Pimco’s El-Erian explains the capital risk in artificially high asset prices

“In terms of equity markets, El-Erian says investors are split into two camps. One camp believes that everything will go higher and central banks will succeed in their efforts. The other camp believes asset prices are going to come down to meet the fundamentals.

El-Erian puts himself in the second camp.

“We think that prices are artificially high, that maintaining them here is going to be hard as central banks become less effective, and that it’s time to book some profits and to wait for some better entry points,” he explains.”

Here is a direct link.

(I do wish that new host Lauren didn’t talk like such a dingbat in these clips, but if you can get past that, El-Erian’s comments here are worthwhile.)

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2 Responses to Pimco’s El-Erian explains the capital risk in artificially high asset prices

  1. Jon Evan says:

    Unfortunately he mentions no evidence to support the first camp. Recent USA merger and acquisition moves point to the fact there are healthy companies awash with cash. Some are beginning to aggressively deploy. From the Heinz play to the airline merger to Microsoft purchase of Dell as well as others these new corporate moves should they continue into 2013 may signal a continuation of a new cyclical bull market. What do you think of these new M&A’s and is this the beginning of more companies deploying their cash reserves?

  2. Roberta says:

    Larry Edelson says after a soon-to-c0me pullback stock prices will soar:

    http://www.moneyandmarkets.com/only-savvy-investors-will-truly-profit-from-this-51448

    If most goobermints are going bankrupt, he could be right.

    I thought Lauren did a good job. I doubt she had to use a teleprompter like our illegal immigrant president.

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