Billionaire Bond King Talks Inflation, Interest Rates, and More | At Barron's

Summary

In an insightful interview, 'Bond King' Bill Gross discusses the current economic landscape, highlighting the rise in inflation and its impact on the 10-year treasury rates. He critiques the Federal Reserve's approach under Jerome Powell and expresses skepticism about the future of total return funds for bonds. Gross shares his investment strategies, advocating for master limited partnerships in pipelines for their tax-deferred yields. He also touches on his personal interests, including a new book, 'The King and I,' which compiles 46 years of his investment outlooks and musings.

Takeaways

• 📈 The 10-year treasury rate is at 4.5%, indicating a rise in inflation from 1% a few years ago to the current rate, reflecting concerns about future inflation.
• 💭 There's a debate on whether inflation will stabilize at 4% or 5%, with Bill Gross leaning towards the latter.
• 📊 Real interest rates are expected to be higher than in the past, suggesting an inflation forecast of 2-3%, which is the Federal Reserve's target and market expectation, respectively.
• 🏛 High government spending and annual deficits, around 5-6% of GDP, are contributing to persistent inflation.
• 🤔 Bill Gross does not rate Jerome Powell highly, believing the Federal Reserve is more focused on social considerations than economic ones.
• 👴 Paul Volcker is praised for successfully reducing high inflation in the past, making him a standout Federal Reserve Chairman.
• 📉 The concept of total return for bonds, which Gross popularized, may no longer be as effective due to current interest rate environments.
• 📌 Gross's strategy for delivering extra return was to have a duration slightly longer than the index, which could produce decent total return through price appreciation.
• 🚫 Total return funds have become more like index funds, not delivering the alpha that investors might expect.
• 🛢️ Gross is currently investing in master limited partnerships, particularly pipelines, for their steady returns, low risk, and high tax benefits.
• ✍️ His new book, 'The King and I,' is a compilation of 46 years of investment outlooks and personal reflections, offering insights into his thought process and approach to investing.
• 🌍 Despite challenges like global warming and aging populations, Gross remains optimistic about the human species and the potential for societal progress.

Q & A

What is the current rate of the 10-year treasury and what does it indicate about inflation?

The 10-year treasury is currently at 4.5%, which is the highest it has been since 2007. This rate indicates that inflation has risen significantly, moving from around 1% a few years ago to the current 4.5%.

What is Bill Gross's stance on the future inflation rate?

Bill Gross is in the camp that believes inflation will be around 5%, but acknowledges a debate about whether it will be closer to 2% or 3%. He suggests that real interest rates will likely be higher than in the past.

What are the reasons behind the persistent inflation according to Bill Gross?

Gross attributes the persistent inflation to government spending, with annual deficits of 1.5 to 2 trillion dollars, which is 5 to 6% of GDP, and the economy performing better than people think, growing at 3 to 4% in the last 12 to 18 months.

How does Bill Gross rate Jerome Powell's performance as the Federal Reserve Chairman?

Bill Gross does not rate Jerome Powell highly, suggesting that the Federal Reserve is not as oriented towards economics as it should be and that Powell has made some inaccurate forecasts in the past.

Who does Bill Gross consider to have done a good job as a Federal Reserve Chairman?

Gross holds Paul Volcker in high regard for having successfully reduced inflation close to 20% with high interest rates, which he acknowledges was a difficult task.

What is the concept of total return funds for bonds as popularized by Bill Gross?

Total return funds for bonds, a concept popularized by Gross, suggest that bonds can earn not only interest but also potential price gains if appropriately priced. This was particularly effective in the early 80s when interest rates were high, and bonds could appreciate significantly in price.

Why does Bill Gross believe that the total return strategy for bonds no longer works?

Gross thinks that the total return strategy for bonds no longer works because current interest rates are at 4.5%, making it debatable whether a bull market can produce price increases and a total return greater than 4.5%. He suggests that investors should expect a 4.5% return at best.

What does Bill Gross criticize about current total return funds?

Gross criticizes that total return funds have become essentially index funds and are not delivering alpha. He contrasts this with his time at PIMCO where they were able to deliver alpha by having a duration slightly longer than the index.

What is Bill Gross currently investing in, given his lack of interest in bonds?

Gross is investing in master limited partnerships, specifically pipelines in the oil and gas sector, which offer 8 to 9% tax-deferred yields and have shown significant price appreciation in the last 12 to 18 months.

