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PIMCO Sells $26.5 Billion In Treasuries And MBS In November, Goes To Cash

Tyler Durden's picture




 

Pimco's flagship Total Return Fund released its November data: the fund continues liquidating its MBS holdings, selling another $7 billion in November (after dumping $10 billion in October), and bringing the total to the lowest it has held of this security, at $23.9 billion. Keep in mind TRF held just under $120 billion of Mortgage Securities in February: a nearly $100 billion reduction. Thank you Ben Bernanke Bid. Mortgages are not the only class getting cleansed by Gross: the world's biggest bond fund also sold $20 billion of Treasuries, bringing its govvy holdings to $101.7 billion, down from $121.3 billion in November. The biggest beneficiary: cash, which increased from a net short position of -$13.5 billion to $14 billion. And in the meantime, the fund still made a boatload: total AUM in TRF increased from $192.6 billion to $199.4 Gross is sticking to his pessimistic view and liquidating. Who is buying?

 

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Thu, 12/17/2009 - 20:33 | 168235 SayTabserb
SayTabserb's picture

I give. Who is? And how much for the MBS?

Thu, 12/17/2009 - 20:36 | 168238 Kreditanstalt
Kreditanstalt's picture

Who?  The buyer of first, last and only resort.  That or one of their other CB proxies.

Thu, 12/17/2009 - 20:41 | 168241 yy
yy's picture

The FED has little choice but consume the mixture they brewed, but at the end of the day the tax-payer is subsidizing the largesse, indeed. The 100B in MBS will surely end up amounting to $50-70B and the paper difference will be burned to keep us warm.

What a Ponzi scheme! Long live capitalism.... It is is but a state of the mind.

 

 

Wed, 12/01/2010 - 01:30 | 767076 Karston1234
Karston1234's picture

he biggest beneficiary: cash, which increased from a net short position of -$13.5 billion to $14 billion. online graduate degrees | online certificates | online undergraduate certificates | online graduate certificates

Thu, 12/17/2009 - 21:49 | 168243 john_connor
john_connor's picture

I think the "who is buying" is referring to who is buying into the fund.  probably anyone and everyone.  always trust the bond guys over sell side equity shills.

Ben has been buying the MBS and primary dealers have been buying the treasuries.  what a circle jerk.

Thu, 12/17/2009 - 20:51 | 168246 NRGTDR
NRGTDR's picture

The U.S. taxpayer. We are heavy on the bid to infinity.

Thu, 12/17/2009 - 22:01 | 168313 bugs_
bugs_'s picture

Excellent comment.

Thu, 12/17/2009 - 20:56 | 168249 Anonymous
Anonymous's picture

I hope he hasnt been buying Gold.

Thu, 12/17/2009 - 20:57 | 168251 Cognitive Dissonance
Cognitive Dissonance's picture

Always watch the rats, not the people. The rats know when to leave the ship, even if the people don't.

Thu, 12/17/2009 - 23:54 | 168425 Problem Is
Problem Is's picture

"Always watch the rats..."

That piece of advise can do more to save your ass and your wallet than any other rule of thumb I know.

Fri, 12/18/2009 - 00:46 | 168466 dark pools of soros
dark pools of soros's picture

cant wait till they run off to china

Fri, 12/18/2009 - 02:14 | 168522 delacroix
delacroix's picture

a rat will piss in his own nest, and If you win the rat race, you're still a rat

Thu, 12/17/2009 - 21:00 | 168256 Stevm30
Stevm30's picture

Seriously - who is buying?  If China, Japan, the U.K., and PIMCO are selling longer dated treasuries - who is buying?

Thu, 12/17/2009 - 21:35 | 168292 deadhead
deadhead's picture

perhaps banks. lots of excess reserves and they can pick up an easy 4.40%

Thu, 12/17/2009 - 22:21 | 168325 Stevm30
Stevm30's picture

That makes sense - but 30 years?  Seems risky to me.

Thu, 12/17/2009 - 22:35 | 168340 novanglus
novanglus's picture

riskier than what?  it's all relative

Fri, 12/18/2009 - 02:41 | 168527 Stevm30
Stevm30's picture

Gold, bitches.

Fri, 12/18/2009 - 00:48 | 168468 dark pools of soros
dark pools of soros's picture

AIG??  who the hell cares whats on their sheets now

Thu, 12/17/2009 - 21:00 | 168257 mrmortgage
Thu, 12/17/2009 - 21:01 | 168260 Quantitative Wh...
Quantitative Wheezing's picture

Most likely the CB is buying, but the better question is...what are they preparing to buy with all that cash?

Thu, 12/17/2009 - 21:14 | 168277 FLETCH
FLETCH's picture

the same stuff back after rates explode and the MBS constant bid is gone mar 1

 

 

Thu, 12/17/2009 - 21:30 | 168287 Rainman
Rainman's picture

 Bingo. Congratulations. You win a prize !!

