BlackRock’s Fink, PIMCO’s Gross Sound Off on Economy, Occupy Protests

“The current leadership I think can be faulted in a number of areas, but primarily by emphasizing consumption in terms of policy fixes as opposed to investment… What the Obama administration’s policies have really been oriented towards have always been towards providing benefits continuing consumption. What this country needs really is a policy which stresses investments.” 

Fink on what the U.S. needs to do to get out of its slowdown:

“We have to become a manufacturer again. We have to be more than just a consumer. And there are many ways we could restructure this economy for jobs, whether it is creating some form of infrastructure involvement with government and private sector.” 

Fink on what programs he would end if he was a member of the super committee:

“I would reach out to the American population and talk about that the entitlement program is at a crash course. It was designed at a period of time when the average American lived to 68… We’re going to have to address these entitlement programs. They’re going to have to be extended and beginning at a later age. That is a huge sacred cow. Privately, most politicians I talk to will say that. Obviously, publicly they can’t say that. And I don’t see any other way of reducing our deficits by $4 trillion to $6 trillion, which we’re going to need to do, any way but it’s going to be a combination of entitlement changes and tax increases of some form or changing deductions. At the same time, we’re going to have to change corporate taxation rates.”

Fink on whether now is an appropriate time to be taking risk in investments:

“I think Chairman Bernanke is telling you to get out of bonds. I mean, he’s pricing bonds to such low levels and they’re continuing to buy these securities that, you know, it’s impossible for me as a long-term investor to own bonds.”

Fink on Fed easing policies:

“I was a big believer of quantitative easing 1 and 2. I think Operation Twist was a mistake. And any more form of quantitative easing I would find troublesome. The Federal Reserve has two responsibilities:  Manage monetary policy. And they are the prime regulator of our banking system. So I think the Federal Reserve needs to be thinking more towards counter cyclical types of regulatory supervision.”

Gross on who he would vote for today if the candidates were the same as the 2008 presidential election:

“I am disenchanted. I’m a registered Republican. I voted for Obama. Was there change that I could believe in? I hoped there was, but there isn’t. The fact is, is that Washington is dominated by K Street and it’s dominated by finance and by you know by contributions from large corporations which don’t have the interests of Main Street and have the interests of Wall Street. So who would I vote for?  I’d vote for neither.” 

Fink on Occupy Wall Street:

“This is not an unusual period of time. If you go back in history, we have had protesting that shaped and changed government quite significantly. I’m actually very happy with Occupy Wall Street because I think it actually, for the first time in three years, we may have fringe element symmetry. And when you think about the Tea Party, the Tea Party in my mind said a lot of really good things. But it did shape obviously the 2010 elections in a very big way…. we have to admit as a member of the financial press and members of the financial community, I would say Washington and the financial community, and that’s embodied a lot by New York, we really did let down a lot of people…”Now, I’m going to admit it as a part of the financial community we let down a lot of people. I would like to see some politicians saying ‘We did the same thing.’  And then we can move on.”