But my knee-jerk reaction is to raise a skeptical eyebrow whenever I hear the claim, "This time it will be different."
I agree. But, as a scientist, I like to see both evidence and a plausible, causal theory behind any explanation like this. I've always been bothered by the lack of a causal explanation for the empirical observation that stocks have returned 6% (or 6.6%) over inflation for the long term. (This seems to go back centuries as near as we can tell.) Most people chalk it up to some parameter of human behavior and risk/reward expectations. I think Gross misses out of proposing an explanation for why things have changed but I also think he is right in questioning WHY stocks could have returned so much. Simply projecting past returns forward is not an answer to me.
He also doesn't suggest any alternatives. He says stocks won't return. He doesn't expect bonds to either. He predicts inflation so don't hold cash...and before anyone brings it up, gold and real estate don't have the right characteristics either.
What we need is ACTIONABLE intelligence!