Biggest highlights from Barron’s Roundtable

Here are the comments I found the most interesting from the first part of this year’s Barron’s Investing Roundtable interview which was published today

News Links: The ugly side of ultra-cheap money

News links for 21 December 2011 including notes on technology, the sovereign debt crisis, elections, and Europe

Bond vigilantes and the currency relief valve

The last post by Randall Wray below is an interesting one because it points out how the world has changed since the end of the gold standard and why the sovereign debt crisis is centered in the euro zone.

While I have an Austrian bias overall, for me, MMT is the best way to think about nonconvertible floating exchange rate systems as distinct from fixed exchange rate, currency board, pegged and convertible systems. The difference is policy space and what I would call the bond vigilante relief valve

Bill Gross and Larry Fink on the economy

Bloomberg Television has another great set of interviews to see, this time with Larry Fink of BlackRock and Bill Gross of PIMCO. The two sat down with Bloomberg Television’s Erik Schatzker for an exclusive conversation at an alumni event hosted by UCLA Anderson School of Management (I guess both are UCLA alums; I almost went there myself).

They covered a huge range of topics in the interview from the US supercommittee to Occupy Wall Street to the European Sovereign Debt Crisis and on down the line. Very good stuff

Videos below

Gross, El-Erian on Europe, Strategy, Treasuries

PIMCO’s Mohamed El-Erian and Bill Gross spoke exclusively with Bloomberg Television’s Tom Keene today from the company’s headquarters in Newport Beach, CA about Europe’s crisis, PIMCO’s investment strategy and Treasury yields.

Video here

Chanos and Gross versus Paulson and Bloomberg

Here’s Jim Chanos on the demonstrations on Wall Street which express the anti-bailout sentiments expressed by both the Tea Party and #OccupyWallStreet. Bill Gross, Vikram Pandit, John Paulson and Michael Bloomberg all chimed in too

Should our government borrow more at negative real interest rates?

If real returns remain low, it will skew capital investment. When recession hits, debtors backing those losing investments will be caught out and forced to delever aggressively as resource misallocation becomes evident

US real 10 year yields at record 225bpt discount to JGBs

PIMCO, the world’ largest bond fund call this suppression of yields financial repression because it means savers and bond investors get negative real returns. However, John Hempton pointed out that in Japan, where this monetary policy is well-advanced, deflation has set in and real yields are positive despite the zero-rate interest policy (ZIRP)

Zulauf: “I expect the market to go below the latest lows in September”

As usual, I find Felix Zulauf’s commentary very perceptive. He has been right consistently for the whole of 2011 in predicting where things have gone. What he is saying is that the fundamentals in the west are weak and now that growth is ebbing, this will be manifest in stock prices. What will policy makers do

Bill Gross: It’s all about jobs and growth in the US

Bill Gross was on CNBC yesterday talking about the debt ceiling deal. His first thoughts were about jobs. “There are no jobs in terms of growth. There are no wages in terms of increase… This is a classic de-levering cycle.”

The debt ceiling ratings downgrade

If Cantor doesn’t fold his hand, it will be a political disaster for him and his party and economic disaster for the global economy

On why Bill Gross supports a job guarantee despite railing against the deficit

Politically, the whole thing looks a lot like Japan. To my mind, the right approach then is to de-emphasize “increasing… borrowing and lending” and re-emphasize increasing jobs and employment. Whether we see work sharing as we see in the Netherlands and Germany or a job guarantee, this could deal with the deficit and structural issues that conservatives care about and the demand issues that liberals care about