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Pimco Cuts Half Its Gold Exposure, Says US AAA Rating Could See A "Lot Of Stress" Within 3 Years
Just headlines for now, but rather self-explanatory, or should we say self-contradictory.
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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!
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
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.
-22 - (-55) = +33, not -77
Only at ZeroHedge does traditional mathematics remain valid...
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.
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.
I don't think that is correct...
a minus -55 would be a plus 55
That's funny. You were both very polite about that! Sorry for butting in.
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.
Same here, hitting submit a second time always works. Just goes to show that persistence pays
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.
My CAPTCHA went away for a month after I donated to ZH...........but I'm sure it was just a coincidence......
And here you were, teaching algebra just last night.
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?
Chumb,
And I thought it was me.....LOL
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?
-22 minus ___ = -77
-22 -X = -77
-X = -77 +22
-X = -55
X = -55/-1
X= 55
Get with it folks, captcha has switched to "new math" (described in BLS textbook)
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?
Whether results are 'wrong' is subjective -- for the gov't results are what they need to be.
That's kind of my point...that math isn't the math it used to be.
- (-100)
That gave me a good chortle
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.
You bet schools out ... been out for along time eh?
?
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....
I think what they meant to say is that they are ditching SHORTING gold.
Ditto, here.
AAA rating is going away so SELL GOLD. That makes sense.
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.
They probably sold GLD so they can move into actual gold within 3 years... or something.
Update:
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?
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.
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?)
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.
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
I can only parse their logic by assuming they meant sell GLD rather than gold.
don't get it surely thats good for gold
That is a nice teaser.
Will full text, all your questions are going to be answered.
Keep hitting F5!
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%
http://www.treasurydirect.gov/instit/annceresult/press/preanre/2010/R_20...
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.
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?
Contradictions do not exist. Check your premises, as one of them is wrong. -JG
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.
Yeah, despite this ridiculous rally going on, gold spot prices are only down 2% from their highs, and even up today.
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.
I wonder what JPM's short position would cost them if gold went to $1,300
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.
Yea, but I definitely wouldn't mind that clusterf&^k when it happens.
ahhh Turdy, my man? Read the prospectus. If a custodian renegs on his "obligations" he's liable for zip... and so is the (now bust) ETF. That's what makes these such great products.
“The Custodian’s selected sub custodians may appoint further sub cus-
todians. These further sub custodians are not expected to have written
custody agreements with the Custodian’s sub custodians that selected
them. The lack of such written contracts could affect the recourse of the
Trust and the Custodian against any sub custodian in the event a sub
custodian does not use due care in the safekeeping of the Trust’s gold.
See “Risk Factors”—The ability of the Trustee or the Custodian to
take legal action against sub custodians may be limited...”
– SPDR (ticker:GLD) ETF prospectus ...
What's more - you'll find that most of custodians, as they fall into the LBMA, have a different country of jurisdiction than the ETF itself. I hope you're ready to wait for your day in court .... it may take the rest of your life.
A note: If JPM falls foul of the law... the law will be changed. No One, but No One - messes with JPM. They make GS look like little street punks in comparison. JPM, on the other hand IS the US Treasury, make no doubt about it..
What is going on at Pimpco? First elarien goes Austrian and now weird incongruous headlines.
They must've opened up one of those medicinal marijuana shops near Pimpco's offices.
I do have to disagree with the loss of AAA status. We already know it's toast (just look at those treasury auctions), but you just can't write that down on a piece of paper. Because the psycho, nuke-wielding, yes-we-torture govt doesn't want to have the charade go away. I think if the ratings agencies did (correctly) mark the US down to some B grade, they'd be in trouble faster than you can say "Is that Xe at the door?"
I dunno. If Pimco thought of gold as less price sensitive and more yield sensitive, then they may wish to hold onto their gold for longer.
The outlook for gold has to be that it will adjust its price to the 40-year inflation adjusted average, which in 2009 is calculated at $1673/oz. U.S. according to shadowstats.com.
Given the low yield environment for short term treasuries and any form of short term money, and the fact you can leverage up gold 100X without risk of failure, then banks and bond holders aught to be looking at gold very, very seriously.
If debt to GDP grows to 200% or more in all countries, then that inflation-adjusted average calculated in 2009 will obviously have to be adjusted that much higher. Throw into the mix a possible negative yields on either the repo or discount rate, you have Fekete-like price adjustment backwardation in the cards for gold.
http://stockcharts.com/h-sc/ui?s=$GOLD&p=M&b=5&g=0&id=p29560442230&a=182333562&listNum=2&listNum=2
http://www.golddrivers.com/chartsmember.aspx
Is it possible that Pimco is now expecting massive inflation, and the seizure of gold again by the gov???? It happened before, and you can expect Bernancompoop and Gutnher to screw anyone in their way.