Can you name some of the master limited partnerships that Bill Gross finds attractive?

Gross mentions Energy Transfer, which yields about 7.9%, and Western Pipeline, which has recently raised its dividend by 30 to 40% and yields 9.9%.

What are Bill Gross's thoughts on utility stocks and their potential?

Gross believes that utility stocks, despite their low yields of around 4%, have the potential to go higher due to the tremendous demand for power from AI-generated companies.

What is the title of Bill Gross's new book and what does it contain?

The title of Bill Gross's new book is 'The King and I', which is a compendium of 46 years of investment outlooks, musings, and common sensical thoughts from him. It includes personal reflections as well as investment forecasts.

What does Bill Gross regret about one of his past writings?

Gross regrets writing an introduction about Norm McEner, an overweight baseball umpire who died of a heart attack, where he criticized the umpire's weight, which led to losing the account of managing a fund for the National League Umpires Association.

What are some of Bill Gross's personal interests outside of finance?

Outside of finance, Bill Gross has interests in stamp collecting, where he became one of the largest stamp collectors, and he also served in Vietnam and used to play blackjack.

How did Bill Gross end up in Southern California?

Bill Gross ended up in Southern California after serving in the Navy in San Diego. He then applied to and attended Anderson at UCLA, which kept him in Southern California.

What is Bill Gross's outlook on the United States and the human species?

Gross is optimistic about the human species, stating that it will endure and that human nature is generally optimistic. However, he acknowledges the challenges such as global warming, conflicts, and demographic shifts, particularly the aging of the baby boomer population.

Outlines

00:00

📈 Economic Outlook and Bond Market Insights

In the first paragraph, Andy Serwer interviews Bill Gross, the 'Bond King,' discussing the implications of the 10-year treasury yield being at 4.5%, a level not seen since 2007. Gross attributes this to increased inflation, which has risen from 1% a few years ago to the current 4.5%. He predicts real interest rates will be higher, with a debate between 4% and 5% inflation forecasts, leaning towards the latter. He also criticizes the Federal Reserve's actions, particularly Jerome Powell's, suggesting the Fed is more focused on social considerations than economic ones. Gross commends Paul Volcker for combating high inflation in the past. The conversation hints at the challenges in the bond market and the potential for higher interest rates, reflecting concerns about the economy's direction.

05:03

💼 Reflections on Total Return Funds and Investment Strategies

The second paragraph delves into the concept of total return funds, which Gross helped popularize. He explains that while bonds traditionally offered interest and potential price gains, the current environment with a 4.5% 10-year yield makes it difficult to achieve the same total returns as in the past. Gross believes that total return funds have become too much like index funds, not delivering the alpha they once did. He shares his strategy of maintaining a duration slightly longer than the index to achieve better returns. The paragraph also touches on his current investment interests, including master limited partnerships in oil and gas pipelines, which offer attractive, tax-deferred yields.

10:05

🚀 Exploring Alternative Investments and Market Opportunities

In the third paragraph, the conversation shifts to alternative investments. Gross discusses his interest in master limited partnerships, particularly pipelines, which have seen significant price appreciation and offer high tax-deferred yields. He mentions specific companies like Energy Transfer and Western Pipeline, highlighting their recent performance and potential. Gross also briefly touches on his foray into conservative AI stocks and utility stocks, which have been bolstered by the demand for power from AI companies. He suggests that utility stocks may continue to rise despite low yields, indicating a potential bubble in the market.

15:08

🎉 Personal Achievements and Investment Philosophy

The fourth paragraph focuses on Bill Gross's personal and professional achievements. He discusses his new book, 'The King and I,' which compiles 46 years of investment outlooks and personal musings. The book is a reflection of his public image versus his personal thoughts and experiences. Gross also talks about his contrarian and outspoken nature, expressing regret over a comment that cost him a client but also pride in his ability to connect with clients through his writings. He shares his interests outside of finance, including his passion for stamp collecting, which led him to become a significant collector in the field.

20:11

🌏 Outlook on Humanity and the Future of Investing

In the final paragraph, the discussion centers on Gross's optimism for the future of the United States and humanity. He acknowledges the challenges faced by society, such as global warming, conflicts, and aging populations, but maintains a positive outlook on human nature and the resilience of societies. Gross believes that it is unwise to bet against the market or people, emphasizing the enduring nature of human progress and the potential for continued societal advancement.

