Will Green Shoots Flourish in U.S. and Latin America?

A new Secular Outlook Series Q&A with Josh Thimons and Lupin Rahman is available on pimco.com.

Will Green Shoots Flourish in U.S. and Latin America?

· The U.S. economy is much further along the road to repair relative to its developed market peers, but it is still dealing with an unsustainable fiscal situation.

· Latin America is closely coupled to the rest of the world. What happens in the U.S., China and Europe over the secular horizon is especially critical.

· Our secular investment outlook calls for a more defensive posture toward risk. In U.S. fixed income, this suggests positioning for alpha rather than capital appreciation. And given increasing differentiation across Latin America, investors should stay consistently aware of credit risks.

PIMCO : "As Energy Demand Outpaces Supply, Asia Looks Overseas to Refuel" - Asia Credit Perspectives by Raja Mukherji and Taosha Wang

A new Asia Credit Perspectives by Raja Mukherji and Taosha Wang is available on pimco.com.

As Energy Demand Outpaces Supply, Asia Looks Overseas to Refuel

· We expect more Asian oil and gas companies to tap the bond market going forward, often to finance acquisitions outside the region.

· Many Asian countries are encountering growing energy shortages due to declining indigenous resources and domestic consumption growth.

· Oil companies in Asia frequently engage in overseas acquisitions. In many cases, these transactions help enlarge reserve base, access technological know-hows and enhance corporate profitability.

· Strong sovereign support is a key investment thesis in the Asian oil and gas sector. Through our bottom-up analysis, we are finding numerous investment opportunities.

Don’t Pay Too Much for That Bordeaux - Or That Bond

VIEWPOINTS
April 2013
Don’t Pay Too Much for That Bordeaux - Or That Bond
Jeff Helsing

• ​The financial market’s reliance on ratings agencies and benchmarks, along with regulations, can cause distortions in the value of some securities.

• These price distortions can create potential opportunities for some investors.

• Investors should consider aligning capital allocation with outcome-oriented objectives that aren’t influenced by credit ratings or benchmarks.

http://www.pimco.com/EN/Insights/Pages/Dont-Pay-Too-Much-for-That-Bordeaux-Or-That-Bond.aspx

Pimco's Bill Gross Looks at the Man in the Mirror

Pimco's Bill Gross Looks at the Man in the Mirror

Published: Wednesday, 3 Apr 2013 | 10:08 AM ET
By: John Carney
Senior Editor, CNBC.com

When Bill Gross looks in the mirror, what does he see?

In his latest monthly "Investment Outlook" commentary, the Pimco chief waxes philosophical. He questions whether he and other legendary investors are really all they're cracked up to be. Maybe guys like Warren Buffett, George Soros, and Ray Dalio were just lucky guys in the right place at the right time.

http://www.cnbc.com/id/100612898

Shale Oil: A Deep Dive Into Implications for the Global Economy and Commodity Investors

Viewpoints
March 2013

Shale Oil: A Deep Dive Into Implications for the Global Economy and Commodity Investors
Greg E. Sharenow, Mihir P. Worah

• The shale oil revolution in the U.S. is a classic example of high prices and improving technology spurring methods of commodity production that may have been historically unimaginable.

• Although growth in U.S. shale production has not yet been sufficient to meaningfully weaken oil prices, it has had a notable impact on long-term price expectations, on both the upside and downside.

• After acting as a significant brake on economic activity during the run-up in prices during the last decade, greater energy availability will at the very least be a positive for global growth.

http://www.pimco.com/EN/Insights/Pages/Shale-Oil-A-Deep-Dive-Into-Implications-for-the-Global-Economy-and-Commodity-Investors.aspx

Uncovering ‘Diamonds in the Rough’ in Today’s Credit Markets

Uncovering ‘Diamonds in the Rough’ in Today’s Credit Markets

Key Points:

· There are still good opportunities for yield and total return in the credit markets, but there has been a shift in where and how investors can find them.

· The credit markets have had a strong run since the market bottomed in 2009. Many investors searching for income have moved into riskier assets.

· A "diamond in the rough" is a credit that is under-covered, or not actively followed or researched by many investors. At PIMCO, we identify these opportunities through our top-down and bottom-up investment process.

· We’ve identified a number of sectors that appear poised for above-average growth. Housing is at the top of the list, and one of the few bright spots in the U.S. economy. Energy is another industry in which we’re seeing opportunity, and we are also bullish on select credits in emerging economies.

http://www.pimco.com/EN/Insights/Pages/Uncovering-Diamonds-in-the-Rough-in-Todays-Credit-Markets.aspx

Pension Liabilities – Time to Get Real

Pension Liabilities – Time to Get Real

· Creeping pension liabilities are an increasing concern for credit investors.

· Companies should provide more granular information on both sides of their pension balance sheets, as well as use more realistic assumptions.

· A few companies have improved their disclosures in recent years, but in general the information available to investors is still far from what we need.

Tail Risk Hedging: It Pays to Be Countercyclical

Tail Risk Hedging: It Pays to Be Countercyclical

Vineer Bhansali

· The cost of hedging in absolute terms is back to pre-crisis lows.

· Quiet markets, low volatility and a lack of visible risks on the horizon can lead to complacence and increasingly dangerous, leveraged positions.

· Many credit markets have been direct beneficiaries of the belief in seemingly lower tail risks in equity markets, and could also end up suffering if there is a re-emergence of widespread fear of, and upward repricing of, these tails.

· Investors should consider taking this opportunity to reload their hedges as soon as they can.

Searching for ‘Safe Spread’ with PIMCO’s Diversified Income Strategy

Searching for ‘Safe Spread’ with PIMCO’s Diversified Income Strategy

· Diversified Income can add yield potential to global credit portfolios while managing risk in different market environments.

