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Exclusive: Bill Gross Dumps All Treasuries, Brings Total "Government Related" Holdings To Zero, Flees To Cash - No QE3?
And many thought Bill Gross was only posturing when he said he is getting the hell out of dodge. Based on still to be publicly reported data by Pimco's flagship Total Return Fund, the world's largest bond fund, in the month of January, has taken its bond holdings to zero (and -14% on a Duration Weighted Exposure basis). The offset, not surprisingly, is cash. After sporting $28.6 billion in "government related" securities, TRF dropped to $0.0, while its cash holdings surged from $11.9 billion to a whopping $54.5 billion (based on total TRF holdings of $236.9 billion as of February 28). This is the most cash the flagship fund has ever held, and the lowest amount in Treasury holdings since January 2009 before it was made clear that the Fed was going to adjust QE1 to include Treasurys in addition to Mortgage Backed Securities. PIMCO's Treasury holdings peaked in June 2010 at $147.4 billion and have declined consistently ever since. And while we expected that the spike in MBS holdings (at times on margin) was indicative of an expectation that QE3 would monetize mortgage backed securities, the ongoing decline in that asset class now leads us to believe that Bill Gross is now convinced there will be no QE3 at all, at least based on his just putting his money where his monthly pen is! And if Bill Gross, the most connected person to the upcoming actions by the Fed, believes there is no more quantitative easing, it is really time to get the hell out of dodge in all security classes - bonds, and most certainly, equities.
Note the plunge in Treasury holdings in the chart below (blue line), offset by the surge in cash (dotted pink line). Time to panic.
And when it comes to duration adjusted holdings, something wierd is going on: PIMCO has increased its holdings of securities with a 0-1 duration to 14%, quite possibly the highest ever, and certainly the most to where our records go back. The effective duration on the entire portfolio dropped to 3.89, the lowest since December 2008.
Source:
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None whatsoever. Not an Intelligent Design subscriber, am perfectly aware of peak oil, own three four wheel drives, own several reloading manuals, and don't think I have ever watched a Nascar race unless I was drinking beer in a bar where one was on.
Yet somehow, I have managed to claw through the fog of my poor education and intentional ignorance to read an article on ZH.
Sunny is high on the smell of her own farts.
I know that feeling.
"don't think I have ever watched a Nascar race unless I was drinking beer in a bar where one was on."
Here's the reality check Colonel.... Now turn to your neighbors watching that race and start explaining amerikan monetary policy to them....see how far(ter) you get cowboy
You miss my point. Or I didn't express it well. Sunny is quick to ridicule Joe Sixpack as caught up in the left right paradigm, and implies she is OH SO above that. But everything she sees fit to deride would be considered conservative, "redneck", etc....
If I would have made a similar comment deriding "dirty hippies" protesting outside a state capitol, people who don't go to church, people who drive hybrid cars etc... would it have been any less intelligent?
Ignorance is rampant all across the political spectrum, and one who only wants to acknowledge one side of the coin is little better than those who don't even see the coin in the first place.
Cdad, precisely...none of the PHD's ever see it comin! But theyre right there with all the answers at the crash site though.
read a Nascar programme, who does that? ...pictures are quite enough thanks!
I'm not sure we do need to think deeper than a thin-base pizza as our subconscious and animal instincts are usually enough to get by through life. The world of academia and experts our modern world is rammed with is one of the most ignorant bunch of intellectual failure zones in society
Your average 'pictures only' Nascar hotdog muncher will survive this recession better than your average professional or professor i'm certain
+++. If TSHTF I would rather draw the name of any random Larry the Cable Guy fan to work through it with than have a database of "academics" to choose from.
of course they'll survive...someone's gotta keep building those pyramids...
did any pyramid/parasite system (Roman, Russian, British, Weimar, Venetian etc) in history survive the shit storm?
