Pimco Cuts Half Its Gold Exposure, Says US AAA Rating Could See A "Lot Of Stress" Within 3 Years

Tyler Durden's picture

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 06/15/2010 - 11:30 | 414623 LoneStarHog
LoneStarHog's picture

First, I had no idea that PimpCo had anything to do with gold...

Second, this headline makes no sense to me...

Third, F**K PimpCo!

Tue, 06/15/2010 - 11:32 | 414624 schoolsout
schoolsout's picture

Makes no sense to me, either.

USA credit rating drops and they are ditching gold?


edit....captcha  -22 minus ___ = -77

answer would be 55, correct?  Not according to CAPTCHA

Tue, 06/15/2010 - 11:34 | 414630 MsCreant
MsCreant's picture

Glad ya'll said something because I clicked over here to see if a comment might clue me in as to what is supposed to be apparent to others.

Edit: You needed the negative sign on 55.

Tue, 06/15/2010 - 11:38 | 414645 mdwagner
mdwagner's picture

-22 - (-55) = +33, not -77

Tue, 06/15/2010 - 11:42 | 414662 LoneStarHog
LoneStarHog's picture

Only at ZeroHedge does traditional mathematics remain valid...

Tue, 06/15/2010 - 11:53 | 414704 breezer1
breezer1's picture

i was in an alaskan town once where half the population were prostitutes. the other half was the cook. so he sold half an oz. the headline was worth the loss.

Tue, 06/15/2010 - 12:46 | 414883 Slash
Slash's picture

naw this makes sense. As we saw in 2008, when shit starts rolling over, leveraged positions will once again have to be liquidated, driving gold and commodities down and dollar up. I don't think gold will start rising substantially again until Benron's response to the crash begins....QE 2.0 and god know what other inflationary measures he would take.

Tue, 06/15/2010 - 11:38 | 414648 schoolsout
schoolsout's picture

I don't think that is correct...


a minus -55 would be a plus 55



Tue, 06/15/2010 - 11:42 | 414659 MsCreant
MsCreant's picture

That's funny. You were both very polite about that! Sorry for butting in.

Tue, 06/15/2010 - 11:43 | 414667 chumbawamba
chumbawamba's picture

The Captcha here has never worked right.  I only get it after I first login.  If it fails  I just keep hitting the submit button until it goes away, which it should after the first or second time after logging in.

But anyway, yeah, this is about as stupid a move as you can make.

Let's see, the country that backs the global fiat currency is about to implode, so let's sell all our gold!

I am Chumbawamba.

Tue, 06/15/2010 - 11:53 | 414706 Hulk
Hulk's picture

Same here, hitting submit a second time always works. Just goes to show that persistence pays

Tue, 06/15/2010 - 14:02 | 415039 DoChenRollingBearing
DoChenRollingBearing's picture

Chumba & Hulk, two of my favorites.

When the Captcha asks for a minus answer that is two digits, it comes back with an error, but still posts my reply.

Tue, 06/15/2010 - 14:11 | 415072 mrgneiss
mrgneiss's picture

My CAPTCHA went away for a month after I donated to ZH...........but I'm sure it was just a coincidence......

Tue, 06/15/2010 - 15:45 | 415321 ColonelCooper
ColonelCooper's picture

And here you were, teaching algebra just last night.

Tue, 06/15/2010 - 12:19 | 414794 Bananamerican
Bananamerican's picture

What's the opposite of "talk your book"?

"Goldman your book"??

Some say Gold is an inflation hedge, some say a deflation (or uncertainty) hedge.

Some say Pimpco and Goldman are WHORES so why listen to ANYTHING they say?

Tue, 06/15/2010 - 12:27 | 414817 DosZap
DosZap's picture


And I thought it was me.....LOL

Tue, 06/15/2010 - 15:03 | 415219 RonnieHonduras
RonnieHonduras's picture

Maybe they know the U.S. government plans on taxing all gold profits at 75%.  After all, those who have more loyalty to gold are really economic terrorists, are they not?

Tue, 06/15/2010 - 13:10 | 414936 Calculated_Risk
Calculated_Risk's picture

-22 minus ___ = -77

-22 -X = -77

-X = -77 +22

-X = -55

X = -55/-1

X= 55


Tue, 06/15/2010 - 11:43 | 414669 seventree
seventree's picture

Get with it folks, captcha has switched to "new math" (described in BLS textbook)

Tue, 06/15/2010 - 11:50 | 414693 schoolsout
schoolsout's picture

That makes sense...

ZH needs to come out with an "Obamulator" where, no matter the inputs, the output is always wrong.  (Doesn't necessarily need to be Obama related, as our problems go back further than the Messiah, but you get the drift)


Who's with me?

Tue, 06/15/2010 - 11:56 | 414711 seventree
seventree's picture

Whether results are 'wrong' is subjective -- for the gov't results are what they need to be.

Tue, 06/15/2010 - 12:00 | 414732 schoolsout
schoolsout's picture

That's kind of my point...that math isn't the math it used to be.

Tue, 06/15/2010 - 12:06 | 414753 seventree
seventree's picture

- (-100)

Tue, 06/15/2010 - 12:16 | 414782 schoolsout
schoolsout's picture

That gave me a good chortle

Tue, 06/15/2010 - 15:47 | 415327 ColonelCooper
ColonelCooper's picture

Actually, if we had Obama math, wouldn't any answer always be right?  Being wrong is hard on self esteem, and we should ALL be winners in our new Hopey-Changey America.

Tue, 06/15/2010 - 12:24 | 414808 BumpSkool
BumpSkool's picture

You bet schools out ... been out for along time eh?

