Bill Gross: Obama or Romney — what's the difference?

Time to vote!

So I pulled out my magic lamp that for some reason works only every October 22nd, and rubbed until the Genie appeared in his red and white checkered cloak with a 10-inch diameter Flavor Flav clock hanging ceremoniously around his neck. Being a rather forward, although not disrespectful Genie, he immediately said, “Mr. G, instead of the yield on the 10-year Treasury, perhaps this year you should wish to know who is going to win the Presidential election?” After some thought I replied, “Nah, I need some breaking news, Mr. Genie, something that will make a difference, something that will shock the world, like when does the iPhone 6 come out?” Obama/Romney, Romney/Obama – the most important election of our lifetime? Fact is they’re all the same – bought and paid for with the same money. Ours is a country of the SuperPAC, by the SuperPAC, and for the SuperPAC. The “people” are merely election-day pawns, pulling a Democratic or Republican lever that will deliver the same results every four years. “Change you can believe in?” I bought that one hook, line and sinker in 2008 during the last vestige of my disappearing middle age optimism. We got a more intelligent President, but we hardly got change. Healthcare dominated by corporate interests – what’s new? Financial regulation dominated by Wall Street – what’s new? Continuing pointless foreign wars – what’s new?

I’ll tell you what isn’t new. Our two-party system continues to play ping pong with the American people, and the electorate is that white little ball going back and forth over the net. This side’s better – no, that one looks best. Elephants/Donkeys, Donkeys/Elephants. Perhaps the most farcical aspect of it all is that the choice between the two seems to occupy most of our time. Instead of digging in and digging out of this mess on a community level, we sit in front of our flat screens and watch endless debates about red and blue state theologies or listen to demagogues like Rush Limbaugh or his ex-cable counterpart Keith Olbermann. To express my discontent, Genie, along with my continuing patriotism, I’ve created a modern-day version of our Pledge of Allegiance. Place your hand over your clock and recite after me:

I pledge allegiance to the flag of
the fragmented state of America,

and to the plutocracy for which now it stands,
a red and blue nation,
under financial gods
indistinguishable,

with liberty and justice for the 1(%).

“Well,” said the Genie, with a little bit less respect in his voice, “you sound a little discouraged Mr. G – a tad cranky perhaps and showing all of your 68 years.” I suppose, I agreed. But during all those years, I’ve liked Ike and despised Bush Junior, been enraptured with Kennedy and enraged by Johnson, been put to sleep by both Ford and Carter and then invigorated by Reagan. And now – well, we’ve got the best government that money can buy, but I ain’t buying it. Now get back in your lamp and come up with something meaningful I can use this time come October 2013. And don’t fake me out with a picture of a skinnier but faster iPhone 6. I’m still trying to buy the “5” with the .01% interest on my money market account.

Perhaps I should have asked Flavor Flav something more important. iPhones and next year’s 10-year Treasury yield aside, the biggest bet being wagered in financial markets these days is the bet on “financial repression,” “quantitative easing,” and the ultimate effect of both on the real economy. Of course even a genie couldn’t come up with a simple answer to that complex question. Sounds like something to be asked of a shrink from a couch, as opposed to a genie in a bottle. Whatever. But let me try and answer the repression and QE question with a little anecdote that I tell visiting clients.

About four years ago I opened up our family brokerage statement and searched with some effort to find the yield on our money market account. Interest rates, as I knew from my desk in Newport Beach, were plunging and I wondered just how much of a penalty we were being charged for the privilege of holding cash. My eyes finally fixed on the appropriate disclosure – hidden though it was – and it said “.01%.” Impossible! I thought. There must be a mistake here. Surely the decimal point was misplaced. Wasn’t “.01%” really 1% or even .1%, but definitely not “.01%.” That was close to nothing! Having counted cards at the blackjack table in my youth, I quickly calculated that over the next 12 months, our $10,000 balance would earn exactly $1.00. “Buy yourself a pair of shoes,” I said to Sue standing near my shoulder, “a pair of sandals at the weekend garage sale.” The remark was not well received. It seemed Sue was as sensitive about shoes as I was about interest rates. Note to self: Do not mention shoes with Sue except in the phrase “what a cute pair of shoes.”

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