Keywords

💡Barons

Barons is a reference to the show 'At Barons' where the conversation in the transcript takes place. It is a platform where financial and economic discussions are held, often featuring prominent figures in the industry. In the context of the video, it is where Andy Serwer interviews Bill Gross, discussing various financial topics.

💡Bond King

The term 'Bond King' is a moniker given to Bill Gross, recognizing his significant influence and success in the bond market. It signifies his expertise and leadership in the field. In the video, Bill Gross is referred to as the 'Bond King,' highlighting his authority on the subject matter being discussed.

💡10-year Treasury

The '10-year Treasury' refers to a debt obligation issued by the U.S. Department of the Treasury that matures in ten years. It is a benchmark for long-term interest rates and plays a crucial role in the economy. In the script, the 10-year Treasury yield is discussed as an indicator of inflation and economic outlook, currently at 4.5% which is high by historical standards.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. In the video, the rise in inflation from 1% a few years ago to the current 4.5% is highlighted as a significant economic factor, affecting interest rates and the overall financial landscape.

💡Real interest rates

Real interest rates are the rates of interest an investor earns or pays after allowing for inflation. They indicate the true cost of borrowing, adjusted for the general rise in prices. In the transcript, Bill Gross suggests that real interest rates are expected to be higher than in the past, reflecting the current inflationary environment.

💡Fiscal spending

Fiscal spending refers to the amount of money spent by the government. It is a key component of economic policy and can influence economic growth and inflation. In the script, the discussion points to high fiscal spending contributing to the current inflationary pressures and the overall health of the economy.

💡Federal Reserve (Fed)

The Federal Reserve, often referred to as 'the Fed,' is the central banking system of the United States. It plays a critical role in setting monetary policy, including interest rates, to promote economic stability. The script includes a critique of the Fed's actions and its approach to economic considerations under Jerome Powell's leadership.

💡Total return

Total return in the context of investing refers to the full return of an investment, which includes interest, capital gains, or changes in the value of the investment. In the video, Bill Gross discusses the concept of total return in relation to bonds, noting that the environment for achieving high total returns through bond investments has changed significantly.

💡Alpha

Alpha in finance refers to the excess return of a portfolio relative to the return of a benchmark index. It represents the value that a portfolio manager adds or loses through their security selection and market timing. The script mentions that total return funds have become index funds and are not delivering alpha, indicating a shift away from active management strategies that Bill Gross is known for.

💡Master Limited Partnerships (MLPs)

Master Limited Partnerships are a type of business structure that allows for tax advantages and is often used in the energy sector. In the video, Bill Gross discusses investing in MLPs as a way to find bond equivalents, highlighting their attractive tax-deferred yields and potential for price appreciation.

💡Utility stocks

Utility stocks are shares of companies that provide essential services such as electricity, gas, or water. They are often considered stable investments due to their consistent demand. In the script, there is a discussion about the rise in utility stocks, attributing it to the increased demand for power from AI and other tech companies.

💡AI (Artificial Intelligence)

Artificial Intelligence refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. In the video, AI is mentioned as a factor driving up the demand for power, which in turn has an impact on the performance of utility stocks.

Highlights

Bill Gross, known as the Bond King, discusses the current 10-year treasury rate at 4.5%, its highest since 2007, indicating rising inflation.

Gross believes in a 5% inflation rate, higher than the 4% some predict, reflecting on future inflation forecasts.

He criticizes the Federal Reserve's approach, particularly Jerome Powell's, for not being oriented enough towards economics.

Gross praises Paul Volcker for bringing down inflation with high interest rates, despite the difficulty.

The concept of total return funds for bonds, popularized by Gross, is questioned as he believes it no longer works in the current economic climate.

Gross's strategy for delivering extra return was having a duration slightly longer than the index, which is not common among current fund managers.

He is currently investing in master limited partnerships, particularly pipelines, for their tax-deferred yields and regulatory appeal.

Gross mentions specific investments like Energy Transfer and Western Pipeline for their attractive yields and potential.

Utility stocks are highlighted as an area of interest due to the increased demand for power from AI and tech companies.

Gross has released a new book, 'The King and I', compiling 46 years of investment outlooks and personal reflections.

He expresses regret over a past comment about a baseball umpire that led to losing a client account.

Gross shares his pride in personal writings, particularly poems about 'Out of Africa' and his childhood home.

His interest in stamp collecting was initially inspired by his mother and later became a significant investment strategy.

