Pimco's Crescenzi Is Bullish on Bonds

Pimco's Crescenzi Is Bullish on Bonds

Friday, 27 Dec 2013 07:27 AM

By Michael Kling

http://www.moneynews.com/InvestingAnalysis/Crescenzi-bonds-rates-term/2013/12/27/id/544003

Although many investors are fleeing bonds in expectations that rising interest rates will send bond prices down, Pimco Executive Vice President Tony Crescenzi makes a bullish case for bonds.

Long-term bond rates will rise as the Federal Reserve tapers its quantitative easing (QE) stimulus, but short-term rates will remain low, Crescenzi tells CNBC.

"The Fed is losing its grip on longer rates. Short rates it controls, and it will control them until a rate hike is near, and that's somewhere in 2015 — probably the latter half given what the Fed told us."

The Fed prepared markets for rising long-term rates in May when it said it would soon start reducing its bond purchases. As it turned out, the central bank delayed its taper decision until this month, announcing that it would shrink the monthly bond purchases from $85 billion to $75 billion.

"There is momentum in the economy that will scare bond investors as the year goes on," he predicts.

The 10-year Treasury yield should remain below 4 percent, specifically between 2.75 to 3.25 percent, next year because the economy has momentum that people are banking on," he states.

While that momentum will plush up bond rates to new highs, it won't reach "a meaningful high," he adds, forecasting a "normalization for rates."

There's been a "huge shift in positions already," he notes.

Investors pulled a record $77.5 billion from bond funds in 2013, data from research firm TrimTabs indicate, according to CNNMoney. However, rates remained low and the bond bubble that many experts had predicted never materialized.

Bond yields moved little when the Fed announced its plan to cut QE by $10 billion, a sign that markets have already price the reduction.

"We already went through this drill once," Matt Freund, a fund manager for USAA, tells CNNMoney, referring to May when speculation about the Fed's taper caused yields to spike. "The markets are a quick study."

Chris Gunster, head of fixed income portfolio management for U.S. Trust, predicts bonds will behave more like a gradually deflating balloon rather than a bubble. "Bubbles tend to burst. Balloons just tend to glide down."

Pimco

Mohamed A. El-Erian is the CEO for the Pacific Investment Management Company (Pimco), and a trustee at the Carnegie Endowment for International Peace (think tank).

Note: Open Society Foundations was a funder for the Carnegie Endowment for International Peace (think tank).

George Soros is the founder & chairman for the Open Society Foundations, and the chairman for the Foundation to Promote Open Society.

Foundation to Promote Open Society was a funder for the Carnegie Endowment for International Peace (think tank), and the Brookings Institution (think tank).

Jessica Tuchman Mathews is the president of the Carnegie Endowment for International Peace (think tank), a director at the American Friends of Bilderberg (think tank), was an honorary trustee at the Brookings Institution (think tank), and a 2008 Bilderberg conference participant (think tank).

Ed Griffin’s interview with Norman Dodd in 1982

(The investigation into the Carnegie Endowment for International Peace uncovered the plans for population control by involving the United States in war)

http://www.illuminati-news.com/110106a.htm

James F. Collins is a senior associate at the Carnegie Endowment for International Peace (think tank), and was a senior advisor at Akin, Gump, Strauss, Hauer & Feld, LLP.

Victor H. Fazio Jr. is a senior adviser at Akin, Gump, Strauss, Hauer & Feld, LLP, and a lobbyist for the Pacific Investment Management Company (Pimco).

Akin, Gump, Strauss, Hauer & Feld, LLP was the lobby firm for the Pacific Investment Management Company (Pimco).

James W. Cicconi was a partner at Akin, Gump, Strauss, Hauer & Feld, LLP, and is an honorary trustee at the Brookings Institution (think tank).

Vernon E. Jordan Jr. is a senior counsel for Akin, Gump, Strauss, Hauer & Feld, LLP, an honorary trustee at the Brookings Institution (think tank), Valerie B. Jarrett’s great uncle, a director at the American Friends of Bilderberg (think tank), and a 2008 Bilderberg conference participant (think tank).

Valerie B. Jarrett is Vernon E. Jordan Jr’s great niece, the senior adviser for the Barack Obama administration, and a member of the Commercial Club of Chicago.

Commercial Club of Chicago, Members Directory A-Z (Past Research)

Tuesday, December 17, 2013

http://thesteadydrip.blogspot.com/2013/12/commercial-club-of-chicago-members.html

Cyrus F. Freidheim Jr. is a member of the Commercial Club of Chicago, and an honorary trustee at the Brookings Institution (think tank).

Allianz Global Investors AG is the owner of the Pacific Investment Management Company (Pimco).

Diana L. Taylor was a director at the Allianz Global Investors AG, and is Michael R. Bloomberg’s companion.

Michael R. Bloomberg is companion is Diana L. Taylor, the New York (NY) mayor, was a general partner at Salomon Brothers, a benefactor for the Harlem Children's Zone, and a donor for the Robin Hood Foundation.

William S. Thompson Jr. was the chairman, Salomon Brothers Asia Ltd. for Salomon Brothers, the CEO for the Pacific Investment Management Company (Pimco), and a director at the Allianz Global Investors AG.

Allianz Global Investors AG is the owner of the Pacific Investment Management Company (Pimco).

Mohamed A. El-Erian is the CEO for the Pacific Investment Management Company (Pimco), and a trustee at the Carnegie Endowment for International Peace (think tank).

Foundation to Promote Open Society was a funder for the Carnegie Endowment for International Peace (think tank), the Harlem Children's Zone, and the Robin Hood Foundation.

George Soros is the chairman for the Foundation to Promote Open Society, and was a benefactor for the Harlem Children's Zone.