The roaring market will run out of steam "with a whimper, not a bang," Gross predicted. Central Bank stimulus isn't having the same effect anymore, and anemic global growth and weak corporate earnings will put a lid on asset price appreciation.
"A rational investor must indeed have a sense of an ending, not another Lehman crash, but a crush of perpetual bull market enthusiasm," he wrote.
Gross had been a proponent of the "new normal" idea that economic growth and market gains both would be muted in the years ahead.
"Active asset managers as well, conveniently forget that their (my) industry has failed to reduce fees as a percentage of assets which have multiplied by at least a factor of 20 since 1981," Gross added in the letter. "They believe therefore, that they and their industry deserve to be 20 times richer because of their skill or better yet, their introduction of confusing and sometimes destructive quantitative technologies and derivatives that led to Lehman and the Great Recession."
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