Gross moved to Southern California after serving in the Navy and has been based there since, despite missing Northern California.

He remains optimistic about the human species, believing in the enduring nature of society and progress, despite current challenges.

Gross advises against betting against the market or people, reflecting his contrarian and outspoken approach.

Transcripts

[Music]

hello everyone and welcome to at Barons

I'm Andy serwer and Welcome to our guest

Bill grows investor the bond King we're

here at your house thank you so much for

having us bill it's great to see you

it's great to see you it's a great day

it's 85 degrees and uh nobody on the

course too hot for them you

think yeah they leave after e they go to

Chicago they go to Seattle they they

leave here but may is a good month Bill

let me ask you about the 10-year

treasury which is at 4 and a half% now

hasn't been this High since 2007 that's

a long time what does 4 and a half% on

the 10e tell us about where we are how

we got here and where we're going well

it tells us that uh inflation has gone

up you know back in the day two or three

years ago um

it was

1% now we're at four and a half and and

so inflation has risen and and it's

reflecting the the future of inflation

and to my way you're thinking you know

there's this debate about um 4% or 5%

I'm in the 5% camp but it's basically a

similar debate about inflation will it

be two or will it be three um you know I

think it's fair fairly evident that real

interest rates will be higher than they

were back in the day they couldn't get

much lower um so we're really talking

about an inflation forecast of uh 2%

which is what the FED wants 3% which is

what uh you know many in the marketplace

including myself think is going to

happen why is that why is inflation

persistent why is it higher why is it

maybe higher longer well the government

spends a lot of money um you know we

have annual deficits of

uh1 and a half to2 trillion dollar um

which is five to six% of GDP which is

close to Historic ranges for a a good

period of time of economic growth and so

um you know it's the government spending

it's a fiscal spending coming out of

covid it's the

um uh the economy that's doing much

better than people think at 3 to 4% and

the last 12 to 18 months what kind of

job do you think J Powell has done how

do you rate

him I don't rate him highly um and maybe

this goes back to the the early part of

the century in which uh the FED didn't

know much in terms of derivatives and in

terms of uh you know credit fall swaps

and so on um I I I have a sense that the

FED itself and you talked about J poell

but I I have a sense that the fit itself

that is not as oriented towards

economics as opposed to social uh types

of considerations and so I I'm a little

suspicious of um of their judgment going

forward Powell in the last 12 to 18

months is you know put his foot in the

mouth to some extent on some of his

forecasts he doing sort of good now um

we'll we'll see but um I trust the

market more than J pal um the market I

believe uh trusts Jal too much I'm going

to ask you are there any fed shares that

you think did a good job a lot of people

like to criticize fed shares I feel like

is there anyone you hold up and said now

that person did a good job oh yes it's

Paul Walker you know he shut it down he

shut down uh close to 20% inflation uh

with very high interest rates and it was

painful and hard to do as a Fed chairman

but uh you know he's the mench he's the

man

and that's a long time ago you know

since then there's been uh other

chairman banki and and uh greenan

greenpan oh of course with greenpan um

but I think I think vuler is the

historical uh mench historical mench you

have uh been writing your whole career

we'll talk more about that but most

recently you've written about the

ibility of this notion of Total return

funds and total returns for bonds which

is something a concept and a phrase that

you popularized yourself what does it

mean that total returns for bonds no

longer

works well Total return and the pimpo

total return fund was the first that uh

basically used that that term um you

know it suggested that bonds earn

interest yes and they have a yield yes 4

and a half% um but they also have the

potential uh for Price gains if

appropriately priced and you know back

in the day back in uh the early 80s when

the concept was basically invented um

you know interest rates on the tenure or

15% and so it was a pretty favorable

environment for um treasuries to

appreciate in price go down and yield

and so the total return concept uh you

know it took a 15%

10-year note and combined it with price

appreciation of three to four to 5% a

year over that period of time U and you

produced a total return not of 15% but

of 20% and that was the point where you

know people thought that bonds um could

do as well as stocks and they did for a

long period of time now uh we're at a

point in time time of 4 and a half% 10

years and the debate is whether or not

uh we can resume a bull market produce

price increases and uh produce a total

return greater than 4 and a half per. I

think that's um debatable I I don't

think that's going to happen and I think

investors you know have uh you know to

look forward to a 4 and a

half% return at Best and that the total

return um is something that depends on

price appreciation lower yields and so

therefore um we're not going to see it

the next leg of your criticism beyond

