but there are equity funds under pimco, right? you have pimco equity funds. i would like to know how does that affect your strategy plan? >> well, you know, i'm not always equity pessimistic. in my personal portfolio, i own more stocks than bonds. yes, we have a thriving equity business at pimco. we have three or four new funds and all doing, you know, very well. i did point out and i think it's fair to suggest that the outlook for bonds, you know, going forward for the next ten years or so was low, as well. it was probably 1.5% to 2% relative to an outlook for stocks at 4%. so i'm not dissing stocks. i'm suggesting that the double digit returns of investors grew used to over 20 or 30 years is a thing of the past and boomers used to letting money doing the hard working instead of like donna summer implied working hard for the money. we grew used to buying apple stock instead of inventing things like the apple ipod. we have the consequences of lower returns. >> i can't match your donna summer reference so i'll move on from that although i like it. is the s&p 5

i'm join now by mohamed el-erian, see you of pimco. so, mohamed, did the fed do the right thing today. >> the fed surprised everyone because it had every reason to do something. the domestic economy is vogue. -- slowing. the global economy is slowing. inflation is fragile. but they didn't. we would suggest three reasons that went into that decision not to act. first, there was concern about the effectiveness of what they can do. if you like, the benefits of coming down and the costs of going up. second, i think that they wanted to keep the powder truck dry. they're worried about the fiscal cliff and they're worried about europe. and third, they don't want to take pressure off congress, so they didn't act today, but we would agree that most likely they will act in september and you'll probably get a signal in august during the jackson hole speech of chairman bernanke. >> susie: as you know, i mean, so many people think that even if the fed does act, it's going to have a minor effect on the economy. but then you wonder, is it going to be

i'm join now by mohamed el-erian, see you of pimco. so, mohamed, did the fed do the right thing today. >> the fed surprised everyone because it had every reason to do something. the domestic economy is vogue. -- slowing. the global economy is slowing. inflation is fragile. but they didn't. we would suggest three reasons that went into that decision not to act. first, there was concern about the effectiveness of what they can do. if you like, the benefi of comi down and the csts of going up. second, i think that they wanted to keep the powder truck dry. they're worried about the fiscal cliff and they're worried about europe. and third, they don't want to take pressure off congress, so they didn't act today, but we would agree that most likely they will act in september and you'll probably get a signal in august during the jackson hole speech of chairman bernanke. >> susie: as you know, i mean, so many people think that even if the fed does act, it's going to have a minor effect on the economy. buthen ou wond, is it going to be worse if

according to pimco's cofounder, bill gross. >>> what is behind the bond king's fall? he joins us now. >> welcome back, bill. >> hi maria, hi bill. >>> your call is witnessing the death of equities, why death? >> not death of equities, but the death of the quality of equities and the quality of bonds basically over the past 10 to 20 years that suggested that double digit return social security what we were due. all i'm suggesting going forward is that the consult, which was a boomer type of consult, a 20, 30, 40, 50-year-old consult, in terms of generational boom, that that should be more realistic, they should expect less than 10%. they should know that corporate profits as a percentage of gdp, and corporate taxes are at record lows, and therefore going forward double digits is probably not what they're going to receive. so just lower your expectations. equities are still alive, but the skult of equities in terms of double digit return social security dieing. >> i want to ask you what in a means and how somebody should invest. you wrote this back in late july, and peo

we have pimco's neil cashcarry to tell us what he thinks. is joe biden getting the boot from obama? ed klein, best selling author of "the amateur" is hearing whispers from inside the white house. don't forget, folks, free market capitalism is the best path to prosperity. i'd like to see some reagan-kemp growth rhetoric. we'll be right back. ♪ ♪ [ male announcer ] its lightweight construction makes it nimble... ♪ its road gripping performance makes it a cadillac. introducing the all-new cadillac xts. available with advanced haldex all-wheel drive. [ engine revving ] it's bringing the future forward. >>> all right. stocks had their best rally in over two weeks today. the real story is the big rise in ten-year treasury bond rate. stay with me on this. let me try to explain why. first of all, let's have a picture of this thing. from about 1.35% it's risen all the way up to 1.85%. these are historically low rates, but it is a big 50 basis point move. in this game with ultra low rates, that's huge. i want to raise this point with you. number one, the reason the long-term rate is ris