..check the history books, this is the 'End of Days' for democratic (monopoly) government and central (monopoly) bwanking and Fiat ...both systems have failed miserably and continuously, both are for the sewers of parasite history where they belong
And while we're at it we need to re-write the history books and call these failed systems what they are.. parasite empires and the failure thereof throughout Centuries of history.. only when we recognise it is parasites and their authority systems that are failing will we actually learn proper history and not this shite we are taught
See Spengler. Giant pyramids and great projects are an indication that the culture is at a particular moment in its development.
For fun, read _Cities in Flight_ by James Blish.
CW
Dog,
As the PHDs prattle on, the VIX is preparing to settle the score.
Per replies regarding how average Joe is cannot figure this stuff out, I say nonsense. While he may be late in his epiphany, the market will explain it to him shortly. And I am referring to the market for T bills. He will not be able to miss the signal.
The anger in the nation is already chronic and raging. And it grows every day that DC remains obtuse to the problem represented in it's budget.
i hear you regards public anger ....if the cycles are right and we face the worst Depression in 300 years that also equates to historic levels of human anger.
We also see historic levels of delusion and arrogance among The Parasite Club (elite). Govts both sides of the Atlantic are still spending like banshees 3 years into recession, no job losses to date amongst the public sector (their courtiers) and Govt debt levels are soaring. Meanwhile bailed out bankrupt bwankers are swimming in record bonuses (Blankfein $15m for running a bankrupt bank?).
Marie Antoinettes "let them eat cake" doesn't come close to the historical levels of delusion and arrogance patent in our generations out of touch Parasite Club.
So historic arrogance and historic anger should make for an 'historic Party' when it all kicks off and I'm talking French Revolution style parties in the street to watch the elite get their just deserts ......and they're so deluded the prats still think they're going to get away with it!!!
There is no doubt in my mind that social pendulum has swung farther than it has in a very long time and is at (or near) the apex of that swing. The reversal will be one of epic proportions and few countries/people will not be affected. The big questions I think we all are seeking is when and how does it go down. The misdirection is really something else these days.
Yes the ultimate shell game is being played... we can do nothing but ignore the white noise and prepare ourselves best we can to avoid the shit when it hits the fan
Regards "When?" the timing is everything. All i can say is between 2012 and 2014 some $17 Trillion in credit (debt) needs to be replenished worldwide with only $12 Trillion in available credit (even if it all wants to chase that debt load!).
So you can bet your boots by end of 2014 there'll be best case a 30% collapse in economies worldwide, likely worse, and likely before we get to '14
Well, this is just such a time. Timed to perfection.
From March 22nd, it's generally downhill. Fast.
Something big will happen to tip things over and it will be in Libya.
ORI
http://aadivaahan.wordpress.com/2011/03/09/axis-of-evil-doing/
Or maybe the moons closest perigee since 1993, plus king tide, plus full moon probably equals 8.0+ earthquake somewhere. Not to mention sunspot 1164 is massive and emitting. All timed around march 19-22. See Ken Ring. www.predictweather.com
Hmmmm..... quite a punch packer eh, Cossack? will check the link.
ORI
Beware The Day Of Purim 19th-20th March 2011
It's humanity versus them.
Maybe Gross sees a buying opportunity at much lower prices.
"After sporting $28.6 billion in "government related" securities, TRF dropped to $0.0, while its cash holdings surged from $11.9 billion to a whopping $54.5 billio."
So..........If Billy sold all his g-bonds who was stupid enough to buy them (back)?? Timma?? Bennie??
Correct me if I'm wrong, but that second 'weird' chart is (slightly) more evidence that PIMCO is expecting the long end of all yield curves to weaken etc.
Maybe he bought a bunch of long-dated Zeroes for cheap, as a Hedge.
This, too, is bullish, nyet?
Is it time to short the market? When will the plunge began?
To be long anything except tangible after MArch 18th-19th would be foolish.
After that, think double diamond downhill.
ORI
http://aadivaahan.wordpress.com/2011/03/09/axis-of-evil-doing/
"When will the plunge began?"
... 2002 http://pricedingold.com/us-disposable-income/
rhut rho! Looks like the insiders are getting nervous. I new something was up when yesterday, Yahoos headline story from AP about the little guy was getting back into the market
I think the little guy was me!
