Wednesday, August 11, 2010

Candidly Speaking.....

At least they are honest.

Bloomberg is running this story this morning.

"The Federal Reserve’s decision to buy Treasuries and keep interest rates low will support “risk assets” without bringing down unemployment, said Anthony Crescenzi at Pacific Investment Management Co.

“Low volatility tends to be good for the interest-rate climate,” said Crescenzi, who is based in Newport Beach, California at Pimco, manager of the world’s biggest bond fund. “It does push investors out the risk spectrum generally. That tends to be good for risk assets.”

This shocking dose of reality courtesy of PIMCO only perpetuates the total farce our economic is.

Every one knows that the Fed, Treasury, and the Obama Administration are in it for the wealthy class. The official party line is we have to keep the economy stimulated for the benefit of society as a whole. The unofficial official policy favors the elite class at the expense of the population as a whole. If you want or need a job look someone where else. If you are a large commercial bank that is trouble? Please walk this way.
I don't know how PIMCO can think this is good? I am thinking that PIMCO will be big sellers of Treasuries and risk assets over the next few weeks.
These guys at PIMCO have been on the deflation bandwagen from the beginning. The Fed listens to them. I thought PIMCO was the 5th branch of government behind Goldman Sachs? They obviously think deflation is a problem, after all Bill Gross and Mohamed El-Erian are on BBG and CNBC everyday talking about it. Yet we have Tony Crescenzi saying risk assets look good here? Risk Assets take it in the grill when deflation is the theme. Maybe their correlations are all out of whack? Maybe all assets should always be =1 correlation going forward?

Maybe PIMCO wants out of risk assets and needs to create a bid from everyone else?

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