we don't think so at pimco but ben bernanke and the fed probably think so. i mean, ever since 2003 and the helicopter speech, he's basically laid out the plan in terms of the potential policy actions, you know, that are required and, yes, he believe that is additional quantitative easing lead to higher asset prices and trickle down in terms of stronger economic growth. >> is it possible to quantify, for example, how many jobs created by the previous qes? >> no. he spoke to that in the speech and spoke, as well, to the fact that in their estimate perhaps the 10-year treasury lowered by 100 basis points with tempts and therefore economic growth and mortgage creation has been stimulated but it's very hard to know that. but, you know, there's no doubt that the fed and other central banks believe that quantitative easing will assist economic growth and so our mantra is don't fight the fred but the consequences or lack of consequences going forward. >> bill, can the fed move the unemployment rate down? >> well, i think they have and they probably can, you know, an

. >> all righty, mohamed el erian from pimco joins us for a first on cnbc. good to see you. >> thank you, michelle. >> do you agree with the market assessment that qe-3 looks pretty much baked in? >> yeah, i do. i would put it higher than steve's two-third. why? bernanke has a robust defense, and he told us the problems were cyclical and not structural and finally he told us the costs are containable, they're manageable. so, in my opinion he is laying the ground for more activism from the fed. >> do you believe that the fed helped create 2 million jobs? >> i have some problems with the number. what i do believe is the fed is repressing interest rates, keeping them artificially low, and that is having a mainly financial market impact differentiated, much more differentiated than what the reaction is so far today. but it is having a financial market impact, transitioning to the real economy is more problematic. >> based on what he said today, what is pimco's view what to do today on the treasury curve? >> we would say be very careful between his willingness an

of the collateral damage and brace yourself because this brings us to bill gross's latest note the pimco bond titan says the call of equity may be dying but the cult of inflation may have only just begun we'll talk to mike maloney founder of gold silver dot com about the cold and us home prices rose and made for the fourth month in a row according to the s. and p. case schiller data out today look at where this bit of monks this swath of other data pointing to the u.s. economy losing steam let's get to the days capital account. we have a central bank extravaganza of meetings and front page anticipation of action this week the z.b. meets after mario draw got markets really excited saying this last thursday. these c b is ready to do what ever it takes to preserve the euro and believe me it will be enough. now this got speculation swirling about whether the e.c.b. may resume its bond buying program now of course the boom does they poured water on this idea that very next day but according to reports people are expecting or bracing perhaps for some action and on this side of the atlantic the

pimco's mohamed el-erian and tom friedman. you don't want to miss a minute of "squawk" this morning. ♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. [ yawning sound ] in communities across the country. whether it's supporting a delaware nonprofit that's providing training and employment opportunities, investing in the revitalization of a neighborhood in the bronx, or providing the financing to help a beloved san diego bakery expand, what's important to communities across the country is important to us. and we're proud to work with all of those who are creating a stronger future for everyone. . >>> welcome back, everybody. u.s. equity futures are slightly higher. dow futures up about ten points, s&p up. the roads and skies will be more crowded during the upcoming labor day. 33 million americans will be driving or flying over this holiday. that's up 2.9% from last year and largest number since 2008. aaa say it's encouraging. that brings us to our national forecast. from the

of the collateral damage and brace yourself because this brings us to bill gross's latest note the pimco bond titan says the cult of activity may be dying but the cult of inflation may have only just begun we'll talk to mike maloney founder of gold silver dot com about the cold and us home prices rose in may for the fourth month in a row according to the s. and p. case schiller data out today look at where this bit of monks this swath of other data pointing to the u.s. economy losing steam let's get to the day's capital account. we have a central bank extravaganza of meetings and front page anticipation of action this week the z.b. meets after mario druggy got markets really excited saying this last thursday these c b is ready to do what ever. to preserve the euro and believe me it will be you know. now this got speculation swirling about whether the e.c.b. may resume its bond buying program now of course the boom does they poured water on this idea that very next day but according to reports people are expecting or bracing perhaps for some action and on this side of the atlantic the fed

