PIMCO's Investment Outlook

(PIMCO.com) Here I go again! Gosh it was only six years ago that I cemented my place in stock market history by predicting that the Dow would fall from 8,500 to 5,000, instead of going up to 14,000 where it peaked in October of 2007. Well, I could use the standard set of excuses: 1) No one else saw it coming, 2) I was misinterpreted, and taken out of context, 3) I was tired, overworked, and had family problems, or 4) I had just come out of rehab. But these days what really works is a full confession. I mean, like, uh, it was totally my fault and I take full responsibility. The fact is I was only off by 9,000 points. That’s my story, and I’m stickin’ to it.

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The issuance issue

(Economist.com) “ROLL up, roll up. Get your government bonds here. They may not pay much, but they’re safe. Buy ’em now in case stockmarkets don’t last.”

As the recession deepens, finance ministers round the world may be forced to resort to the tactics of the market stallholder. Politicians hope that deficit financing will be the way to stimulate the economy. But someone has to buy all those bonds.

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North Carolina: Watching and Waiting

(Economist.com) America’s second-biggest banking city comes to terms with the crisis

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Turning Japanese?

I thought we were trying to avoid the same mistakes the Japanese made?

(Bloomberg) Federal Reserve Chairman Ben S. Bernanke signaled he’s ready to dig deeper into the central bank’s toolkit after cutting interest rates almost as much as he can, opening the door to a shift by policy makers this month.

Bernanke yesterday said he may use less conventional policies, such as buying Treasury securities, to revive the economy, because his room to lower the main U.S. rate from the current 1 percent level is “obviously limited.” Even so, reducing the rate is “certainly feasible,” he said.

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Treasuries In Bubble Phase, Merrill’s Rosenberg Says

(Bloomberg) Demand for Treasuries has reached the ‘bubble” phase seen among technology stocks in 2000 and real estate six years later, according to David Rosenberg, chief North American economist at Merrill Lynch & Co.

“The 10-year note yield is now firmly below the 3 percent threshold and this next leg down in yield will undoubtedly represent the classic mania-turn-to-bubble phase that quite plausibly sees an overshoot to or even through the April 1954 lows of 2.3 percent,” New York-based Rosenberg said in a research note today.

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Congratulations, Its (Officially) a Recession

(Ritholtz.com) The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.

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Reaping the Whirlwind!

(GMO-Jeremey Grantham Qtly Letter)

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