· Many investors are reluctant to invest in more volatile asset classes after the financial crisis.

· The search is on for “safe spread” – sectors that we believe are most likely to provide attractive yields while withstanding the fluctuations of a wide range of possible economic scenarios.

· PIMCO’s Diversified Income Strategy, a diversified blend of corporate and emerging market securities, seeks to offer higher yields without taking on excessive additional risk.

PIMCO Cyclical Outlook for the U.S.: Will Washington’s Choices Foster or Frustrate Growth?

PIMCO Cyclical Outlook for the U.S.: Will Washington’s Choices Foster or Frustrate Growth?

· We expect U.S. growth in the range of 1.25% to 1.75% over the cyclical horizon, and housing will be an important component.

PIMCO’s Cyclical Outlook for Asia: Awaiting the Policy Breakthrough

A new Economic Outlook Q&A with Tomoya Masanao, Robert Mead and Ramin Toloui is now available on pimco.com.

PIMCO’s Cyclical Outlook for Asia: Awaiting the Policy Breakthrough

· The cyclical economic outlook for 2013 is unusually dependent upon whether we see a structural policy breakthrough somewhere in the world.

PIMCO Cyclical Outlook: At Policy Crossroads

PIMCO Cyclical Outlook: At Policy Crossroads

Key Points:

· The global economy is in the midst of a cyclical slowdown driven by both economics and politics.

· The maturation of the global cyclical growth phase suggests we look to a handoff to more secular drivers of growth. But strong secular drivers remain elusive due to the continuation of New Normal headwinds.

· Policies are at important crossroads in every major economy. Developed countries are struggling to find the right fiscal and monetary policy mix between cyclical stimulus and secular normality, while developing economies’ export-led models face a multitude of pressures.

· 2013 will be the year of policy change, with policymakers in major economies challenged to enact structural changes that spur private sector growth before government-balance-sheet-led growth is exhausted.

Fiscal Cliff Takeaways From the Sunday News Shows

Mohamed A. El-Erian.CEO and co-CIO, PIMCO

Fiscal Cliff Takeaways From the Sunday News Shows
Posted: 12/02/2012 2:56 pm

Television networks devoted much of their Sunday news shows to the fiscal cliff -- and rightly so -- reflecting the urgency and importance of the topic.

Fortune: Bill Gross says it's time for investors to plan a "Great Escape"

FORTUNE

Bill Gross says it's time for investors to plan a "Great Escape"
By Stephen Gandel, senior editor March 28, 2012: 5:00 AM ET

Bond king Bill Gross says it's time to get your portfolio ready for a long-period of lower market returns.

FORTUNE -- Apparently, Bill Gross picks movies as well as investments.

Bond investor Gross, who runs the world's largest mutual fund Pimco Total Return (PTTRX), is known for his quirky letters to investors. In the past he has dispensed love advice (specifically for Europe) and written about why he hates automatic flush toilets. His letter this month, which came out on Tuesday, instead offers movie advice. Gross' big screen pick is The Great Escape.

Family Feud (Bill Gross, PIMCO)

Family Feud
Bill Gross, PIMCO
2012.12.02

- Investors should recognize that Euroland’s problems are global and secular in nature; it will be years before Euroland and developed nations in total can constructively escape from their straitjacket of debt.

- Global growth will likely remain stunted, interest rates artificially low and investors continually disenchanted with returns that fail to match expectations.

- Investors should consider risk assets in emerging economies, such as Brazil and Asia, and bonds in the strongest developed economies, where the steep yield curve may offer opportunities for capital gains and potentially higher total returns.

Bloomberg: Pimco’s El-Erian Says U.S. Economic Setting ‘Terrifying’

From http://www.bloomberg.com/

---

Pimco’s El-Erian Says U.S. Economic Setting ‘Terrifying’
By Cordell Eddings and Betty Liu - 2011.11.22 07:20 PM

Pacific Investment Management Co.’s Chief Executive Officer Mohamed A. El-Erian said U.S. economic conditions are “terrifying” as the nation struggles to recover from recession.

Bloomberg: Bill Gross Rebounds From Bottom Ranking as Riskier Assets Surge

Bill Gross Rebounds From Bottom Ranking as Riskier Assets Surge
By Sree Vidya Bhaktavatsalam - 2011.11.03 09:01 PM

Bill Gross’s Pimco Total Return Bond Fund, which is having its worst run this year since at least 1995, regained its spot among top bond funds last month as investors returned to riskier assets.

CNNMoney: Pimco's Bill Gross is betting with the Fed

Pimco's Bill Gross is betting with the Fed
By Hibah Yousuf October 15, 2011: 10:08 AM ET

NEW YORK (CNNMoney) -- Pimco's Bill Gross has already admitted that his bearish call on U.S. Treasuries earlier this year was a bad bet. Now it seems that the bond guru is taking his lead from the Federal Reserve.

Bloomberg: Pimco’s Gross Tells Clients 2011 a ‘Stinker’

Pimco’s Gross Tells Clients 2011 a ‘Stinker’
By Sree Vidya Bhaktavatsalam - 2011.10.15 05:01 AM

Bill Gross, manager of the world’s biggest mutual fund, sought to reassure clients that he hasn’t lost his touch after he misjudged the extent of the economic slowdown, causing his Pimco Total Return Fund to trail rivals this year.

PIMCO: Six Pac(k)in’

Six Pac(k)in’

- Long-term profits cannot ultimately grow unless they are partnered with near equal benefits for labor.
- There is only a New Normal economy at best and a global recession at worst to look forward to in future years.
- If global policymakers could focus on structural as opposed to cyclical financial solutions, New Normal growth as opposed to recession might be possible.