Tue, 06/15/2010 - 12:36 | 414845 schoolsout
schoolsout's picture


Tue, 06/15/2010 - 12:32 | 414837 HCSKnight
HCSKnight's picture

Just remember that little fact when you read ZH.  I love the site, but it says something when such an obvious "little" factual detail is .... ignored.

And dont forgeet, the IP is located in Sweden....




Tue, 06/15/2010 - 13:37 | 414969 taraxias
taraxias's picture

I think what they meant to say is that they are ditching SHORTING gold.

Tue, 06/15/2010 - 11:33 | 414629 Turd Ferguson
Turd Ferguson's picture

Ditto, here.

AAA rating is going away so SELL GOLD. That makes sense.

Tue, 06/15/2010 - 11:37 | 414642 luigi
luigi's picture

Maybe they are selling gold to sustain the dollar, otherwise the stress on the rating would come much sooner than within three years? :o)

No seriously: I can't understand either, AAA away "therefore" sell gold... ??

Anyway I expect "tension" on the triple A to come much sooner than later...

Just my 2cents.

Tue, 06/15/2010 - 11:42 | 414664 Hansel
Hansel's picture

They probably sold GLD so they can move into actual gold within 3 years... or something.

Tue, 06/15/2010 - 11:56 | 414694 ZerOhead
ZerOhead's picture


They bought two gold eagles last week and sold one this week. That way the can protect their remaining bond exposure with a cheap deflationist message to the markets... BTW... aren't they half in cash already or something?

Tue, 06/15/2010 - 11:38 | 414644 Mad Max
Mad Max's picture

It makes sense if you're the Fed's handmaiden.

It might also make sense if you fundamentally have deep and abiding faith in fiatscos, believe that hyperinflation is a zero possibility, and therefore think that 8-10% interest rates on fiatscos will outperform gold price appreciation.

Tue, 06/15/2010 - 11:40 | 414656 EscapeKey
EscapeKey's picture

That's sort of ignoring secondary consequences, though. If the interest rate heads for 8-10%, either it would be caused by large scale inflation, or it would cause a virtual collapse (who can afford 8-10% interest rates, if your wages don't appreciate by this amount as well?)


Tue, 06/15/2010 - 14:26 | 415110 MachoMan
MachoMan's picture

As documented here many times, at those rates, the service charges on our debt would be insurmountable.  We would be posed with the decision to fish or cut bait.

Tue, 06/15/2010 - 11:48 | 414687 luigi
luigi's picture

But then I must wonder if the handmaiden chicago-girl won her degree in a bingo-hall.

If interest rates are that high with this unemployment and prices start discounting these rates, economics will be your last problems since you'll have to recall all expeditionary forces to confront internal uprisings (provided you have still enough ressources to bring them back)...

By the way: something against people driving fiats? :oD

Tue, 06/15/2010 - 12:41 | 414868 tmosley
tmosley's picture

I can only parse their logic by assuming they meant sell GLD rather than gold.

Tue, 06/15/2010 - 11:37 | 414641 yabs
yabs's picture

don't get it surely thats good for gold

Tue, 06/15/2010 - 11:39 | 414650 AnAnonymous
AnAnonymous's picture

That is a nice teaser.

Will full text, all your questions are going to be answered.

Keep hitting F5!

Tue, 06/15/2010 - 11:41 | 414653 jkruffin
jkruffin's picture

28 day auction ugly as expected, high rate .03%,  and the median was at or below .01%


EEEEWWWWWWW!!!!!!!!!!!!!!!!  In less than 2 wks , drops from .157% to .03%



Tue, 06/15/2010 - 11:45 | 414677 Turd Ferguson
Turd Ferguson's picture

YES! I was just looking at this.

1 fucking basis point for a 28-day bill? Certainly looks like there is more than a little scared money out there.

Tue, 06/15/2010 - 11:59 | 414723 jkruffin
jkruffin's picture

Indeed,  I have some 28 days coming due for automatic re-up that I got at .157 two weeks ago,and I just logged in to TD and canceled those re-ups, until something gives.  No way I am buying those dead horses. I will just leave it in C of I for now until the longer term yields get back up.  Not worth playing crooked stocks or treasuries at this point.  Both are being manipulated to the stars.  Pretty soon we will have to pay Timmy to lend him money.  WTF? 

Tue, 06/15/2010 - 11:40 | 414654 hedgeless_horseman
hedgeless_horseman's picture

Contradictions do not exist.  Check your premises, as one of them is wrong.  -JG

Tue, 06/15/2010 - 11:41 | 414657 unwashedmass
unwashedmass's picture


the "trillions" in precious metals in afghanistan story fizzled yesterday....so today, PIMCO -- who IS the handmaiden of the Fed, and has never been known to BE a major gold player but again, Ben relies on the ignorance of the peasantry -- PIMCO says its cutting its gold exposures.

so terrifying that i see gold is now rising.

Tue, 06/15/2010 - 11:43 | 414668 EscapeKey
EscapeKey's picture

Yeah, despite this ridiculous rally going on, gold spot prices are only down 2% from their highs, and even up today.

Tue, 06/15/2010 - 11:47 | 414683 Turd Ferguson
Turd Ferguson's picture

Yes but keep in mind that $1250 will be defended at all costs. A strong move through there and it begins to really get away from them. 

Tue, 06/15/2010 - 11:52 | 414702 EscapeKey
EscapeKey's picture

I wonder what JPM's short position would cost them if gold went to $1,300


Tue, 06/15/2010 - 11:56 | 414713 Turd Ferguson
Turd Ferguson's picture

It will cost them everything when the world finally realizes that the ETF for which they are custodian is absolute bullshit and fake. They are the next BP.

Tue, 06/15/2010 - 12:24 | 414809 schoolsout
schoolsout's picture

Yea, but I definitely wouldn't mind that clusterf&^k when it happens.

Do NOT follow this link or you will be banned from the site!