Nah, I think they're just trying to talk gold down so the sheeple don't stampede the local coin shop. If Pimco owned gold, theirs wouldn't be the one getting confiscated. Only little schmucks who kept in their Fed member bank's safe deposit box.
I don't think the writer there even knows what "inflation" is.
http://www.huffingtonpost.com/2009/05/21/pimcos-gross-us-at-risk-o_n_206588.html
PIMCO said the same about AAA rating over a year ago.
ZeroStress. KING DOLLAR.
gold just broke 1231....adios JPM couldn't happen to nicer guys.
1235...
... if you think JPM is short Gold - you are misguided. They are very long.
gee....ya think gold might be breaking out cause the stock market is so fake now that ben has given the little people NO ALTERNATIVES?????????????????????????????????????
ya think? law of unintended consequences, bennie boy. You allow the low volume crap meltups and destroy the free market, the peasantry ain't as dumb as you need them to be.
+1
So what, they sold a Krugerrand?
It makes perfect sense.
Gold is about to be taken down because there is no inflation, but deflation.
QE2 will get kick started once the dead cat bounce is over.
Inflation will only start to be apparent afterwards, once the whole world realizes that USD is worth jackshit and liquidates US bonds.
I think the whole world is already aware of the fact that USD is worth what you say: it's just that you think twice before liquidating en masse bonds of a Country with such a large thermonuclear arsenal... the only big difference between Greece and the US, btw.
That might stop a big nation like China (though they are unlikely to be phased by such threats), individuals certainly don't think of such things when changing their asset allocations.
There is no inflation? Over what time period because as i see it over the past two years there is indeed quite a bit of inflations IN THE REAL WORLD (read: not the gov numbers). Many goods and services costs are going up to the tune of 15%+, with some far higher. The problem with gov numbers is how they are calculated and how the gov changes this calculation method to best suit their own goals of making everything look 'better than expected'.
This is a dog race that hasn't run yet. Folks are still placing bets. Right now, if you are the day trading type, there should be a massive unwind that sinks the price of most everything, and you have to decide if gold will be one of those things. The other contenders are the folks who believe that there will be a crisis of confidence sooner than the deflation drama can play out. Short term on gold you would have to decide if there are more of the first crew or the second crew and place your bets accordingly, ever shifting your bet as you think the public will shift their bets.
In the end, long, Gold will always be the answer. I'll just hold. I am not smart enough and I can't handle the stress of trading it up and down.
MsCreant,
I am of your opinion, sure it MAY go down like '08, but WHO knows?.
Even if it does, Inflation will be back so fast, we may not have a shot at regaining positions, esp physical. .
I am staying on this horse..........takes too long to build a position.
+ $1230 MsCreant.
I have a proven record as a lousy trader.
I just buy (as any money comes in) and hold physical Gold.
Pimco want to buy some cheap gold? Are they copying the GS contrarian style?
Risk on for short term, back to gold by the end of the year?
Did they sell gold or just sell Gold ETFs. The paper is a (likely worthless) derivative of the physical. Maybe the figured out ETFs are a scam and decided to get out early while the paper has some value.
Ras Bongo also has a good point. Maybe they realize the paper is just for trading and not holding, realize the gold price suppression is about to begin again in earnest, and are taking profits. They'll buy on the dip, and rinse - repeat.
redrob,
I do not see Pimco, holding Physical period.
Maybe Pimco needed some cash.
El-Erian: It depends on what else you have in your portfolio. I can tell you that we had an allocation of gold in our multi-asset products, and we've halved it recently. We still think it makes some sense to have an allocation to gold, but not as much as we used to.
http://www.fool.com/investing/general/2010/06/02/pimcos-ceo-stay-on-the-sidelines-now.aspx
Seems to me there is a (more) concerted effort to down talk gold now. Ok, usually there is the 'normal' noise, yet now it seems they are turning up the jabber jawing volume. Face it, all they have left is jabber jawing as the buying with physical delivery demand is probably finally at a breaking point for the paper pushers. Agreed we have been hearing physical squeeze paper for years, yet have a feeling the time may have finally arrived where the ability to deliver physical is reaching critical mass. GLD was a nice paper cap to avoid physical, yet uptics in many countries buying physical may be causing the open market supply depletion. Call it paper gold death by a thousand blows.
why are the dopes then buying treasuries?
I was just about to ask the same thing. Didn't Gross come out a few days ago and say they have been buying T's the past several weeks again?
I'm looking at that, and what was said today, and I am wondering to myself "WTF"?
end of the year, laughing? are you watching the boyz HFT the market this morning? they are the people trading.....the peasant horde is not arriving to take the stocks off their hands at these ridiculous prices.....
what's more, this morning the online brokers are out with their figures, and they show that retail is openly leaving stocks.....their trade numbers are off 20-30%.....
so what? you're going to wait to get into gold for the end of the year? if you don't have it by the end of the month, you could be cooked.
this game is ending. there are cracks all over.
