El-Erian: The Consensus Has Changed, Now Everyone Is Looking For "Self-Insurance"

On CNBC, PIMCO’s Mohamed El-Erian says the consensus has definitely shifted from the “V”-shaped scenario to the “New Normal” scenario that’s favoured by PIMCO.

Right now he thinks that perhaps the market has gotten too bearish, as investors romance the “double-dip” scenario, rather than the muddle along scenario.

What’s happening in markets, and the economy, is that everyone is looking for “self-insurance,” holding onto cash at their companies and in their portfolios.

Asked about the chief policy concern, El-Erian cites “inertia,” or the desire to maintain the status quo, rather than actually pursue meaningful structural reforms.

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