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Bill Gross: The boost from negative interest rate yields may have reached an end
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Loading...Bill Gross warns that lower rates won't boost stock markets further
His argument that 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 with additional 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 institutions such as banks, insurance companies and pension funds of their ability to earn historically "guaranteed" carry that equate assets with 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.
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