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So Much For Pimco Buying Bonds: Duration Weighted Treasury Exposure Hits Whopping -23% Short, Cash Surges To Unprecedented $89 Billion

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Mon, 05/09/2011 - 18:57 | 1257269 bob_dabolina
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Party @ Pimco! Bring your Huggies, they are predicting quite the shit storm.

Mon, 05/09/2011 - 19:05 | 1257291 Ahmeexnal
Ahmeexnal's picture

Bill Gross is going to buy up PHYSICAL SILVER AND GOLD!

Mon, 05/09/2011 - 19:12 | 1257310 camaro68ss
camaro68ss's picture

So is this good for Ipad2 and netflix or not????

Mon, 05/09/2011 - 19:28 | 1257352 CPL
CPL's picture

Depends how well ipads stand up as shingles.  Netflix is a tough one, would be like trying to build a house out of unused gym memberships...


I predict a complete shit storm on open across the board of all markets.  It should give the FED the kick it needs to print more money though.

Mon, 05/09/2011 - 19:30 | 1257363 camaro68ss
camaro68ss's picture

your right, you can dig up Ipad2 out of the ground for what, like 5 bucks? hahaha

Mon, 05/09/2011 - 19:41 | 1257411 Manthong
Manthong's picture

WTF do you do with $89B in cash?

I suppose that much in paper notes could keep the furnace at the Pimco Building going for a while.

I've seen pictures of that being done before. 

Mon, 05/09/2011 - 21:17 | 1257635 Harlequin001
Harlequin001's picture

More to the point, who's going to pay up for this short when he tries to collect?

The Fed, of course. The money supply is about to go ballistic with QE3, 4 and 5 in rapid succession.

Congress is going to be very busy raising the debt ceiling again and again and again...

and pm's will go ballistic with it.

Mon, 05/09/2011 - 21:53 | 1257734 Mec-sick-o
Mec-sick-o's picture

That's a nice wrecking ball.

I have some ideas... monopsony of PM perhaps?

Mon, 05/09/2011 - 19:52 | 1257436 CPL
CPL's picture

Depends on the landfill in India, I'm sure a street urchin could do it for $4.  Knock the gut out of them to make a nice picture frame to hang on my BreX wallpaper in den while pulling a mixture of Enron, Pets.com and Lehman brothers shares out of the Kleenx box.  To make sure their value doesn't blow away I'll put my newton on top of them.


I'll then look out the window at my impressive windmills built with real CLNE stock and straws making me zero money.  Gentlely drawing the stylus from my Palm Pilot, I'll pick my teeth and wonder if it had been any different...

Mon, 05/09/2011 - 20:14 | 1257486 Ahmeexnal
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I hear ya. Still have a couple 2100s and one 2000.

Mon, 05/09/2011 - 23:32 | 1257978 Papasmurf
Papasmurf's picture

A geniune Enron or Pets.com certificate is worth good money on ebay these days.  No so much for the FRN.

Mon, 05/09/2011 - 19:33 | 1257369 SheepDog-One
SheepDog-One's picture

It all depends on how absorbent IPad2's are, maybe better for folks to just put on the adult diapers for the shitstorm thats here.

Mon, 05/09/2011 - 19:24 | 1257345 Goldman Hufs
Goldman Hufs's picture

Can gross hypothetically buy American Silver Eagles while sticking to mandate of the fund or would the premium over what it could be used to purchase items in a store negate this option?

Mon, 05/09/2011 - 19:46 | 1257406 Sisyphus
Sisyphus's picture


JEWELRY BUYERS in India stood in line to Buy Gold on May 6, as shops opened early for the festival of Akshaya Tritiya.

And you thought people stood in line overnight to only buy iMaxiPads and iTrackPhones


Yep, let the price collapse and see how soon Gold disappears. One word - Asia.


Figures from the World Gold Council show India as the world's largest gold market. India accounted for nearly 32% of global demand in 2010, at 963 tonnes of Gold Bullion. The second largest market was China, which bought 579 tonnes.

Mon, 05/09/2011 - 20:36 | 1257537 Quaderratic Probing
Quaderratic Probing's picture

He sees rates climbing and will buy US debt with the 89 billion. He will not buy silver or gold or copper or oil as he sees a USD back at 120 from 73 and in that case commodities will be trash. You me him ..... who has the trillion? He did not get there by being wrong............come to think of it the bond market is always right

Mon, 05/09/2011 - 20:56 | 1257574 Atlas Shrieked
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Do you even know what happens to bond prices when rates climb?  I hope you're saying he's waiting for rates to soar, and THEN step in and buy bonds.  The only reason he can't buy tangible assets because it is not mandated.  He's answered this question before.

