Yesterday. bond giant PIMCO published its secular outlook. The themes and views closely resemble those that have been discussed.

For example. PIMCO believes the global and financial markets could be entering a new era of potentially radical change where the next 10 years will look very different than the past 10. PIMCO states an issue at hand is that many investors are expecting and positioned for the continuation of the status quo, thus suggesting a possible rude awakening, an environment perhaps magnified by the massive concentration of funds in a few stocks and many utilizing similar trading strategies.

As widely noted and discussed by PIMCO, the last 10 years have been dominated by financial repression via regulation and dominated by central banks that were pivotal in creating weak growth in productivity and wages and a large drop in the labor participation rate.

Today, monetary fiscal policy mix is changing as central banks retreat and fiscal policy becomes more expansionary via tax reform. The regulatory discussion is moving from the financial to the tech sector and economic nationalism, populism and protectionism are on the rise.

PIMCO is suggesting the real economy could break out from the 10-year lull on a sustainable basis through a significant pick-up in productivity growth via massive capital spending, the likes of which have not been experienced in almost 20 years. This stronger growth, however, could produce higher real interest rates that will be detrimental to bond values and equity indices that appear “stretched and concentrated.”

Another possible scenario that could come to pass is one which PIMCO says could materialize in the next three to five years. It is a more extreme populist backlash that could result in several different scenarios including radical wealth and income distribution, more aggressive protectionism, attacks on central bank independence and perhaps nationalization of key companies or industries.

Wow! This is the first bulge bracket firm that has publicly stated that today is indeed tectonic. Will there be more forthcoming?

Yesterday was a mirror of the previous day. Equities recovered about 75% of the previous day’s losses. Treasuries reversed half of its gains. Oil advanced about 2.5%. The catalyst… a re-calibration of risk that Italy poses to the global economies.

Last night the foreign markets were up. London was up 0.22%, Paris was up 0.13% and Frankfurt was down 0.49%. China was up 1.78%, Japan was up 0.83% and Hang Sang was up 1.37%.