Banks may have seen the worst of the financial crisis, but the economy will slog through more difficult times. That was the assessment that Pimco Manager Bill Gross gave to Reuters.

Gross is concerned, however, that banks are not yet readily loaning money, and housing prices continue to fall. “We have probably seen the worst of the credit crisis from the standpoint of the banking balance sheets, to the extent that they’ve already received a lot of capital and are going to get some more,” Gross said.

However, Gross was not so sanguine about corporate bonds. “We haven’t seen the worst of it from the standpoint of defaults,” Gross continued, “in terms of the high-yield market and small corporations, layoffs in terms of individuals, higher unemployment rates. The worst is ahead for the real economy.”


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