Pimco Guru: 10 Percent Stock Drop Ahead
Homes are selling at their fastest clip in nearly three years, the unemployment rate is falling and stocks are up 66 percent since their March lows — the best performance since the 1930s.
What's not to like?
Plenty, according to Mohamed El-Erian, chief executive of giant bond manager Pimco.
The investor says the recovery may be gaining steam but is no different than a kid who eats too much candy at one of the birthday parties his 6-year-old daughter attends.
"We're on a sugar high," El-Erian says. "It feels good for a while but is unsustainable."
His point: This burst of economic activity fed by government spending and near-zero interest rates will soon peter out.