Tue, 05/10/2011 - 22:46 | 1261527 Quaderratic Probing
Quaderratic Probing's picture

Yes Bond price will collapse and he will not care hes in cash

Mon, 05/09/2011 - 18:59 | 1257273 Quinvarius
Quinvarius's picture

He could buy up all the silver on the COMEX, 71 times over with that scratch.

Mon, 05/09/2011 - 18:59 | 1257279 ReallySparky
ReallySparky's picture

I wish he would.

Mon, 05/09/2011 - 19:15 | 1257331 Don Quixotic
Don Quixotic's picture

Not with the new position limits they're about to institute, he can't... doesn't matter how much money he has. Yay for free market capitalism.

Mon, 05/09/2011 - 20:29 | 1257499 Ahmeexnal
Ahmeexnal's picture

New position limits mean squat when PHYSICAL is being bought at all scales, from ant operation to multi-ton deals.

JPig Mormon is about to suffer one major blow, given by none other than themselves.

Let them pull the trigger on those position limits. A lot of people have been reading about silver's rise/fall these last couple weeks. They've been to many silverbull blogs.  Most of them have been EDUCATED. You'll be surprised at the percentage of them who have been able to connect the dots.  And now they await a good entry point.

JPig Mormon is about to unleash an avalanche that will bury COMEX once and for all.

Tue, 05/10/2011 - 01:39 | 1258204 Arkadaba
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LOL moment

Mon, 05/09/2011 - 19:01 | 1257276 FOC 1183
FOC 1183's picture

vs. their benchmark, that is huge

Mon, 05/09/2011 - 19:02 | 1257283 vast-dom
vast-dom's picture

the only sane position is to short bonds. unfortunately market read Fed manipulation is for me illegal bitch a la COMEX et al. $cam$ abound!

Mon, 05/09/2011 - 19:03 | 1257285 Pepe
Pepe's picture

"Hyperinflations offer monetary economists a natural experiment they can use to study the effects of money on the economy" -we all know that bernanke is a scientist at heart and uses the experimental method

Mon, 05/09/2011 - 19:07 | 1257294 youngman
youngman's picture

He is going to need all that cash to cover his margins as they keep raising the requirements to 100%...

Mon, 05/09/2011 - 19:51 | 1257434 Boston
Boston's picture

Depending on how well Bill Gross was hedged, the last month could have been very painful for him.

I totally faded him.



Mon, 05/09/2011 - 19:05 | 1257295 bob_dabolina
bob_dabolina's picture

It will be so cool watching this debt ceiling drama play out. 

Trillions in cuts vs. Liberals. 

Someone is going to have to capitulate in this game of Texas Fold'em. Will the Dems see eye to eye with the Republicans or will the Republicans chicken out and concede to less than trillions in cuts? 

We got reputations on the line here (for whatever that's worth in Washington) and some junior members looking to make a name for themselves. 

The Right has very valid arguments to back up their positions and the Left has sycophantic megalomaniacs that believe borrowing is the best way to get out of debt. 

Will be fun watching this rope geting tugged.

Mon, 05/09/2011 - 19:10 | 1257312 NotApplicable
NotApplicable's picture

As long as its not around our neck.

Mon, 05/09/2011 - 19:14 | 1257321 bob_dabolina
bob_dabolina's picture

When is it not?

Mon, 05/09/2011 - 19:30 | 1257362 LowProfile
LowProfile's picture

When your assets are outside the system.

Tue, 05/10/2011 - 03:41 | 1258288 Gavrikon
Gavrikon's picture

And when the bastards create some kind of precious metal redemption tax/fee?  Or, what the hell do I know, make you have a digital tattoo to buy or sell anything? 

Sorry, sorry.  Apocalyptic fit is over now.

Mon, 05/09/2011 - 19:31 | 1257364 duncecap rack
duncecap rack's picture

Will it be fun if they get rational and focus on the revenue side of the equation also?

Mon, 05/09/2011 - 20:58 | 1257404 bob_dabolina
bob_dabolina's picture

Can't worry about the revenue aspect until you put a tourniquet on the area hemorrhaging, which is the spending side. 

I think taxes need to be raised across the board, however, it's useless without a prudent plan to stop the bleeding. 

