Is Another Dr. Doom Lurking at Pimco? Frightening Forecast Follows Losses and Outflows
Is Saumil Parikh, a portfolio manager at Pimco, making another grim prediction just to redirect blame for the bond behemoth’s bad bets? Is it another case of Bernanke bashing?
If accurate, Parikh’s forecast for a greater than 60% chance of global recession within three to five years could earn him a spot in the shadow of Nouriel Roubini.
Parikh cited cyclical statistics and high debt levels in his gloomy outlook. He offered a mixed bag with a less bleak future for the U.S. "I think Europe will remain mired in a recession while the U.S. will chug along at a low rate of growth, while emerging markets move ahead especially those in Asia," he wrote.
Perhaps Parikh is just carrying on Pimco’s recent spate of dark predictions and backing the big boss, company founder Bill Gross who earlier this month blasted the Federal Reserve and its Chairman Ben Bernanke, claiming “it's your policies that may be now part of the problem rather than the solution.”
Could the mega money manager be overcompensating for recent losses?
The prized Pimco Total Return ETF which trades as BOND posted its first-ever monthly outflows in May and then shed $119 million in the first five days of June. May was also cruel to Pimco's $292 billion Total Return Fund (PTTAX). Investors have been fleeing the flagship mutual fund, with outflows overtaking inflows for the first time since 2011.
Or maybe he’s right, and it’s the pending doom that’s to blame for the slides.
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