that I think was that the total return

funds have now become essentially index

funds yes and they're not delivering

Alpha you famously delivered Alpha in

addition to just the index return and

I'm curious Bill what your specific

strategies were to deliver that extra

return

well the the main thing was to to have a

duration longer than the index um it

didn't take much but half a year longer

one year longer in terms of duration

would produce you know some decent Total

return price

appreciation um in the PCO Total return

these days um as I observe uh haven't

talked to Pimco and haven't talked to

Black Rock haven't talked to a lot of

them but um you they seem to be very

closely following an index and the the

Vanguard index um ETF uh or Index Fund

over the last five years has only uh

produced a total return of

0.15% cumulatively cumula not annually

cumulative cumulative so an investor in

bonds for the last five years if you

followed that index type of approach

would would come out with uh certainly a

negative return relative to inflation

and so um I I I simply think that most

managers have fallen in love with yeah

being a little longer than the index

being a little shorter than the index if

they can just produce an alpha of 50

basis points perhaps they'll uh keep

their uh client base you know back in

the day with the Pimco tural return fund

we were willing to take a little more

than that uh because we had a view we

had a view on the secular forecast in

terms of interest rates that they would

be going lower and so you know it was

relatively constant in terms of a half a

year one year longer than uh the index

itself and that was enough yeah what do

they say you can't eat relative returns

for lunch if it's relative to a negative

number for instance or something like

that you need an absolute exactly I know

you still follow the markets what are

you can you tell us what you're

investing in these days or what you're

following in what you're interested in

well actually I've got a few clients

I've got a large Foundation uh which is

$500 million um which is I guess my

largest client and then there's uh my

own money and my kids trust money and so

um there's a lot of money working um you

know what I decided to do since I don't

like bonds um the bond King doesn't like

bonds right not at the moment um but to

find Bond equivalence um where the

return is relatively steady the risk is

relatively low the tax benefits are U

very high and and so that's been in

master limited partnership pipelines um

there's only six or seven of these

things left oil and gas pipelines yes um

but they're Partnerships and and the

reason they're so attractive is that

first of all their their dividends by

law um are deferred until sold um and

second of all mutual funds for the most

part can't buy a partnership and so you

have this huge base of potential buyers

that have been cut out of the market

because of you know regulatory law and

so attractive um 8 to 9% tax deferred

yields um they've gone up by 25 to 30 to

35% in the last 12 to 18 months it's

been a Wonder it's been almost as good

as AI

okay Nvidia watch out so and they're

still upside at this point you think for

these things or at least the yield I

think they've sort of peaked out in

terms of price appreciation but the

yields um you know assuming that um

there are any disasters in terms of

energy and uh pipeline regulatory uh uh

measures going forward uh you know an 8%

tax deferred yield uh if you blend in

the tax deferral which I do it's it's

really a 10 or

11% equivalent yield to uh basically

anything else so I I like them what are

some of those names can you share those

with us um energy transfer is the

biggest in the business um it yields

about 7.9% now

um Western pipeline my favorite um you

know has just raised its dividend by 30

40% in the last two or three months the

market really doesn't have a sense of

that I don't think but it yields

99.9% um tax deferred prospects are good

um I don't know how you I know how you

go wrong but I don't think you go

wrong awesome um so any other equities

though or anything else that you want to

talk about I've taken a dabble in uh

some of the conservative AIS I own

Microsoft I own IBM um never in Nvidia

um just to upside downside for me um but

those have been the the primary ones

there's you know there's an interesting

play now in in terms of utility stocks

they've done very well um and it's not

necessarily because interest rates have

uh gone down a little it's because of

the the tremendous demand for power from

AI uh generated U you know types of

companies and so you know you see stocks

like Edison or Con Edison um and others

dominion and so on that uh you know

despite their low yields of 4% or so

they uh have gone up by 10 or 15% and so

yeah there's a little bubble potential

there but I I think um utility stocks

believe it or not have uh the potential

to go higher you uh just had a big

birthday happy birthday to you oh thank

you um and I'm 80 now 80 years old yeah

um and you have uh a new book which is a

compendium relates called The King and I

46 years of investment outlooks musing

and common sensical thoughts from Bon

King Bill gross do I have that right you

do have that right okay what's The King

and I who who else is here well that's a

u Briner type of thing I guess and it

came from my publicist but uh it it's

meant to basically say there was uh a

public King and then there was I there

