Bill Gross warns that lower rates won't boost stock markets further
Bill Gross is out with a rare commentary on markets.
The former 'bond king' is retired from PIMCO and Janus Henderson but has cobbled together his own self-aggrandizing website where he's published a new article.
His argument that the the past 15% rise in US equity markets is 'solely' because of central bank easing and that 25% of the rise since 2009 is because of cheap money.
But can bull market equities be sustained even withadditional easing on the part of Central Banks? Probably not, because Governors and Chairs of these presumably prescient institutions are becoming wise to the negative effects of rates at zero (or less)that literally rob small savers and larger financial institutionssuch as banks, insurance companies and pension funds of their ability to earn historically "guaranteed" carry that equate assetswith liabilities and prevents them from earning an assumed return that avoids haircuts and even bankruptcy.
Gross writes that in the absence of substantial fiscal stimulation, the economic and asset boom may have reached an end. He argues for owning high yielding, secure-dividend stocks.