Pimco's El-Erian says economic conditions 'terrifying'

Pacific Investment Management Co.'s Chief Executive Officer Mohamed A. El-Erian said U.S. economic conditions are “terrifying” given that the nation is coming out of recession. The odds of the U.S. returning to recession are one-third to half, El-Erian said in a Bloomberg Television interview with Betty Liu. RELATED ITEM Recession? What the financial gurus think » The economy in the U.S. expanded less than previously estimated in the third quarter, reflecting a drop in inventories that points to a pickup in growth as 2011 comes to a close. Gross domestic product climbed at a 2 percent annual rate from July through September, less than projected and down from a 2.5 percent prior estimate, revised Commerce Department figures showed today in Washington. The median forecast of 81 economists surveyed by Bloomberg News called for no revision. Excluding stockpiles, so-called final sales climbed 3.6 percent, the most since last year's fourth quarter. Pimco's $244 billion Total Return Fund (PTTRX), the world's largest mutual fund, has returned 2.3 percent in the past year, lagging behind 79 percent of its peers, according to data compiled by Bloomberg. Over the past five years, the bond fund has returned 7.7 percent on average, topping 97 percent of rival funds. --Bloomberg News--