Zero-interest-rate Fed policy hampering economic recovery

Bill Gross said the retrenchment of banks is a troubling sign that he expects to persist well into the future as financial markets swing from one extreme to the other in terms of risk-taking.

"A 30- to 50-year virtuous cycle of credit expansion which has produced outsize paranormal returns for financial assets - bonds, stocks, real estate and commodities alike - is now delevering because of excessive 'risk' and the 'price' of money at the zero-bound," he wrote. "We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time."

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