So he is going to lend it to them at 0% instead? For how long? I think Bill has been out of the loop ever since he flapped his gums about insider info on bubblevision.
Sheeple, Bill Gross is a moron. He was massively long treasuries at the low in yield and now owns none at yields 1.5% higher. He only has one direction to go. That is to buy treasuries. LMFAO!!!
Or buy the treasuries China is about to dump onto the market.
have to disagree with you here, yields are now well below the historical average, now is the time to sell or short, don't matter if qe3 yes or no, yields will go up, and buying high to sell low isn't the way; so Bill sells on high price, low yield; no brainer. Remember; this kind of investor never holds the 10year treasury for 10 years! As Tyler has pointed out, the 5+Trillion needed for US and EURO debt is coming fast and furious, and to cough up this kind of cash, our owners, ie the bond holders/raiders will insist on more profit.
remember this too; biggest owners of FRBNY; city, jp morgan, wells fargo; chase
considering his recent comments, and now this, maybe mister gross is living up to his fiduciary duties. is that possible?
Gross forcing the fed to put up or shut up. As the market dives, QE3, 4, 5, and 6 will be assured.
you do understand what "net cash and equivalents" means?
you do understand what "mbs" means?
gross is the fed. he is shuffling the deck chairs aboard Titanic.
Bloomberg radio this AM has featured a parade of analysts who "called" the bottom this time two years ago - Bob Doll of Blackrock quietly gloating
Has anyone seen Rosie?
Bill Gross dumps treasuries and powers up Grosss Korner. Winning.
I bet he dumped the bonds before the announcement of OE2 because after that USTs is a no win trade independent of more QE;
1- if there is more QE: USTs would selloff more sharply than they did after QE2 announcement, as bond vigilantes will kick the can back to the Bernank
2- if FED stops QE: USTSs would selloff sharply as the mega bidder will be out in the ponzi trade
Period.
Interesting thought.
buy the rumor
sell the news
rinse
repeat
Icahn liquidating is just another "canary".
I agree with Icahn and Pimco...to me its no longer a Canary....its a bigger bird than that....Gold and silver boys and girls...and not the ETF´s....the real stuff...this is coming faster than we want and think...if Saudia Arabia blows up its over..imho....
that was to avoid scrutiny, hedge funds have new regulations, but if your fund has no investors, wallllaaaa, no regulations; should read "how crooks get away with crime"
Well done Tyler. It will be a good hour before Bloomy and Co. figure out how to spin this.
No more QE it's become to hot an issue..as elections season approaches. Bernank will go down the tubes with QE.
Last time I checked, Bernanke wasn't elected.
Just how does one fire a (dis)appointment that supposedly is NOT a Govt employee??
+1 There is also the small fact that it has been a miserable failure.
Sunshine is a great disinfectant.
March (starting from 11th) could be a game-changer:
1. Vastly increasing energy influx from the center of our galaxy;
2. CFTC position limits on 28th. JP Morgan Blythe Masters are already peeing their pants. Ya got to follow Bix Weir on this stuff :-)
Blythe is so concerned about position limits being introduced and enforced, that she added another 6,000 contracts to JPM's short position last week.
The CFTC will do nothing to interfere with JPM's activities in the metals markets.
agreed, +++
Maybe he is all cash in order to BTFD
Of course he is. TFD will be more like TFBlastCrater though.
Is it insider information, or are the PTB positioning themselves in a big game of chicken?
When it comes to bonds, just about everyone at ZH sounds like Merrill, UBS, Morgan, etc.
I never look what Bill Gross buys or sells, I dont care. Nobody should.
If he got some brain he should have bought Gold or Silver.
Yes, a man and a company with NO savvy whatsoever has become the world's largest bond fund using the blind squirrel technique. Like him or loathe him, there's no lack of thought in PIMCO's moves. Privvy to information not all have, certainly, but neither stupid, nor blind luck.
