In a highly personal and at times emotional February Investment Outlook, PIMCO Chief Bill Gross examines life, death, personal loss and Virginia Woolf. Peppered with a significant number of literary and cultural references (even for Gross), the meandering post takes its time in getting to his point–namely, the global economy and financial marketplace are still functioning under the assumption that cheap and abundant credit “is always a positive dynamic.”
Reflecting on the recent birth of his granddaughter and the death of his “beloved” brother-in-law, Gross (left) writes, “Having now matured to trust reason more than faith I offer not so much a resolution, but an alternative to the unanswerable question of Virginia Woolf and the departed souls of Jeff Stubban and billions of others. If we don’t meet again–up there–then perhaps we’ll meet once more–down here. After all, the one thing I know for sure is that we got here once–and because we did, we could do it again. Rest easy, dear Jeff, and welcome to this world, dear Caroline. We’ll all just have to make it up as we go along.”
“Make it up as we go along,” is what he accuses Fed Chairman Ben Bernanke of doing through” a plethora of disparate policy solutions.”
“Letting your pet retriever roam the woods might do wonders for his ‘animal spirits,’” he writes. “But he could come back infested with fleas, ticks, leeches or worse. Fed Chairman Ben Bernanke, dog-lover or not, preannounced an awareness of the deleterious side effects of quantitative easing several years ago in a significant speech at Jackson Hole. Ever since, he has been open and honest about the drawbacks of a zero interest rate policy, but has plowed ahead and unleashed his ‘QE bowser’ into the wild with the understanding that the negative consequences of not doing so would be far worse.”