he oversees $6 billion as head of global equities at pimco. neel, it was the first time i was sort of holding your feet to the fire initially because you said it's a very cautious time with a lot of potential pitfalls on the horizon so we want to look globally for situations that appeal to us but not just sort of go in head long. i gave you a hard time about that that day. then we had that big break in the spring. you remember you came back in and i said you were really right to be cautious and i gave you kudos for that. now i'm back to saying 1,400 s&p, neel. if you thought a lot of this was baked into the market you would have been a lot more long than you were. see how that works? whatever happened in the last three months i'm going to throw at you. do you wish you'd been more bullish three months ago? >> first of all, joe, great to see you. you've got a great memory. risk is switching, right? it swings risk on, risk off, risk on. we're investing in equities for the long term. we want to deliver returns over three to five years. we're not c

pimco co-founder says u.s. gdp isn't strong enough to dissuade the fed from jumping back in with purchases of bond and mortgage securities. >> what they basically said is that this will be a relatively open ended program in terms of size, in terms of time, in terms of what the asset class that they buy. so the fed has the flexibility even in the face of strengthening economy to the extent that that's happening to basically modify their posture going forward. i think it's almost a done deal. 80% doesn't say that but it's close. >> qe3 will be less effective than the previous rounds and if it happens investors should be buying what the fed buys. joining us today then for the last hour of the program, the form assistant secretary of commerce to u.s. president george h.w. bush. special assistant to president ronnie reagan. good morning. nice to see you again. >> good to see you. glad to be back. >> in the last 12 hours we've provided both wings of the discussions on whether the fed should act or not. >> you've brok

bill gross will talk about that from pimco in the next hour. and as paul ryan expects to take center stage in florida, former mississippi governor haley barbour will also join us. we'll also have the new york jets owner. it's a big hour. >> thank you. time for the global stocks to watch. joy global cutting its outlook citing slowing demand in china. a higher than expected first quarter profit after a surge in orders. and sealed air announcing its chief executive with retire in march. jerome pembare named his successor. two stocks where the ceo is leaving and popping. i keep thinking back to avon. another stock that popped when its female ceo is fired. it's a legitimate question. what about stocks that move to the upside when they let go of their female ceo? >> oftentimes you see stocks move up when a ceo has been released who hasn't performed well. shares rally, people start to write notes about a turnaround plan and it doesn't pan out. >> hello jcpenney. >> i wonder if this isn't a time to sell in and whether people ratchet back ideas. >> mike

started now and establishing that track record whether you're a smaller firm or a bigger firm like pimco is important. it will really drive an investor's decision. >>> thank you, coming up next, a new twist to the price is right, or the price is equal rights. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha! that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement i

, i want to start off with you, bill gross is a member of our economic strike team and a founder of pimco. i know you know him well. here's what he tweeted. he said, do bond markets take heart from the ryan selection? not me. he talks lower deficits but really believes in lower taxes. the exact opposite. stephen, bill gross has made billions in the bond market. tell me why he's wrong. >> well, look, i think a tax cut is exactly what's necessary right now to get this economy going. one of the big differences between the ryan budget and the ama budget, you cited a lot of numbers there, john. but one way of thinking about this is that under the obama budget, over the next ten years, we'll borrow $10 trillion more on top of the $16 trillion we have right now. under the ryan budget, that cuts that borrowing in half to $5 trillion. that's a big difference. this is going to be a really important grown-up discussion we're going to have. there's always this talk about not a dime's worth of difference between the two parties. this year, there's $5 trillion worth of difference. that's how big the di