If he got some brain he should have bought Gold or Silver.
That's an savy perpective.
Just how much luck do you think he would have getting $147 BILLION of Phy. Au/Ag Delivered?
That's it, he got to manage the largest bond fund in the world by not having some brains...
Yes it may not be easy to get the metal delivered at these price levels, since these are imaginery paper gold and silver prices but you can push the price up and buy at any price, then you get your metal, metal prices skyrocket, thats not what Fed and banking cartel wants.
He is doing what he was told to do.
Pimco is controlled by the banking cartel from day one, they are not allowed to buy metals and they have to convince their customers to buy bonds, yes they make money by getting tips from the fed and this doesn't require any brain activity.
He's still heavily long MBS. I still think this was done on the assumption of put backs, but the Fed and Treasury are trying to weasel out with a half-assed settlement, which is going to make a mockery of the law and capitalist system.
Is this PIMCOs attempt to push for a better outcome?
correct me if I'm wrong but my interpretation of the chart above (red line) was that he bought up MBS on the expectation of QE3 and has since reversed that trend, and quickly.
so Bill is betting on dollar to strenghten...and I think he may be about to make some money. The only question is what is going to happen in middle east, if that is the oily black swan coming to roost on bernankes head...time to leverage down.
Being liquid is not indicative of a dollar bet.
It is my opinion only. Holding cash means he believes that the fiat currencies with dollar as a top dog are going to keep their value. Or am I wrong?
He is so close to going into gold. It is the natural next step.
Only if China leaves him some table scraps. I think China has more than $54 billion.
Certainly he believes US interest rates will rise short and mid term, so is preserving capital. "Cash" does not indicate his hedging based on inflation risk, though. So, we do not know if he has engaged derivatives to protect his cash ASSets (do we know in what currencies he's got these?).
Possibly he sees longer range uncertainty on his part since he has not shifted into other bonds. Has he shorted bonds?? Bought a 90,000 acre cattle ranch in Bolivia? Silver/Gold?
Who cares! I suppose that when you see a nuke counting down, you just run as far and fast as you can.
Only thing that comes to mind is a song.....
http://www.youtube.com/watch?v=Adgx9wt63NY
Whats that electrical odor? Smells like HFT.
I am a slow person so someone please help me understand
if there is no QE3, then long end treasury should have rooms to go up, correct? then why he is full of cash? Why not just long some bond futures?
I'm no expert but...
I suspect no QE 3 portends interest Fed rate hikes (ala Trichet) with decrease in bond values.
Also, loss of liquidity pump portends higher value for USD, like turning on the deflation button again...
And Gross has been signaling the Fed is a Ponzi and he doesn't think UST are a good bet, regardless.
But if PIMCO and sovereigns don't buy UST, and Fed doesn't do QE --- then who?
Corrections anyone?
If the Fed is not buying treasuries, who will?
I'll offer $1.23 for every $1,000.000.000.00 bond you wish to sell. Framed, they make wonderful Xmas gifts.
Excellent idea, cossack! Good luck with your new venture.
Depends on how the ECB responds to market pressure relative to peripheral country bond yields. The USD/EUR action will tell the real story.
If Bill G sees an end to QE coming he would sell his current stock of treasuries, avoid the huge losses, and buy back in when interest rates on treasuries are Waaaay up... like well into double digits.
Sitting in cash that has daily decline in purchasing power is a loser so he won't be in cash for long.
Here is a great rumor to feed the bobble heads on msm... 'Bill G buys $54 Billion of paper gold/silver and declares he will stand for physical delivery'...
No way, if the stock market tanks then Treasuries will go to the moon on the flight to quality.
A tanking Stock Market spells DEFLATION and that's good for bonds.
US bonds are a risk asset now, not quality.
Nothing we have to offer the world as far as SAFTEY exists any longer.
Flight to Hell if anyone is still stupid enough to invest in T's, and Bonds.OR for sure FRN's.
We have a Trifecta disaster...............who wants any of that shit?
