You'd think Krugman gave Gross bad investment advice like, you know, there's a "bear market in Treasury's" coming unless we have some major austerity.
"Gross’s lack of enchantment may have something to do with this. Regular readers may recall that early last year Gross was predicting a big spike in interest rates when quantitative easing ended, and I argued that this was all wrong."
"So, I guess we know how that turned out. Although maybe not, since I constantly encounter people — including investors! — who insist that I’ve been wrong about everything. (A lot of this seems to depend on assertions that I made predictions I never actually made)."
So Gross is not a "big Krugman advocate" but he does actually admit some interesting points:
"I’m not a big Krugman advocate. But I agree that you don’t cut everything and hope the private markets reward you for it. It has to be a balance. What Europe really needs is to get the private market back in there. They’re trying to convince the Pimcos of the world to return (by having the European Central Bank lend to banks), but all the efforts so far use public money. The global marketplace is privately funded. And if the private markets can’t be convinced, this crisis is going to be with us for a very long time."
"No, that doesn’t work. Eliminating a budget deficit won’t produce growth. It really requires a delicate combination of growth and budget discipline over the longer term. Policymakers have it tough."
That is a news flash-eliminating a budget deficit doesn't produce growth?! Can we get this guy an appointment with Mario Draghii and Angela Merkel?