Each month Bill Gross, the co-chief investment officer along with Mohamed El-Erian of the investment mangagement firm PIMCO (which has the world's largest mutual fund under management, with a value of some $250 billion), offers his musings on the state of the economy in his "Investment Outlook." This month Gross is not so sanguine on the economy. This is perhaps not surprising, nor is his diagnosis that all the efforts of late to rectify the structural imbalances in the economy have focused on the capital side of the equation to the detriment of labor, which will in the end come back to bite the capital side. Many others have said the same thing (Robert Reich, Brad DeLong, among others). What was surprising was Gross's conclusion, where he brings in Marx. After citing Marx's call for the "'Laborers of the world, unite,'" Gross adds: "He [Marx] might also have added, 'Investors/policymakers of the world wake up - you're killing the proletariat goose that lays your golden eggs.'" A sign of the times, perhaps, or of more to come?
On a related matter, there's been a lot of buzz this past week about Lakshman Achuthan's ECRI index report which signals that we are entering another recession, and likely a severe one at that. This index has been incredibly accurate at predicting recessions, although it does have its detractors.
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