LOL, that would put a hornets nest into Blythe's pants. Ultimate end to the shorts!
Does anyone around here understand how bond funds work? PIMCO Total Return is not a hedge fund. Gross can't wake up one day and buy gold just because he doesn't like UST bonds.
i want to see you managing at least 100mil $,lets see how smart would you?!just learn from smart guys to get out in time,most big boys with 100bln$ in managed money is out of stocks since 2010 april
HOLD FAST
It's difficult to reconcile the assumption that QE will end with the fact that TRF's largest holding is mortgage securities. Isn't most of this Fannie and Freddie crap that'll have to be backstopped by more money conjuring?
Maybe the Fed will stop POMO operations in equities and restart the big time MBS purchases from GSEs?
Aim the fire hose in another direction for a while iows.
Small sample size alert, but...
I've noticed that whenever the market declines lately, gold and silver increase along with...........bonds. Treasuries, corporates, and munis all up this morning, for example.
Be contrarian.
I simply refuse to believe they will allow a manufactured crash before the election. Would argue it was part of the deal when Obama renominated Benny for Fed Chair.
Excellent point.
I don't see it working in that direction. Obama renominated Ben because that is what he was told to do. You don't get to the position of president by rocking boats and not following orders.
@trillion
Obama needs a crash to get reelected. The current inflationary environment (stagflation) is killing his poll numbers. If the Fed crashed the markets and triggers a sell-off in commodities, we get a shot of deflation, consumer prices and interest rates decline, and China goes in the crapper.
Ugly stuff for sure, but that sets the stage for Obama to don his Superman cape and come to our rescue. Presidents always benefit from a national crisis, and this one will give Obama the opportunity to nationalize huge parts of the economy, banks, airlines, etc.
If he plays his hand well, Mr. O could emerge as FDR II.
Your president had his 'national crisis' moment two years ago. He couldn't get the cape on then and if he does now no one will believe him anyway. Bush was bad. The new guy is worse.
I really don't like the look of this 'trend.'
agree! First create a problem and then come up with the solution.
Ordo ab chao boyz!
If he plays his hand well, Mr. O could emerge as FDR II.
What the 2nd worst fascist POTUS ever.(FDR/Wilson/Owhama) a bane on society.
Just stop and think for one second.
THIS man who is the PUNKUS,has no experience at anything, ever,and we are lip deep in shit.Crack, Islam, and Progressivism.
Just what the Dr. ordered.
I agree w/you though, American sheeples are like little kids, if we have a problem, they hate like hell to change horses.
Even if the one they keep, is the horse that got em where they are,such short memories.
Why doesn't he buy Gold? He's holding cash that he knows will lose value because of inflation, it makes no sense.
Bill Gross is a strange dude.
As for the Stock Market tanking, he wouldn't pull his money out of Bonds. If the stock stock market tanks then Bonds will go through the roof.
He must really believe in inflation, he'd probably buy stocks if he didn't run a Bond fund. The only question is why he isn't going into Gold.
Speak Up Bill, what's your motivation?
A man like Bill Cross, everytime he makes a play that the market sees as significant, has NOT ONE option up his sleeve but THREE. Ask yourself what plan B and plan C are. Then you'll see the scope of options he is reviewing. I think two options are linked to ME unwinding one way or the other. Libya comes back fast and KSA holds strong and oil plummets down (plan B). Libya explodes oil wells, ME racks up into tighter supply, KSA under pressure, is plan C. Plan A being QE linked. Voila, now you have the two main issues on the market : QE or not to QE; Oil spike bunga-bunga or oil spike fizzle out. I think you want to be a little liquid until all this plays out... nobody not even Obama knows where this is heading as Q, the arab street, have still some say in the oil scenario play-out.
Im with you but people need to stop putting 100 dollar oil down to purely ME tension. it was trending up before this all got stirred up and after any retrace it will continue back on its merry upward trajectory to that magic apex moment. unless money supply tightens...
