Bill Gross: Assets Are $15 Trillion Overvalued and Fed Will Keep Rates at 0% Forever to Keep the Fantasy Alive

0% rates = Japan's last 18 years.......................... USA Asset bubble already formed...POP

Bill Gross would make a great POTUS some day. The one word answer to the question, "What is the US taxpayer getting in exchange for all these GMAC bailouts?" SCREWED //////////////////////////////////////////////////////////////////////////////////////////////////////////////// No Senator should be in office more than 2 terms (12 years) and no Congressmen/women should be in office more than 3 terms (6 years) otherwise they do too much harm to us all. VOTE OUT the INCUMBENTS in 2010.

I fully agree with his analysis, all the growth we have seen last two decades was just another big giant ponzi scheme.

Go PimpCo! With the interest rate at 0%, what if the market goes down. Seems like we are out of tools to use if there is a event that effects the markets in a wide spread effect. Better hope growth goes perfectly for the next few years.

To simplify the economy is the answer to correct this crisis. Wall St. keeps creating new names for the same instruments. They call it leverage when actually it is DEBT. They came up CDOs to cover-up the leveraged mortgage packages. They offset those with CDS instead of packaged mortgage (CDOs) INSURANCE to avoid the various State government scrutiny. Then there are the many derivitives which is just another form of leverage DEBT. At the root this is mostly a new name language issue.

Free money always leads to inflation. Always has, always will.

It's that "as asset prices Return to Trend" that's killing most everyone with even moderate leverage.

I have always argued, how can a small business typically sell for 2-3 times earnings, yet public companies trade at 10-20-30-100 times??? Makes no sense, but now it makes perfect sense. Artificial. When will the government realize, the market will eventually price it in? I hated when Greenspan kept lowering rates years ago.... a move that appeases wall st. You can't keep buying your way out of hard times, it simply puts the inevitable off further and creates an even bigger crash when it does.

Is this guy suggesting that the Mark to Market fallacy is allowing banks to not mark into the aisle. Oh yeah, he's right! All the same, we the taxpayer will abosrb this mess. If you look at the programs in place, many investors are now refinancing the mortgage loans into FHA at 125% of these bloated values. The theatre is already crowded, and when someone finally screams that the assets are in fire, thye will all pile into the aisle at once leaving us with a shitload of devalued assets and the need for an actual dollar devaluation to manage the repayment of the 26 trillion in in eventual government debt that will have occured through the lender bail-outs. What about the 60 trillion in unfunded liabilities. Devaluation will reduce that to 30 trillion. Jackson said it best; If you take profits-you keep it all. if there are losses they are charged to the bank. The ole central bank will devalue out its debt and take the last of American prosperity with it. It was a nice run folks, but ddddaa dats all folks!

Bill Gross is right. Let the dolllar drop. The rest of the world has conspired to undervalue there labor (through artifically lower currency) so they could aquire our industries we later abandoned to them. We have Walmart and coffee bars left but NO JOBS! What happened to Detriot is going to happen to the rest of the country. Hold on. We have dueling printing presses with the Chinese on who can lower their currencies from the other. At the same time we have a socialist president handing out candy to every constituancy (The Candy Man) running up the deficit but tragically burdening business with more taxes as businesses are crippled with this recession. The more entitlements Obama passes out will just mean a lower currency in the end. Indirectly this will be the greatest flat tax in history. Good for them but Machiavelli would say "so what". The people won't know any better, so long as your neighbor has less you can accept less. Since socialism is a manifistaion of human jealousy anyway a lower currency won't matter. Self reliance, accountability, risk/reward IS OUT, entitlements ARE IN! until we hit the wall, then the people in this country will learn. So let the dollar fall!

Inflating assets has always been the fix for whatever ails the economy but it's reached the tipping point because no one's income other than Wall Street's has kept up with the rate of inflation.

In a economy like in Japan with prices going down the sensible Japanese thing to do is to put off buying if you can go without it. But if enough people do that then the companies layoff workers, decrease wages and benifits, reduce inventory. The workers at first assume that they might not have to work as hard and long for the same buying power cut back in hours has cost them the purchasing power. Millions go hungary but there are not enough taxes being taking in a reduced levels to feed them all so that they collectively command a revoulutionary power over the future direction of the nations and shared wealth of all citizen. Half of your is theirs. The lesson for America her is that with housing falling every forclosed or empty house is essentially owned buy every other American. Your wealth and your future even if you have been crafty and cleavor and rented for decades is still mostly bound to the future forclosure situation. KCA

When Wall Street became Gall Street, Main Street became Pain Street. Pain Streeters, take two aspirins and go to bed. Gall Streeters, take the whole bottle and go to hell.

To fix the economy, either asset prices have to come crashing back down or incomes have to explode upward at a rate never before seen. Highly unlikely incomes will increase with so much access to cheap labor overseas so that only leaves the latter. With the Fed determined that they will be no deflation on his watch, doing everything possible to keep asset price high, the economy will grind to a halt or grow at a snails pace. A deflationary cycle is a normal part of every economy, unfortunately, this one is quite painful because the bubble is so huge. You enjoyed the gain, now enjoy the pain. Funny, I didn't hear anyone complaining about subprime mortgages when an overheating housing market was driving their home prices through the roof. As if they didn't know real estate prices were increasing at an abnormal rate. If you didn't complain about the benefits you received from asset prices overheating then shut the hell up and enjoy the plunge.

Wow what a shocker, one of the bigest bond funds thinks that equities are overvalued.

Finally someone has the balls, and the statistics, to tell it like it is. BRAVO. Executives must stop shipping jobs and production out of the country in order to book max profits. Why, because it destroys the fabric of our society and breeds wankers who push paper and brag about their Manhattan lofts.

Awwwwww ..... did Obama fall down and skin his knee? Don't worry, the dumbasses that voted for you before are gonna vote for you again. Don't forget, they ARE some of the dumest asses you ever wanna meet.

if you understand "deflation" you understand what we have here in America today. nothing really has the same value it did a few years ago, rare cases being the exception. USD is weak and will stay the same or only go down from here. inflation is a concern, but not for the next year or so probably. low wages, low interest, low dollar index. 60's for the dollar? that's what's most likely coming or lower. China can't dump the USD too fast, but their strategy is to hold USD's less and less over time, meaning a contrived plan to divest in USD's and move to other investments. and "long term" positions for U.S. markets are a foolish move for the most part. it's all a house of cards, nothing substantial with a real base. none of the problems that caused the collapse have been adequately addressed, only had a band-aid put on them. the "market" has nothing to do with the economy or the health of the country in general, and the trend for the economy and the country is to go down.

Deflation won't last! Inflation and higher taxes is the mantra of the Liberal Nation. Uncle Sam can and will prevent a complete economic meltdown. The real forecast is higher taxes and inflation...Deflation is temporary, perhaps 18 months or so...Folks who are on fixed incomes are getting pounded by the banks and grocery stores not to mention health care! Eventually everyone will adjust to a loaf of bread costing five bucks or so...How bad can that be? It's just bread right? It's hard to believe that avoiding depression actually helps those who need help the most! Folks need to see price stability, all they really get is more useless rhetoric and higher prices on all the basic items we need. Sad Sad Sad...

BullyTheBear - Wednesday October 28, 2009 12:39PM EDT He, we're comming closer to the TRUTH! So, my months long Rethoric of SHORT the CRAP out of EVERYTHING seems to be "on the right side of the gras", eh?........... you would have been annihilated by shorting if your timing was wrong - which, in your case, it was.... TIMING and stop losses equals good strategy.. just being sure things will go south doesn't mean anything...