When I was in the Marines we had the 4 life saving steps: 

Stop the bleeding;

Start the breathing;

Protect the wound;

Treat for shock;

The reason you stop the bleeding first is because what's the point of pumping on a casualties chest with CPR if all you're doing is pumping his blood out of a severed artery? It's the same concept here. If you don't stop the spending, the tax increases don't do much. 

Interesting homework assignment: 

If you were to take every CENT from EVERY US billionaire (100% tax on all assets) How much would the deficit (or national debt) be reduced by? Now once that 1 time tax levy is instituted it can never again be touched (because now we don't have anymore billionaires). How do you solve the remaining and ridiculous amounts of debt we would still have? It's the spending side where the real problems are and they require aggressive action a.k.a stop the bleeding.

Mon, 05/09/2011 - 21:17 | 1257643 JFK.4PREZ
JFK.4PREZ's picture

1 dollar = 1 second

1,000,000 dollars = 11.5 days

US Budget Deficit = 457,000 years


Haha.  EATING THE RICH WILL NOT WORK: http://www.youtube.com/watch?v=661pi6K-8WQ


Mon, 05/09/2011 - 21:38 | 1257698 LawsofPhysics
LawsofPhysics's picture

The "rich" are already eating each other.  The debt is a fraud, their "wealth" is a fraud.  Crash the fucking system already.  The sooner we do, the sooner compensation will return to people who are actually worth a shit. 

Mon, 05/09/2011 - 22:52 | 1257869 LaLiLuLeLo
LaLiLuLeLo's picture


Tue, 05/10/2011 - 00:55 | 1258148 Augustus
Augustus's picture

Taking 100% of the assets of all US billionaires would not clost the deficit gap for 2011.  Once that is pissed away by the congress craps, they can move on down the line to all assets for anyone over $750 million.  that will help with the 2012 gap.

When they try to move down to the $500 milllion they will find that the money has vanished to money heaven in some other country.  Never to return.

Mon, 05/09/2011 - 20:32 | 1257522 sabra1
sabra1's picture

it's all just political theatre to give the illusion of haggling back and forth. they all have the same puppet masters!

Mon, 05/09/2011 - 21:23 | 1257654 riley martini
riley martini's picture

 You nailed it they will collect bribes, bonuses and votes all along the way as the brain-washed party minions cheer " we're winning " when they think their party masters have won a point.  They will need large gathings with the finest trimming money can buy and guess who gets the bill.

Mon, 05/09/2011 - 19:06 | 1257300 Gubbmint Cheese
Gubbmint Cheese's picture

Given the severity of this situation I think its best to assume Pimco is llying...

Mon, 05/09/2011 - 21:24 | 1257656 Sockeye
Sockeye's picture

Comment of the day!

Mon, 05/09/2011 - 19:10 | 1257302 NotApplicable
NotApplicable's picture

Isn't China's effective duration also around 3.5 years?

Mon, 05/09/2011 - 19:08 | 1257304 augie
augie's picture

that is an absurd amount of money.

Mon, 05/09/2011 - 19:09 | 1257307 astartes09
astartes09's picture

So if the Fed stops buying the debt at the end of June, and then no other country wants our debt, what happens?

Mon, 05/09/2011 - 20:09 | 1257316 bob_dabolina
bob_dabolina's picture

Interest rates go down /sarc

bbbb but why would no other country want our debt?

We're AAA+ according to the rating agencies. 

Mon, 05/09/2011 - 19:22 | 1257339 camaro68ss
camaro68ss's picture

Rate hit the moon, the government collapse under its debts, then the rabies virus mutates and turns people into zombies starting a zombie apocalypse.

ok maybe the 2nd might not happen but it might as well happen. People will be roming the streets like zombies after there 401k's takes a shit and all aspects of the economy come to a hult.

Mon, 05/09/2011 - 21:37 | 1257693 quasimodo
quasimodo's picture

I really do hope the 401k takes a huge fucking dump. Can't convince the old lady to take the hit and cash the fuckers out; methinks I will have one big case of "told you so"

All she can say is "stuff goes in cycles"


Tue, 05/10/2011 - 03:42 | 1258291 Gavrikon
Gavrikon's picture

While mine wants to cash out and buy more physical metals.  I agree, except that she wants to wait until the end of the year to pay the tax and 10% penalties.  Last week proves it's better to bite the bullet earlier.

Tue, 05/10/2011 - 03:47 | 1258296 Gavrikon
Gavrikon's picture

While mine wants to cash out and buy more physical metals.  I agree, except that she wants to wait until the end of the year to pay the tax and 10% penalties.  Last week proves it's better to bite the bullet earlier.

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