This outcome was discussed a few weeks back:
http://seekingalpha.com/article/251064-pimco-s-battle-call-to-bond-vigilantes
Bill Gross is the herd, and probably a contrary indicator. Reread the Barron's roundtable from about 2007 where he ridiculed gold as an investement(it was well below $850.) Oh, and lets not forget that brilliant call he made to go long General Motors bonds in 2007 when they were 10%. How'd that one work out, Bill? Bill can beat an index(barely), but his best days are behind him. He earned his reputation in a bull market - never confuse braisn with a bull market.
Assuming Bill Gross was thinking inflation is at hand a month ago: speculation. Assuming Gaddafi, Mubarak or Bush may need cash from the fund: probable.
STFD
LooK ouT BeLoW
Ritholtz just came out and predicted a significant reversal of prescious metals (among every thing else) if QE3 is abandoned.
I presume his logic is the dollar will rise therefore commodities (all of them) will fall.
I have a difficult time with that assessment because I view Gold and Silver as world currencies, not just prescious metals.
Anybody have thoughts on this? Will Gold crash along with everything else?
No.
Take delivery
The Chinese and Mid Easterners are not going to stop buying PMs because Ben stops printing... and, they are the ones buoying the PM markets.
Ritholtz = talking his book
Good point.
So is gross talking his book also ..... ?
It may dip it certainly wont crash. Gold =money. Money gets more valuable in deflation. Gold is going to continue kicking the Dows ass for a few more years until the market is "allowed" to price assets correctly.
I would think that cash will go into metals and commodities. Imagine what that would do for the metals if even a 1/4 of it was invested into them.
I think his fund charters have to allow for investment in metals. My guess is that a lot of funds might not allow that, or at least allow for more than just a token percentage.
OK, can someone explain this to me:
What exact asset is that $54.5B in "cash." Is it greenbacks sitting in a vault? Is it bank deposits, and with what banks? What is it?
If it's bank deposits, he replaced bond risk with credit risk on those banks. How is this better? Especially if they are TBTF banks that are just propped up by the US Govt and FRB anyway?
If it's physical cash - uh, seriously? Zero interest bearing with theft risk?
If it's foreign bank deposits, well he may have reduced credit risk by adding political risk and, possibly, currency risk (if non-USD deposits).
I'm guessing it's #1, bank deposits in US banks denominated in USD. But how is that really better than treasuries?
I would assume those funds are now in money market funds and bank deposits. So yes, you are correct that he replaced sovereign credit risk with bank credit risk. That point is very underrated.
He's going to lose no matter what he does. His fund charter restricts his investment strategies. I'm pretty sure he realizes this.
Exactly. he sounds like a man giving up to me. he doesnt need the money or the performance anymore but everyone has an ego and pride. his fund is fked either way.
Just think of all the toasters and steak knives he could get opening up 200,000 certificates of deposit around the nation.
Well he can be like Carl Icahn and just refund cash to the investors.
Would Bill Gross tell the world only a fraction of what he's really doing? Would anyone make a move based on ONLY that li'l tidbit he reveals?
Do chickens have lips?
Is there something really nasty, out back in the woodshed?
There is no way any Central Bank would voluntarily allow deflation. Bill could be wrong about his bets. IMO he probably made some money from the dropping rates in government bonds and made sure he could sell to the Fed when he got done, which obviously he's done. When rates go to zero, you get out. "CASH and Equivalents" is meaningless, IMO. Everyone is trapped in a burning theater. Does it matter if you're in a front row seat or mid-section when the bodies start piling up at the exits? Nope. Your doomed.
http://www.youtube.com/watch?v=dzm8kTIj_0M
dont not try to put out the fire, that would be impossible.. only try to realize the truth, there is no fire...
Some reading for you. Most of ZHers should be aware of the following...
