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Are You Prepared For Another 2008? Part 3
The
Financial World has entered a period that is strikingly similar to that of
2008, at least regarding three key issues. They are:
1) The
Oil/ USD correlation (as noted recently on ZeroHedge)
2) Bearish
bets against the US Dollar
3) “In
the Know” investors getting out of the market
We covered
#1 and #2 Parts 1 and 2 of this series of articles. This article is focused on
#3: “In the Know” investors getting out of the market.
First off,
investing legend Carl Icahn has closed his funds and returned money to
investors. His following note to investors makes it clear Icahn is EXTREMELY
concerned about the market going forward:
While
it may sound “corny” to some, the losses that were incurred by investors in our
funds in 2008 bothered me a great deal more, in many respects, than my own
losses…
While we are not forecasting renewed market
dislocation, this possibility cannot be dismissed. Given the rapid market
run-up over the past 2 years and our ongoing concerns about the economic
outlook, and recent political tensions in the Middle East, I do not wish to be responsible to limited partners through another
possible market crisis. After
careful consideration of all relevant factors, we have determined to return all fee paying capital to investors.
Let’s be
clear here. Icahn is one of the best investors of the last 30 years. He’s also
a master of buying distressed securities. So if he’s returning money to
investors it means he not only is extremely concerned about another 2008 type
event… but that he believes what’s to come will be so bad that the opportunity
to buy distressed securities (go long) and make money will not present itself
for quite some time.
In other
words, we’re going down, down, DOWN.
Another
investing legend who’s preparing for a disaster is Bill Gross, the legendary
bond investor at PIMCO.
As noted by
ZeroHedge, Gross has recently dumped ALL of his US Treasury holdings. Think
about that for a moment. The single largest bond investor on the planet has
ZERO exposure to US Treasuries right now. Instead, he’s sitting on record
amounts of cash.
Let me
explain the implications of this.
Bill Gross,
with the possible exception of Goldman Sachs, has the best access to the US
Federal Reserve and US Treasury Department of any investor on the planet.
During the 2008 Crisis it was rumored the Treasury had him on “speed dial.”
So for Gross
to be dumping ALL of his US Treasury holdings means that the US debt Crisis is
coming and coming fast.
It’s not
difficult to see why, Gross is obviously aware of the below chart which I’ve
shown you before:
This is the
28-year weekly chart of the 30-year Treasury’s performance. As you can see, we
are about to break the trendline that has supported Treasuries for more than 20
years.
This will
signal an end to the bull market in bonds, higher interest rates, and an
accelerated collapse in the US economy. Smart investors should prepare now for
what’s coming, because it won’t be pretty.
On that
note, if you’re getting worried about the future of the stock market and have
yet to take steps to prepare for the Second Round of the Financial Crisis… I
highly suggest you download my FREE Special Report specifying exactly how to
prepare for what’s to come.
I call it The Financial Crisis “Round Two” Survival
Kit. And its 17 pages contain a wealth of information about portfolio
protection, which investments to own and how to take out Catastrophe Insurance
on the stock market (this “insurance” paid out triple digit gains in the Autumn
of 2008).
Again, this
is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com
and click on FREE REPORTS.
Prepare Now!
Graham
Summers
PS. We ALSO
publish a FREE Special Report on Inflation detailing three investments that
have all already SOARED as a result of the Fed’s monetary policy.
You can
access this Report at the link above.
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More garbage from a bankrupt short...Going short is the inverse of being "long cash" and when the global CB's are in "Debase Mode", that is a disaster waiting to happen (if it hasn't already).
Never underestimate the replacement power of stocks within a stagflationary clusterfuck...
Really why would you hold USA debt? Bill Gross knows that the game is up, and is jumping the sinking ship, as all rats do. After, he can claim that he complained about QE and show these articles as the proof.
...for Gross to be dumping ALL of his US Treasury holdings...
That just cannot be an independent market call, but rather a positioning of Pimco to support future .gov sales under some pre-agreed terms and conditions...
Thanks for the replies folks.
No way QE3 doesn't happen....NO ONE and I mean NO ONE is buying US Debt other than the Fed....and government will protect government....inflation be damned....oh, and there is that little election cycle for 2012 coming up....don't think Mister President is going to want to campaign after a stock market implosion...
broken record comes to mind
<< Bill Gross, with the possible exception of Goldman Sachs, has the best access to the US Federal Reserve and US Treasury Department of any investor on the planet. >>
Ah, no.
The resident fly on the wall in Bernanke's inner sanctum is Jon Hilsenrath.
The only reason we are going down is to build a constituency for a continuation of QE. Shouldn't take more than a couple of months.
Yes I recognize that continuing QE will have bad ramifications. But the little people get the ramifications.
Latest interview with Eric Sprott.
Highlights here.
http://goldandsilverlinings.com/?p=378
....Dollar can rally as interest rates go up, euroland defaults, blah blah blah. Crank up the QT
Quantitative Trillions
Here's a theory...PimpCo is selling and convincing everyone to get out bonds so prices fall and yields rise. They will then load up and frontrun QE3 prior to announcement, with a little tipoff from Larry Meyer. The rationale for this is two-fold. 1. They can purchase bonds at lower prices in a riskless frontrun of institutional and fed money. 2. They can assist with the ST ramp of interest rates, which is being orchestrated to get on-the-fence homebuyers out for the spring selling season ("I need to buy before rates rise" crowd). People like Bill Gross didn't get to where he is today by challenging the fed and calling it's chairman the Chairsatan. Much too orchestrated for my liking.
The single largest bond investor on the planet has ZERO exposure to US Treasuries right now. Instead, he’s sitting on record amounts of cash.
Uhhhh, I know I am far from the brightest bulb, but how is this any different?.
He thinks the Treasuries are shite, and so he holds MAD money.
Duh?.someone more intelligent than me, pls explain.
I would want NEITHER.
He's a deflationist.
Crash baby, crash!!!!
Who cares? Let it die already.
"As you can see, we are about to break the trendline that has supported Treasuries for more than 20 years".
We were "about to break" the trendline 5 or 6 other times since 1988. Sideways in the market since 1988 more or less. Bring it on, lets see it do more than threaten to break.
for fucks sake PCR! why must you continue to punt the same bullshit over and over again?
it seems to work for Reg and MHFT.
They only talk their book,nothing more.
theyve been short for so long, how are they still in biz?