Fri, 12/18/2009 - 00:27 | 168452 ghostfaceinvestah
ghostfaceinvestah's picture

Exactly, there is a price at which the agency MBS market will clear.  It is just 4-6 points lower than the market today.

Thu, 12/17/2009 - 21:13 | 168278 Anonymous
Anonymous's picture

Does PIMCO buy distessed debt? If so '10, '11 and '12 will probably be a fun time with all that PE-debt coming up.

Thu, 12/17/2009 - 21:04 | 168264 Anonymous
Thu, 12/17/2009 - 21:16 | 168280 Anonymous
Anonymous's picture

When the State is selling, like when Gordy was selling UK gold--you should buy. And when the State is buying, you should sell. And Bill Gross is no dummy. SOLD! to Ben Bernanke.

Thu, 12/17/2009 - 21:37 | 168293 RobotTrader
RobotTrader's picture

He must be buying again.

 

Fri, 12/18/2009 - 08:43 | 168589 Anonymous
Anonymous's picture

A 15-minute bar chart of the 15-minute bar chart.

Thu, 12/17/2009 - 21:40 | 168295 huntergvl
huntergvl's picture

I manage my own money and I have a sizeable position I let Bill handle for me. Bill will make sure I at least have a solid foundation to my investments. Warren Buffett?.....nahhh, Bill's the man. Capital Preservation works for me just fine in this environment, but I am actually still making money through PIMCO (14.62% this year in a bond fund!). Thank god they are offered in my 401k!!!

Fri, 12/18/2009 - 01:55 | 168514 Anonymous
Anonymous's picture

isn't that special? that company is so criminal it isn't even funny anymore.....

Fri, 12/18/2009 - 02:22 | 168523 Anonymous
Anonymous's picture

Gross + Citi means something very bad has just happened. What?

Fri, 12/18/2009 - 02:24 | 168524 Anonymous
Anonymous's picture

where is the pimco fund data released?

Fri, 12/18/2009 - 03:01 | 168535 Bear
Bear's picture

I think PIMCO has a real clear grasp of when MBS purchases are going to end and has timed their last sale to correspond to the FEDs final purchase 2/10-3/10. 

Fri, 12/18/2009 - 07:30 | 168568 rawsienna
rawsienna's picture

Clearly a bet on the fact that there is only an illusion of leverage/liquidity in the system-induced by the 1.5+trillion of Fed liquidity as a substitute for lack of available leverage post LEH.  As the drugs are removed from the system, the patient will suffer from higher rates and wider spreads.  The Pimco guys ado their homework and are very good.

Fri, 12/18/2009 - 08:34 | 168587 Anonymous
Anonymous's picture

MBS - Major Bull Shit. Yet another disguised bailout for the terminally rich.

Fri, 12/18/2009 - 10:16 | 168631 Anonymous
Anonymous's picture

I only see holdings out to Sept 30, 09. Where'd you find an updated holdings analysis?

Fri, 12/18/2009 - 12:22 | 168774 Anonymous
Anonymous's picture

Year-end selling. Ultimately PIMCO is a fund whose buyers/clients are more conservative than the average large investors, or require a more conservative approach than they would from a a more aggressive fund. When PIMCO reports to its investors what it held at year end, they will show that substantial portions of their holdings were in safe, liquid, cash instruments. When 2010 rolls up, they will get back into the carry trade. Then in March and June and Sept., we'll hear more about them moving into cash. Ofcourse it will all be window-dressing. The trick is that when they report to investors what they are holding, and what their returns are. They will have "shown" that they beat similarly invested competitors. Hence, Bill, Mo and Douggie,can justify their personal reward because of all the "alpha" they generate.

Fri, 12/18/2009 - 13:33 | 168915 geopol
geopol's picture

I've got it on good inside info that the dollar, is depressed...and will only get worse..

 

http://media.townhall.com/Townhall/Car/b/sbr102309dAPR20091021091327.jpg

 

Add Benjamin Franklin’s wink to the U.S. dollar’s list of humiliations.

The 18th-century American statesman is perhaps best-known in Asia for gracing the front of the $100 bill. Asians used to worry about counterfeit “Benjamins.” Now, they’re frightened of the real thing. Since January 2008, 25 percent of the dollar’s value has melted away versus the yen. Time for a redenomination? Japanese toymaker Bandai certainly thinks so.

 

http://www.bloomberg.com/apps/news?pid=20601039&sid=a_1UjBOzaP_g

Sat, 12/26/2009 - 14:57 | 174963 Anonymous
Anonymous's picture

He selling now & will start buying @ higher yields later in the yr.

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