coming up, pimco's bill gross said the cult of equity is dead. is he dead? we'll talk with him coming up. >>> paul ryan has big plans to reform the nation's massive entitlement programs but peters or or zag says it doesn't make sense. >>> fak shares falling to a new low after the expiration of the ipo lock-up. insiders can sell today. how low could the stock plunge? that and more when we see at the top of the hour from here at new york stock exchange. brian? >> bill, thank you very much. >>> herb back with an update on nu skin. >> reuters is correct. think eve sent a letter to nu skin to stop using a university researcher's name and given them until friday to stop using that name. this is a researchers who was associated with nu skin and did some work with them and collaborated on something and stopped the relationship in 2011. this is as you can see impacted the stock. >> do we know what nu skin will respond? >> we did know nu skin will have a press release and don't know what they'll say. >> got it. thank you. >>> with ikea, plans to open 100 hotels across

pimco executive vp tony cresinsi tells "outfront" that is double the references he has made in his lifetime. this is a guy who is a brainy professor. he likes to reference academic things. why is he so offensive? why does mitt romney for example think ben is dead wrong? here's the facts. in total, the two rounds of what is referred to as quantitative easing, ben bernanke's fed has injected $2.3 trillion into our economy. that's $2.3 trillion that did not exist before the fed created them. bernanke today said something pretty incredible. he was trying to prove why that $2.3 trillion has worked. he said this is why, it has created 2 million private sector jobs. those jobs created as a direct result of his easy money. well, that's pretty interesting. because that's an interesting link between jobs and how much he spent. because that is not a cheap cost per job. in fact, it is more than a cool million dollars per job. $1.2 million to be exact. so let's just repeat that because it did take a second to digest it. it's $1.2 million per job. for those who are keeping track, we are not counting the

, i want to start off with you, bill gross is a member of our economic strike team and a founder of pimco. i know you know him well. here's what he tweeted. he said, do bond markets take heart from the ryan selection? not me. he talks lower deficits but really believes in lower taxes. the exact opposite. stephen, bill gross has made billions in the bond market. tell me why he's wrong. >> well, look, i think a tax cut is exactly what's necessary right now to get this economy going. one of the big differences between the ryan budget and the obama budget, you cited a lot of numbers there, john. but one way of thinking about this is that under the obama budget, over the next ten years, we'll borrow $10 trillion more on top of the $16 trillion we have right now. under the ryan budget, that cuts that borrowing in half to $5 trillion. that's a big difference. this is going to be a really important grown-up discussion we're going to have. there's always this talk about not a dime's worth of difference between the two parties. this year, there's $5 trillion worth of difference. that's how big the

don't miss bill gross, the co-cio and founder of pimco. ant♪ [ breathes deeply ] ♪ this is where the dream begins ♪ ♪ i want to grow ♪ i want to try ♪ i can almost touch the sky [ male announcer ] even the planet has an olympic dream. dow is proud to support that dream by helping provide greener, more sustainable solutions from the olympic village to the stadium. solutionism. the new optimism.™ ♪ this dream and i'm here to tell homeowners that are 62 and older about a great way to live a better retirement. it's called a reverse mortgage. [ male announcer ] call right now to receive your free dvd and booklet with no obligation. it answers questions like how a reverse mortgage works, how much you qualify for, the ways to receive your money, and more. plus, when you call now, you'll get this magnifier with l.e.d. light absolutely free. when you call the experts at one reverse mortgage today, you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-fre

pimco's mohammed el-erian, joins us with what you need to know about today's fed meeting. >> susie: meanwhile, volatility rocks stocks after a technology issue at one big market maker leads to a bumpy open here at the big board. >> tom: that and more tonight on "n.b.r."! >> susie: no new action from the federal reserve today, but tom, policymakers gave strong hints that it is ready to take steps, if necessary, to boost the economy. >> tom: susie, the key words

pimco executive vp tony cresinsi tells "outfront" that is double the references he has made in his lifetime. this is a guy who is a brainy professor. he likes to reference academic things. why is he so offensive? why does mitt romney forxample think ben is dead wrong? here's the facts. in total, the two rounds of what is referred to as quantitative easing, ben bernanke's fed has injected $2.3 trillion into our economy. that's $2.3 trillion that did not exist before the fed created them. bernanke today said something pretty incredible. he was trying to prove why that $2.3 trillion has worked. he said this is why, it has created 2 million private sector jobs. those jobs created as a direct result of his easy money. well, that's pretty interesting. because that's a interesting link between jobs and how much he spent. because that is not a cheap cost per job. in fact, it is more than a cool million dollars per job. $1.2 million to be exact. so let's just repeat that because it did take a second to digest it. it's $1.2 million per job. for those who are keeping track, we are not counting the pre

