Star bond-fund manager Bill Gross of Janus Capital Group warns that financial market bubbles are about to pop and that the bull market is nearing its end.

But Gross was asked by the New York Times if he thinks there is a bubble in stocks or in bonds?

“I think both. I sort of have a sense of an ending,” he said. “I think that the 35-year bull market in bonds and in stocks is ending. Now, when you say something like that, it conjures up a crash. It doesn’t have to be that way. It probably ends, like T. S. Eliot said, with a whimper and not a bang.”

He also thinks the long-time low-interest-rate environment has hurt the economy.

“The savings side of the economy has been damaged,” he said. “At two or three percent interest rates, there’s no way insurance companies and pension funds can justify their liabilities and guarantees going forward. Same thing with Mom and Dad and their expectations for education, retirement and so on,” he said.

So what’s the average person supposed to do? “Save more,” he said. “An investor could also take on more risk. I wouldn’t recommend that, but that is something investors are doing, which suggests there’s a bubble.”

Gross thinks that the Federal Reserve will finally raises rates — soon. “Probably sometime this year. You know, if you’re sick in bed, you’re lying around for 24 hours, at some point you just want to get out of bed and walk around the house for a while. And I think the Fed wants to get off zero, if only to get a sense as to whether they can begin the process of getting healthy again.”

Many other experts have also warned about financial bubbles.

“We are on bubble alert,” said Robert Buckland, global strategist at Citigroup Global Markets, in a note to clients, the Financial Post reported. “[But] it is still too early to fight this bull market. Expensive stocks may keep getting more expensive.”

Buckland believes equities are in the third phase of a bull cycle, which is when stocks keep performing well despite credit spreads starting to rise on the prospect of higher interest rates.

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