PIMCO's Gross: Obama's populism will slice into earnings, GDP growth


PIMCO's Bill Gross says President Obama's populist stimulus programs will have financial and economic consequences.

In his monthly investment outlook, Gross says investors should not expect capitalism to return to business as usual after financial markets have stabilized and economic growth resumes. Several months back, U.S. Treasury Secretary Timothy Geithner predicted that, "Capitalism will be different." Now, Gross tells investors what he thinks the new era's key feature will be: slower GDP growth, which will weigh on the value of some stocks and bonds.

"Investors should recognize that this grassroots trend signals -- most importantly -- an increasing uncertainty of cash flows from financial assets," Gross wrote. "Not only will redistribution and re-regulation lead to slower economic growth, but the financial flows from it will be haircutted and 'burden shared' by stakeholders."