, i want to start off with you, bill gross is a member of our economic strike team and a founder of pimco. here's what he tweeted. he said, do bond markets take heart from the ryan selection? not me. he talks lower deficits but really believes in lower taxes. the exact opposite. stephen, bill gross has made billions in the bond market. tell me why he's wrong. >> i think a tax cut is exactly what's necessary right now to get this economy going. one of the big differences between the ryan budget and the obama budget, you cited a lot of number there is, john. but one way of thinking about this is that under the obama budget, over the next ten years, we'll borrow $10 trillion more on top of the $16 trillion we have right now. under the ryan budget, that cuts that borrowing in half to $5 trillion. that's a big difference. this is going to be a really important groan-up discussion we're going to have. there's always this talk about not a dime's worth of difference between the two parties. this year, there's $5 trillion worth of difference. that's how big the difference is and how much the romne

, i want to start off with you, bill gross is a member of our economic strike team and a founder of pimco. here's what he tweeted. he said, do bond markets take heart from the ryan selection? not me. he talks lower deficits but really believes in lower taxes. the exact opposite. stephen, bill gross has made billions in the bond market. tell me why he's wrong. >> i think a tax cut is exactly what's necessary right now to get this economy going. one of the big differences between the ryan budget and the obama budget, you cited a lot of number there is, john. but one way of thinking about this is that under the obama budget, over the next ten years, we'll borrow $10 trillion more on top of the $16 trillion we have right now. under the ryan budget, that cuts that borrowing in half to $5 trillion. that's a big difference. this is going to be a really important groan-up discussion we're going to have. there's always this talk abo not a dime's worth of difference between the two parties. this year, there's $5 trillion worth of difference. that's how big the difference is and how much the romney/

pimco's mohammed el-erian, joins us with what you need to know about today's fed meeting. >> susie: meanwhile, volatility rocks stocks after a technology issue at one big market maker leads to a bumpy open here at the big board. >> tom: that and more tonight on "n.b.r."! >> susie: no new action from the federal reserve today, but tom, policymakers gave strong hints that it is ready to take steps, if necessary, to boost the economy. >> tom: susie, the key words

pimco's bill gross weighing in on the chairman's speech with the tweet. bernanke to go out with the guns blazing. qe3 is a near certainty. it will be open-ended but increasingly impotent. more from bill gross in the next hour of cnbc importantly. let's get a trader's reaction. kenny pulcari joins me. when's the street view? >> the market's kind of celebrating what they think once again is more rhetoric coming out of the fed and ben bernanke. dollar's under pressure and the equities higher. continuing to see that. we're not anywhere near the highs. right? right at 1425. we're still stuck between the range. >> but the rally is failed. failed just above 1400. very important. >> exactly right. i think what people -- notice yesterday we broke 1400. trading south of that for a little bit. and i think that's what we'll see moving in to september. a lot more caution. >> thank you very much. have a great weekend. let's link in to steve liesman in jackson hole hosting the coverage from bernanke and the other central bankers. steve, what did you think of what you ha

bill gross from pimco said we should short treasuries and gilts. he lost a lot of money. >> how far are we? for all the talk of austerity in this country, the truth is that actually borrowing is going up. there's not a lot of cutting and spending. >> it's absolutely true that the government hasn't cut current spending. all it's done cut mostly investment which as you say is completely the wrong thing to do. that illustrates my point. you had treasury ministers saying explicitly that if we didn't have this credible plan to get rid of the deficit in this parliament then the bond market vigilantes would punish us. the gilt market would blow up, we lose our aaa rating. what happened? in fact this government is now borrowing more than was forecast by the independent obr but forward for conciliation. bore roger has gone up but yet the bond market vigilantes hasn't emerged. talking about the gilt market going up -- basic economics. >> you seem to be angling fiscal consolidation is responsible for the weak growth in this country which i'm not sure it is. i

