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Pimco Holdings Of US Government Debt Surge, Its European Debt Experiment Is Now Over
Even as most asset managers experienced a devastating May, with many recording drops in AUM of -10% or worse, there is nothing that can topple the trillion+ bond giant out of Newport, which is so large it is now virtually the market in most of its product verticals. In the May performance report, of Pimco's flagship Total Return Fund, the fund's total assets grew once again, hitting $228 billion, an increase of $3.4 billion over April, and 45% higher than last year. Combing through the fund's holdings, the firm has now officially said goodbye to the "foreign developed" bond experiment, with non US developed holdings plunging by more than 50%, to just 6%, compared to 13% in April, and a high of 19% in February. The beneficiary of this adjustment were US bond holdings, which surged from 36% to 51% of all holdings, or a MOM increase of over $35 billion! This represents about a third of all (settled) US bond issuance in May. Who needs QE2 when you have Pimco. Another notable observation is that the fund is now once again acting on margin, with a -4% net cash position. The last time the fund was on margin was in October 2009. Lastly, TRS has been slowly shifting further out in duration, with holdings of 5 Year or longer maturing notes rising to 56%, compared to 51% in April, and a low of 8% in November 2008, just after the Lehman bankruptcy.
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Pim"p"co is a support system and nothing else. They have followed trends mercilessly. They, like so many others, are a good contrarian indicator. They also talk out of both sides of their mouths. Two faced, what have you.
+1. I was also going to trot out the name Pimpco, even thinking it original, but surely I must have seen it somewhere before.
Bond market has no direction, the way is shut and the exit is closing.
+1
LOL!!!
PIMCO, the latest TBTF.
It begs the question "Why isn't Pimco buying gold?"
That would be anti-Ponzi and not in their best interests.
Because when Bill Gross fluttered his eye-lashes and asked
mirror, mirror on the wall who is the fairest of them all?
the face that stared back said "Ben and Tim".
Bill's doubts melted away in orgiastic awe and he immediately started buying Treasury bonds.
Don't need gold when the plan is to fail.
When you've got DEEEflation, then you need DOOOOration.
Go, PimPco, go! It's a pleasure to know so much cynically managed OPM is on my side of the trade.
I HOPE YOU SOME OF YOU GUYS REALIZE WHAT CASH SETTLED QUARTERLY INDEX FUTURES AND OPTIONS EXPIRATION AT 9:30AM EDT TOMORROW MEANS, WITH THE USDJPY GOING SOUTH WHICH WILL CAUSE ASIA TO SELL OFF HARD TONIGHT..
THE SPX WILL FALL 30-40 HANDLES OVERNIGHT.
So, what else do you see?
I don't understand why you guys hate PIMCO so much. Is it based on Gross and El-Arian's media appearances? PIMCO TR has been one of the true stalwarts in the bond industry, they consistently rank in the top decile of bond funds over long periods (5,7, and 10 years).
Why the hate?
Personally, he flacked for TARP in a big way (world was going to end, etc).....
No conflict of interest here, move along!!!
If you are feeling plain vanilla and like sleeping well, you will like Pimco. That doesn't mean they are infallible.
My only gripe with them is their super secret movements that disrupt client values without giving warning that a transaction has transpired. They just did it again on May 7 with dispositions with their managed clients and kicked up a shit storm of inquiries. They can easily avoid that, but someone in communications there hasn't heard of internet alerts.
I don't mind Gross's and El-Arian's media appearances that much. At least their comments aren't grossly offensive to common sense, which is more than can be said for others. However, my take is that they temper their comments to a significant degree.
I dislike Pimco because they're propping up Treasuries and because their position in GSE debt contributed to FNM's and FRE's TBTF status. All of this US government debt should just be defaulted on, which would have two huge benefits. First, it would make it very difficult for Congress to borrow significant amounts again, and for quite a long while. Second, everyone who lent the government money, thereby financing myriad immoral activities, would learn a lesson that they richly deserve and wouldn't soon forget.
....Pimco is not propping Treasuries for patriotic reasons. They are sticking their nose as far up Obama's ass as possible. It's about preservation of capital. And a USG debt default is an armageddon no one will be able to hide from, regardless of individual asset class affinities. Under such a scenario, it would be all about paid off farms and crops and a lot of guns to keep the taxmen at bay.
>All of this US government debt should just be defaulted on, which would have two huge benefits.
WHEN the deflationary bottom falls out of equities and the yield curve goes pancake, Wild Bill is going to look like "the smartest guy in the room". The problem for him comes right after that. Where will he go with that trillion dollar boat when QEII starts in ernest? Cash? Default is out of the question. That's when you really want to be in gold and TBT.
PIMCO = Household Sector?
Naaaah.