"The reservoirs where the inflationary potential has been stored are those we have already described. Money velocity which has lagged behind its natural level throughout the incipient inflation may suddenly multiply itself many times over as holders dump their money. Prices of desirable things rise accordingly. Government debt which for long has immobilized some of the inflated money now is deserted by existing money and turns into money itself. Fractional-reserve banking turns the new money into multiples of additional money. Money which has been engaged in servicing the enormous money wealth now deserts the money wealth and seeks real assets instead. Even the money which has been occupied in markets for real investments such as industrial stocks may lose heart in the face of falling profits and hard times, and come forth in search of surer value. Even the money which has been occupied in buying and selling goods and services, many of them useless, deserts them in favor of essentials like food and land. In a collapsing inflation, people’s powers of discrimination between real values and spurious values become suddenly acute, and the apparent supply of saleable real values falls. Foreign holders of the money take fright too, and their money elbows its way into the markets and reverses any balance of payments deficit. Finally, the government finds itself deprived of its inflationary tax while its regular taxes yield little, and it resorts to still more money inflation as a means of finance. In so doing, the pathetic government trails far in the dust of the fleeing citizenry."
Source: http://www.delanion.com/main/dom.htm
P.S. Thanks TD, I didn't finish reading the book yet but find it very instructive (should have interested myself to Keynes far earlier...)
" Government debt which for long has immobilized some of the inflated money now is deserted by existing money and turns into money itself."
found myself thinking of the Permafrost there for a second...
"the pathetic government trails far in the dust of the fleeing citizenry"
the man could write...
Watch the head fake - Gross is classic in his use of this type of info to go the OTHER WAY
I agree ,when he is on CNBC they all agree with him. When Peter Schiff is on they think he's in another galaxy.
The Fed has a great history of creating market panics and then intervening to "save the day". What better way for Bernanke to get politicians to beg him to implement QE3,than create a stockmarket crash amid stories of a deflationary depression,he then gets his buddies at GS/JPM profits on the short side and then buy everything up on the cheap just before he announces QE3,whilst at the same time making the Fed look the good guys and blaming the politicians when it all turns to shit down the road.As old Charlie would say -winning.
There will be QE3 eventually.
However wouldn't it make sense to have a nasty little deflationary shock, drive down the prices of oil, gold, silver, etc, eliminate all critics of the Fed, have everyone else beg on their knees for more QE?
Yeah, I thought of that same thing. Would be a perfect reason to " come to the markets rescue " by implementing QE3.
all of the bad press.. about QE InfiniTimmy.. means they will turn off the water / money.. and watch the markets burn.. before riding in to save the day! as mentioned above.. 1 trillion lbs of Silver and Gold (the non-rusting kind) for You Good Sir.
Uncertainty and high stakes, do you feel lucky, or is it time to get out of the game for awhile? Pimco is part of the establishment. This could be a head fake to sow uncertainty. Some shockwave change is coming, but nobody knows what or when. Could be years, Could be 3:45 PM EST. What is your sit-out position? Canadian dollars?
physical Gold, Silver and Platinum.
If fiat then CHF and NOK
repost
Each QE is just another form of a garage sale.
At some point every big bank will have a meeting and say; 'I was up in my attic and found an old steamer trunk filled with old women's clothes. Help me bring it downstairs and we'll sell it this weekend.' Rinse. Repeat.
Gross is just the poster boy for the banks who now simply threaten to not buy treasuries at their current yields. They want more interest after the Fed is the only buyer, they will get it. After June, QE 2 will 'stop' all hell will break loose for a week and treasuries will move upward in a panic. They need the market to correct 20% in order to lock in all those profits. Unless there is a gentleman's agreement for a QE3 - "Open POMO" That seems more likely. It has worked so well already.
With all that cash, Gross will eventually suffer from performance anxiety, and he will have no choice but to start using that huge cash horde to start chasing whatever is going up.
Probably stocks.
And by the way, Mark Hulbert says this has been the most powerful bull market in history.
As he describes it, "A Bull On Steriods"
http://www.marketwatch.com/story/how-bull-market-stacks-up-against-history-2011-03-09
Like I said, I'm ready to go either direction, we'll have to see which way this breaks:
IBM up big this morning. do they have a deal with facebook or something?