underlying very strong trends in all of our three business division, asset management particularly with pimco at the top is doing outstandingly well, our property casualty business is delivering because we're switching from investment product more to risk base product, also delivering really well. so we just confirmed our out look to make at least 8.2 billion euros in operating profit for the total year. we're very happy with the performance given this extremely difficult environment. >> i'm struck here, is it premiums are going up? they are going up in regions that have been hit hard by big market volatility. can that trend continue? >> we hope so. we see absolute flight to quality, should be no surprise. we're one of the few aa credits around. we have better rating than some countries and that for clients that's a reassuring sign that their money is safe with allianz. >> what happens in terms of consultation. if there's a flight to quality as you put it, other players must be feeling the heat a little bit. is that going to provide you with acquisitional opportunities? >> absolutely. particu

tomorrow we'll talk to another former treasury official, pimco's neel kashkari will talk about europe, the fed and global stock picks for your portfolio. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. >>> the european commission said to detail proposals for a european zone banking authority. joining success jim millstein, chairman and ceo of the advisory firm millstein and company and treasury department's former chief restructuring officer. jim, good to see you.

. >> it strikes me all of the conversations you heard from this from pimco and bullard and everybody in between they could all be right. you could see some action from the fed. will the market view it as significant enough to kind of rally and boost stocks or will it view it as this is bad news because you it means the economy is not doing enough of a joibt self and not getting a massive boost. >> that's the danger. it has to say we're doing it for this reason. the reason we're doing it the economy is not so great. it has a confidence effect on the economy. i want to know if the fed does qe do i still get the steak dinner. i told him no qe3 after qe2. i don't know it was open ended. >> you may lose. >> my bad for not cashing in. >> for not taking that up. we saw big moves after the fed did release those minutes two days ago and saw some counter moves yesterday as people worried that the fed wouldn't step in as much. gold got a massive boost, jumped by 1% on those minutes. people are talking about gold. do republicans really love gold? "financial times" is reporting the republican par

. >> just got a tweet from bill gross over at pimco who said it was clear to him at least that ber nanky is going to go out guns blazing his words with qe, might not happen today, but it's going to happen. is that a wise view? >> i doubt it. i don't think the federal reserve will take any action, certainly not until the fiscal cliff, the fiscal uncertainties are actually addressed. if they're not addressed and the economy falls off the cliff, yes, then you may get qe-3, but i don't see that happening before the election. >> all right. it sounds like you're saying it's really in congress' hands. >> absolutely. and, you know, the fiscal cliff as it's known is essentially forcing congress' hands. the administration has to address the problem. otherwise you get the tax increases that will be there. you get the mandatory spending cuts. and that will be really detrimental for the u.s. economy. >> people are trying to parse through the speech. i want to read to you a brief sentence which some are calling at least one of the key paragraphs. the chairman references various studies considering the

pimco, my friend, is beating amazon. i'm not saying it's game over. i'm saying it's game over for people trying to interpret what the germans will do. that's not my game, never has been, won't start now. >> we'll continue to monitor the headlines out of the ecb press conference, especially when the q&a starts. meanwhile, shares of knight capital group plummeting a second day. electronic glitches caused price swings in dozens of stocks are likely to cost the company $440 million in losses. it has traded out of its entire erroneous trade position adding clients were not hurt by those order. but it is pursuing strategic moves to strengthen its capital base, which it also says is still within compliance at this point. this is a remarkable -- i've not seen a decline like this since probably the financial crisis in terms of the sheer percent loss in 24 hours. >> 24 hours. >> this hours. >> tommy joyce came on the show, talked about how bad facebook was. this is a very tough situation for knight capital. obviously we don't know their exact cash balance. we k