PIMCO Raises Combined Cash-Synthetic Treasury Position To Zero, Buys European Bonds

Tyler Durden's picture

The latest monthly breakdown from PIMCO's Total Return Fund is out. Among the key findings for June are that the total AUM declined modestly by $400 million to $242.8 billion, well below the all time highs of $256 billion in October 2010. More notably, it appears that Gross has gotten tired of being mocked by CNBC for his Treasury short position and has raised his cash Treasury bond exposure by 3% to 8%, though even with that move he is still net neutral courtesy of a 1% Agency cash position and -9% in synthetic swap exposure, unchanged from May. Therefore Gross is no longer short on a net basis. He also reduced his IG exposure from 18% to 17%, offsetting an increase in emerging market corp bonds by 1%. Where he did however invest quite a bit of money in are Non-US Developed market: i.e. European sovereigns: arguably Italian names, as per the announcement of PIMCO's Bosomworth on Bloomberg TV last night. However, since this report is for June, and since the increase in bond exposure occurred before the massive rout in July, it probably means that Gross did not time his increase in European debt exposure quite as well as he had hoped. Lastly, and just as interesting, is the increase in the effective duration of the TRF, which rose from 3.73 to 4.37, the second highest in 2011, and a steep rise from the near record low 3.42 in April. At least Gross can now saw that he is no longer largely underweight duration. Lastly, the fund still has gobs of cash, at just over $70 billion.

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PaperBear's picture

PIMCO could crush CRIMEX silver in a split second by saying "I'll have the remaining 28MN oz".

Mike2756's picture

Chasing yield again?

Manzilla's picture

$7 billion in cash or $70 billion?

Hard1's picture

7bln is 3% of the fund, I don't think they have 30% in cash...still it's a lot of cash, imagine how much gold u could buy

Careless Whisper's picture

I want to invest in China. High quality.

New road collapses after 2 days. Excuse me, 1 1/2 days. Love those guard rails.



long-shorty's picture

this looks just like the road those three government officials were inspecting!

djsmps's picture

I'm sure glad that the steel sections for the new span of the Bay Bridge were made in China. Luckily, the Bay area is not a seismically active zone.

knukles's picture

Nor any asians there either.


And 32 times -27 does fucking equal -864.
So no more comments about bad math (stuff like Greece's or Spain's debt, US debt ceiling, etc.) from the paenut gallery cheerleading section.  Buggers. 

Mike2756's picture

That's ok, it'll be inspected.

knukles's picture

Just like the bridge/road/train station/train/water/food/milk/whatthefuckever in China, but just remember, now it's being done right, by a bunch of mysogynist public employee members of the SEIU who cannot be terminated for cause, who, around SanFran might even like to take one of those big steel bolts and stick it in their bungs, write the report as "la de dah" and when the bridge collapses during the next magnitude 8.9, caused whole or in part by the magical HAARP machine trying to wipe the entire evil gay population off the map when Michelle Bachman is president, then they can blame it on the Godless Chinks when nobody'll get healed through prayer and positive thinking.

We are in Good Hands, with The State
(picture of TSA agent squeezing boy's glotz) 

Careless Whisper's picture

Henry Kissinger celebrates Red Day a few weeks ago with his Commie friends. Says Mao is great (@2:10)


Chinese propaganda with rap "good men join the army". "mao is tha man" got millions of views in China.




Helena Bonham-Carter's picture

O my sweet beef, I must still be good angel to thee. The money is paid back again.

There is No Spoon's picture

Gross getting whipsawed just like cta's and hedge funds - no asset class works in a high correlation world.

knukles's picture

No asset class saves a manager from bad decisions.
Was it Timmah told him it was "a good idea" at the time?  Fishin' for the new job? 
"Don't worry we're there.  Already on top of it.  Benji's a printin' like there's no manyana."
(giggle, giggle, snort, snort)

Cassandra Syndrome's picture

Relax, we are all getting a bailout from Comet Elenin this October. 

Putty's picture

If that's the case, then bugger off and tend to more important things than these.  If I thought the end of the world was this October, I wouldn't be wasting time here.

cosmictrainwreck's picture

Depending on where you read, approach is 9/10 at 0.45 AU or 9/25 at 0.20 AU. The moon is .0024 AU "close". Do the math

knukles's picture

Close enough for Gubamint work.


BeerWhisperer's picture

Maybe pimco is the u.s. Q.E. to the world since we started this mess. I mean how many other financial gurus are out there criticizing the us treasuries and getting air time out the butt? Geitner says float italy some money.. some money gets floated.... all out war if u.s. does not pay back... eu

RobotTrader's picture


I knew it was only a matter of time before PIMCO got itchy and figured it better "put some money to work" by chasing some crappy asset like PIIGS bonds.

Like I said earlier, the yields are getting high enough to entice some funds with some bravado to go in and brag about how they "loaded up" at or near the low tick, and now they will be able to luxuriate in high yields for years to come.

Now Gross is figuring out what else to do with his money.  Probably end up buying high yield stocks or something.

disabledvet's picture

sure beats pounding the table publicly on shorting treasuries. the headline is still priceless though: "Muhammed says short US treasuries!" would it be any other way? now let us look peerlessly into the sophisticated trading strategies being employed by today's financial "MASTERS OF THE UNIVERSE"


MarkTwainsMustache's picture

Beware==pretty sure Pimco/Gross were among the list of creditors that were caught pants down with Lehman paper as they entered bankruptcy protection.

knukles's picture

I'll take "Notable Bankruptcies" for a Trillion, Alex.

swissinv's picture

Stupid billy boy, why are you investing in juncky souvereign bonds when you have AAA US treasuries? Are you reading any Moody's reports?

Spitzer's picture

so he just loaded up on WOP debt ?

He has timing issues.

Buck Johnson's picture

PIMCO may have been told to cut it out by TPTB and start buying treasuries again.