FYI: ( I will link repeat program, early tomorrow morning, when it becomes available for free.)
Regards,
Ted
Dear WEALTHTRACK Subscriber,
With stocks and bonds more expensive than they have been in 90% of market history even institutional investors are feeling conflicted about where to invest. According to a recent survey of global Chief Investment Officers, they are reluctantly increasing their allocation to stocks in order to get higher returns, even though they are worried about a major market correction. This week, with the permission of State Street Global Advisors, the sponsor of the survey we are sharing the “Walking The Tightrope” survey report with you. It will be available on our website, over the weekend.
It is the beginning of a fund raising season on public television, so this week we are revisiting an interview with Paul McCulley, a Financial Thought Leader, noted
Fed watcher, economist and former short term bond trader.
The reason we chose to highlight McCulley’s interview again is because he makes a strong case for one side of a very important economic debate, the outcome of which will have a huge impact on the markets. McCulley is a proponent of the “secular stagnation” theory being argued by former Treasury Secretary Lawrence Summers. If they are right, that we are in a period of prolonged economic stagnation, then interest rates should remain near historic lows for several more years and both the stock and bond markets should benefit as a result. If they are wrong, both markets are grossly overvalued and due for a severe correction.
You might recall that for years McCulley was a Senior Partner at bond giant PIMCO. He was a founding member of its Investment Policy Committee, along with firm founder Bill Gross, and author of the influential monthly “Global Central Bank Focus”. During his time at PIMCO, he managed their huge short term trading desk, overseeing an estimated $400 billion dollars in assets.
McCulley retired from PIMCO in 2010 to write, think, speak and otherwise lead a more balanced life, which he did until last year when he was asked to return to his old firm, by his former boss and close friend, Bill Gross. Gross then unexpectedly left the firm a few months later, an experience McCulley will talk about in our exclusive EXTRA feature on our website.
McCulley is known for his understanding of economics, the capital markets and Fed policy. Long before the 2008/2009 financial crisis he identified the powerful and destructive rise of what he called the “Shadow Banking System”, the unregulated institutions fueling the housing and credit bubble. He also coined the phrase “Minsky Moment”, after economist Hyman Minsky’s theory that financial stability, as this country had during the Alan Greenspan era, ultimately leads to financial instability, as people and institutions take on more and more risk.
That is exactly what happened.
In this interview he makes some other startling predictions about Fed policy under Janet Yellen, Mario Draghi’s intentions and the global level of interest rates.
If WEALTHTRACK isn’t showing on your local station due to pledge, you can always watch it on our website, WealthTrack.com over the weekend. As I mentioned you will also find our exclusive online EXTRA interview McCulley about his decision to retire – twice – and how he’s achieved a work/life balance.
Have a great weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo
Comments
Wish it were available in transcript form - as I find transcripts faster & easier to digest. Also - near the end of the month we run low on the 4G data plan we rely on for connectivity. Videos chew-up a lot of data.
I used to not have unlimited (you wouldn't be charged by Tmo if you went over the limit, they would just slow your speed down significantly), now I'm spoiled no way I could go back.