No. FEMA camps are gearing up. /Sarc
Nice article, notice how the only two bull runs that went further faster ended so well: 1920s and 1990s.
lots of posturing to come on ending qe.
it won't end. may suspend it awhile to manage desired effects but there will be continued qe sooner than later. it's all about the ptb positioning themselves accordingly to profit.
most of us are on edge, leveraged, and out there living bare assed. a 'suspension' of QE means a market collapse and the ensuing fear of lost gains will exacerbate the drop.
I agree that they will hold on the QE3 in June; while reserving all their rights to reinitiate it.
This means panic selling. It also means Ben and co. laughing their fucking asses off as they watch the rats scramble on the titanic.
maybe he is selling in advance of the markets response to the news that qe will end - allowing yields to rise
then he will buy when yields rise
then as we enter the next election cycle ben will be forced to resume qe - and bill can sell again if needed
wonder what he will do with the cash in the meantime - it would be cool if he put it into pm
"wonder what he will do with the cash in the meantime - it would be cool if he put it into pm"
It would be cool but Bill would be hung out to dry... out of the loop... no more insider info... no more job... or worse.
We won't have to wait long...
The measily returns he is passing up in going to zero will be more than made up with the given collapse we are facing... not long to wait.
"wonder what he will do with the cash in the meantime - it would be cool if he put it into pm"
It would be cooler if he started stuffing his front run billions up his own ass
Greek, Portugese, Italian and Spanish bonds all hiking up. Maybe the whole bond game is finally becoming an obvious sham.
And TIPS that is the funniest funny money scam ever. Yes buy your inflation protection so that when your money is worth next to nothing we'll give you 10x nothing to satisfy you.
think tax scam.. and you will be right there.
We all know QE3 cannot happen because of commodity prices and the level the dollar is at currently. It's destroying other nations. We all know QE3 must happen because it is all that is keeping markets and more importantly banks making "profits". This is the corner we discussed. I have to tell you this is going to be the greatest reality show of all time this coming year.
And don't forget the Fed rate must remain low to keep markets liquid but it must be raised to prevent inflation; but if it's kept low it will continue to inflate bubbles yet if it rises loans will screech to a halt and the housing market will be pressured even more in a time when it's dire that it grows.
Either way in 15 minutes The Bernank will confidently have this 100% fixed.
Agree, JM. But there's another key question: interest on government debt outstanding is over $400 Billion. The corner the Fed has painted themselves into makes it such that any significant uptick in rates will just ignite a vicious cycle requiring ever more issuance. And with real interests rates now negative, that's sure to happen. My guess is they need to posture to keep the myth alive that they can pay the debt down significantly without a default event (such as dollar debauchery and inflation).
Duplicate
Quite right Mr. McCloy. For me it is only a question of to which direction the rabied, syphilitic rat will lunge.
My bet is a headfake, then towards the trap marked INFLATE OR DIE.
I think the commods are topping out here, Libya is pricing in for the moment and we start down in that area. The Fed must address this crude oil situation, right soon.
The US and its Treasury bonds have both enjoyed worldwide respect for strength for a long time. For the most part this has been based on a broad, deep, general perception that America is a strong country that can back its word with real cash and productivity. Once this goes, or once it went, the USD is no longer a safe haven in a crazy world.
The US and its Treasury bonds have both enjoyed worldwide respect for strength for a long time. For the most part this has been based on a broad, deep, general perception that America is a strong country that can back its word with real cash and productivity. Once this goes, or once it went, the USD is no longer a safe haven in a crazy world.
No way Gross will put any substantial sums into PM's. If he dared to do so, the U.S. Navy would send over a destroyer to Newport Beach and threaten to pummel his house on "Drawbridge Island" with the latest rail gun weaponry.
LOL....
Land slides don't always start with big stones but grains of sand. When he buys even a small amount others will follow.
I like you man, despite all those junks, you are real trader. Poor Gross runing out of options when legend of USD disappears. PM's are out of question, the only option for him is to buy the whole toilette paper industry (big return short to mid term, before we switch to grass or leafs).