Allianz’s El-Erian Says to Scale Back Risk

Can President-elect Trump deliver on fiscal stimulus and job growth after taking office next month in the face of a fractious American Congress? The question, posed in last week’s Bloomberg, is addressed by Mohammed El-Erian, Bloomberg columnist and chief economic advisor at Allianz SE, who says reducing risk by increasing cash holdings might be a good idea. Trump’s promises for tax cuts and spending increases are bolstering growth forecasts, but El-Erian believes that the currently robust market has “priced in no policy mistakes. We’ve priced in no market accidents, and we’ve ignored all sorts of political issues.” Mark Kiesel, chief […]

Allianz’s El-Erian Discusses Brexit

According to Mohamed El-Erian, chief economic adviser at Allianz, there is a common thread running through Brexit, claims of inconsistency in the Fed’s actions, the rise of negative interest rates and ‘strange politics”. Investment News reports that, in a recent media briefing, he described the commonality as “advanced economies’ inability to grow in an inclusive manner.” El-Erian explains that when a small segment of the population reaps the benefits of a sluggish economy, “strange things start to happen. And we ain’t seen anything yet.” He refutes the notion that low growth is a cyclical issue. Instead, El-Erian blames an overreliance […]

Investors face a “New Operating Regime,” El-Erian Says

Mohamed El-Erian, chief economic advisor of Allianz SE and chairman of President Obama’s Global Development Council, says “[f]inancial markets are now transitioning . . . to a new operating regime.” He contends that this means “volatility bouts will be more frequent and, in some cases, more violent than in the last few years.” Further, he suggests that that “challenge will be in monitoring carefully the tipping points for various market segments, along with related price overshoots and undue asset-class contagion.” El-Erian points to nine aspects of the change: “Bouts of volatility are to be expected;” They will be “amplified by […]

El-Erian: Expect Major Volatility – and Big Opportunities

Mohamed El-Erian, says to expect major volatility in the coming months — volatility that will create some great opportunities. “We have a bumpy road ahead of us, but I keep on stressing, it will create a lot of attractive opportunities,” he told CNBC. El-Erian said the global market may experiencing a shift to a “higher volatility regime,” meaning that asset allocations will become aggressive and price multiples will begin “looking high.” That’s when markets overshoot and act with too much correlation, creating the opportunity is, he says. He also says that opportunities may well be occurring in emerging markets and […]