Global leaders are taking investors and companies on wild rides these days thanks to bickering and unclear policies, say Mohamed El-Erian, CEO of Pimco, a bond fund with over $1 trillion in assets.

"Policymakers are in control today and they are driving this car very erratically; they’re not even telling you what the destination is, especially in Europe; and instead of looking through the windscreen, they’re arguing among each other. It feels really volatile and unsettling," El-Erian tells CNBC.

Germany recently gave expanding a European aid facility the green light, but only more concrete actions will calm debt and default fears across the Atlantic.

Mohamed El-Erian (Associated Press photo)

"What we need to see over the next few days is stabilization of the sovereign debt and bank situation," El-Erian says.

In the U.S., meanwhile, government leaders have not dealt with a weak housing sector, debt burdens or crumbling infrastructure, leaving the Federal Reserve alone to act via loose monetary policy.

These agencies "have been asleep at the wheel" and must "wake up and get their act together. You can’t have the Fed do everything. The Fed is not in a position to deliver outcomes," El-Erian adds.

Healthy multinationals are sitting on the sidelines thanks to unclear government policies and not investing.

"The problem is these healthy balance sheets are not engaging. They are waiting. As long as they wait ... markets remain under pressure and, unfortunately, unemployment is going to stay unacceptably high."

Economists at the International Monetary Fund, a multilateral lending institution funded by many countries, are worried.

"The global economy has entered a dangerous new phase," says IMF chief economist Olivier Blanchard, according to the Associated Press.

"The recovery has weakened considerably. Strong policies are needed to improve the outlook and reduce the risks."