the dreams of many on Wall Street and beyond in recent days, judging by the amount of people who were glued to Twitter over the weekend wondering whether the market was about to have a “Lehman Brothers moment” in the form of a Credit Suisse collapse.
One distinct difference between now and 2008 is that, this time around, there’s a sense that the people who will be responsible for crashing the economy work for the government, not the big banks. What the next crash will look like is something Mohamed El-Erian, a prescient economist who is the former CEO of bond giant PIMCO and now serves as president of the University of Cambridge’s Queens’ College, has been warning about for some six years — including in his 2016 book The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse. El-Erian, an open-minded investor who has opinions on investment classes spanning from bonds to crypto, is not entirely pessimistic. We spoke with him about how bad the coming recession — he thinks there will be one — is likely to be and what he’s doing with his money now. (Spoiler alert: He’s not buying Bitcoin.)
I just saw your tweet in which you said, “What a…
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