Bill Gross Says Consider Selling - Mike Swanson (12/08/2014)

This is from a weekly letter by Bill Gross for Janus Capital:

“Can a debt crisis be cured with more debt?” it is difficult to envision a return to normalcy within my lifetime (shorter than it is for most of you). I suspect future generations will be asking current policymakers the same thing that many of us now ask about public smoking, or discrimination against gays, or any other wrong turn in the process of being righted.

How could they? How could policymakers have allowed so much debt to be created in the first place, and then failed to regulate their own system accordingly? How could they have thought that money printing and debt creation could create wealth instead of just more and more debt? How could fiscal authorities have stood by and attempted to balance
budgets as opposed to borrowing cheaply and investing the proceeds in infrastructure
and innovation? It has been a nursery rhyme experience for sure, but more than likely without a fairytale ending.

Markets are reaching the point of low return and diminishing liquidity. Investors may want to begin to take some chips off the table: raise asset quality, reduce duration, and preparefor at least a halt of asset appreciation engineered upon a false central bank premise of artificial yields, QE and the trickling down of faux wealth to the working class. If the nursery rhyme theme is apropos to the future, as well as the past, investors should remember that while “Jack and Jill went up the hill,” that “Jack fell down, broke his crown, and Jill came tumbling after.”

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Bill Gross asks of the Fed and other Wall Street leaders - "how could they?"

One can wonder though "how could they not?"

If the Fed did not create this bubble the masses would have turned on them.

We have an equity culture driven by a bailout culture that cares only for the present and nothing for the future.

In the mind of the stock market bubble bull if the grandchildren are ruined they do not care, because all they care about are higher stock prices and do not care about what cost they may bring to the country.

When you hear someone say that valuations do not matter you are essentially talking to someone who believes that they exist outside of history and that the rules of economics and investing do not apply to them.

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