was me uh nowhere close

to what the uh what the Public Image was

uh to my way thinking and my wife

Amy uh very bashful guy so the writings

in this book it's a digital book yes and

you can buy it $9.95 all right there you

are um a bargain uh how many pieces is

it it's from 1978 from your earliest

days at pinco the company you helped

found right there are 40 years worth of

investment outlooks and you know back in

the day um nobody wanted to at Pimco

nobody wanted to write a monthly Outlook

I thought it was important to connect

with clients and uh so I started writing

outl but didn't want to make them dry

and boring and so I

introduced um you know the first page or

the second page in terms of

introspective uh ideas about myself

about it human nature Etc and there's 40

years worth of these and I I guess it's

in addition to the forecast which

obviously produced you know incredible

results going forward um you know I I

think the first or second pages of many

of these um investment outlooks are what

are important to me and what I want my

kids to know about me and to read

they've read some of them but I doubt

they've read all 40 years worth so

you're known to be frank contrarian

outspoken even sometimes I wonder if you

have any uh regrets about some of those

things you've written or and then then

also you know what are the highlights

what are the things you're most proud of

I guess it's a pluses and minuses there

is one regret uh we we managed a fund

for the National League

umpires um Association Baseball umpires

yes and I I came out with a uh an intro

about Norm mcer who was a overweight

umpire and who died of a heart attack

within um the first um I think few

Innings of opening day and so I I

criticized his fatness so to speak and U

we lost the account so I I regret that I

guess but it was very funny and I still

would recommend that to potential

readers going forward um what are you

most proud of most proud of you know

some personal things one uh that was a

really a poem uh about Out of Africa one

of the famous movies of 30 or 40 years

ago of Merill Street um and um one about

uh you know basically my my home and uh

what's called Butler Creek um where I

grew up in Ohio so those personal ones

are the my most favorite and I think U

they generated the most reaction from

the public themselves right you have all

these other interests and their

backgrounds pretty remarkable you served

in Viet Nam um you played blackjack yes

do you still play blackjack no um it's

too it's too boring and um takes the you

know I like the action on the craft

table although the craft table uh the

odds are a little against the roller um

but on a blackjack table if you're

counting cards properly they're a little

in the favor of the player and so um you

know you would wonder why I don't play

Black it just it takes too long and the

people at the table usually are

disgusted and um angry because they're

losing money and they throw their cards

at the table and so I like the craft

table better where you can yell and

scream and

71 and and what about I'm curious why

you got so interested in stamp

collecting you became one of the biggest

stamp stamp collectors ever ever right

ever stamps very proud of that for 20

years my my mother um collected

commemorative stamps 3 Cent stamps uh

back in the day to send me to college

and she gave me a box when I was 17 said

Bill take these to San Francisco and

sell them I tried uh they wouldn't offer

me anything other than three cents on

the on the dollar and um so I said well

she had a good idea but maybe she bought

the wrong stamps and so I applied the

the outwork of uh Bond investing to

stamps in terms of the provenance

inflation GDP growth what are they worth

now versus what are they worth uh 50

years ago and it uh seemed to have

worked out pretty well I became the um

perhaps

the largest uh

fatalist um in a long long time I know

you moved to San Francisco the Bay Area

when you were young with your family but

how did you end up in Southern

California well I ended up in the Navy

uh that was San Diego and coming out of

San Diego I had to get a job had to get

an

education um applied to Anderson um in

at UCLA and uh so sort of kept me in

Southern California um Miss Northern

California still root for the 49ers but

uh uh I've been a Southern California

guy for a long time and final question

Bill how optimistic are you about the

United States and the human species even

RIT

large well uh the the human species will

endure uh you know we will move on and

um you know to to doubt um human nature

is to take the wrong side human nature

in terms of optimism uh usually carries

today but we have our problems as we you

know uh in terms of uh global

warming globally in terms of conflicts

um demographics in terms of

Aging uh people the boomers are getting

much older now and they uh spend less as

opposed to more and so all of these

things have uh you know risk elements to

them in terms of the forward pricing of

of markets um you asked about human

nature I I think um you know there will

always be people there will always be

societies that uh want to do well want

to do better and and will do and so um

it uh it doesn't pay to bet bet against

um the market so to speak or to bet

against

people Bill gross thank you so much for

your time and thank you for having us

here well great to be

here this is at barens I'm Andy serwer

we'll catch you next time

[Music]