Market hated that news by Pimco. Gold decided to rally $12 . Still gold is rather toppy in hear. Maybe Bill Gross sold of his holdings waiting to buy during the next, sell-everything now washout. He needs to make sure he has enough gold around so he furnish his next add on of his $30 million Newport Beach mansion.
you have to wonder at what point the boyz will realize that the peasantry is not going to show up and buy the stocks they now own at the most ridiculous prices....
that's going to be a fun day...watching them HFT back and forth and try to dump the old hot potatoes on each other....
rolling.
What is half of nothing?
I also tripled my exposure to BP this morning...
You bought two more houses on the Gulf of Mexico to add to the one house you already had?
No. I had shrimps for breakfast and a double portion of red snapper for lunch...
nothing better than a double portion of red snapper for lunch.
otherwise known as the nooner special in some parts...
Not if it is diseased, no afternoon delight there.
red snapper now illegal to keep off SE coast...
edit....double entendre, tricked me. My mind is always on fish.
won't even get into talking about the shrimps he had at breakfast.
to each his own...
LOL!!
cap't, capt!!! i'm givin' 'er all i can!!!!! and its going nowhere.
Oh. So that's what ramped gold... at around noon...
That's why I was checking in.
Ta.
Looks like Gold & Silver are having a "Viagra Moment" at present...
the "markets" are not worth thinking about anymore. It doesn't matter what anyone does. The banks and their whores in government have pushed us beyond the point of no return. We are fucked no matter how we "play the(ir) markets"
every day is more absurd
because of what they've done
this condition does not lead to prosperity
Yep, best way to play, is not to pay!!!! DON"T Pay on Anything!!! Make them take you to court 3-4 yrs down the road, then don't show up, and all you get is a judgment. Ow, don't hurt me LOL. In the meantime, I will pocket all my earnings. Credit score means squat when the crooks aren't lending anyway. In 7yrs you have a new clean credit report and it didn't cost you one red penny.
jk, Just make sure to pay your utilities......... Local Muni's, are not forgiving like the Unca.........I have read numerous accounts of people losing paid for homes, over unpaid utility bills. One lady, owed $3k, and they foreclosed, Sherriff came and evicted her. Lost it all. Many others, same thing, jail time......for non pmt of UTILITIES!!, stay there till they get the funds!!.
Cities, are not playing.
i like your thinking
Selling gold and buying renminbis
"Man invented language in order to lie." But the lies are becoming less effective when it comes to their effort to
control gold. Ignore the fiat
price-noise, only the number of ounces you have counts.
And fuck Pimco, Buffet and all the economist whores and thank Sinclaire, GATA, fofoa and others for their vision... and Tyler et al of course. v
PIMCO probably own paper gold, and made a nice return in the last few months.
There are predictions of a separation between physical gold and paper gold, maybe they're just avoiding that. Besides, they didn't sell it all, just changed allocation.
Apparently PIMCO hasn't had any trouble finding buyers for their gold. :)
PIMCO has a big boat to steer. To me, it sounds like they are steering towards shorter-maturity Treasuries and less gold for the time being.
As for their reasoning on Gold, who knows? Maybe they see a gold bubble coming, or figure that the BIS ultimately views currency transactions in term of SDRs, so the price/supply of gold may matter less than some want it to? They are a private entity and a market mover; it's their right to be a little poker-faced from time to time.
Help! The real issue is the proportion of gold to silver ownership to have. I'm leaning to 60/40 favoring gold. Any thoughts,
reading suggestions? Thanks
Sounds like a plan to me............depending on your Net worth, and the ratio of your holdings.
After struggling with that question I decided upon 10:1 silver:gold by weight. Over time I expect that the ratio of > 60:1 gold/silver price will move closer to the natural 17:1 ratio once the manipulation is stopped and the market takes over.
The wealthier you are the more inclined I would hold more gold (by value). "Wealthy" of course is subjective.
Also, silver is historically cheap vs. gold, so if you want to add a speculative component to your holdings, yeah, OK, buy more silver.
So, like the above posters replied, depends on your circumstances. The fact that you are buying BOTH though means you are 90% there.
given recent history, whatever you are doing, you probably dont want to be on the other side of the trade with PIMCO. Just sayin..........
Paper is Pimco's game. It must be getting scary.
Paper or physical? Anyone know?
The vast majority of people have been caught in a deflationary spiral for three years. Their house and investmenst have taken a large hit. We will see more deflation before inflation takes hold.
Of course if your wealth takes a hit, you could argue it is inflation since you have to give a bigger percentage of your wealth for the same goods.