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So Much For Pimco Buying Bonds: Duration Weighted Treasury Exposure Hits Whopping -23% Short, Cash Surges To Unprecedented $89 Billion
So much for all the conspiracy theories that Bill Gross was capitulating in his short position against US debt even as he continued to bash US fiscal and monetary policy. According to just released April data for the flagship Pimco $240 billion Total Return Fund (which saw a $4.2 billion increase in AUM in the month), Bill Gross actually added to his short position against US government debt, bringing total market value exposure to 4% of AUM or ($10) billion. More amazing is that on a Duration Weighted Exposure basis, the firm's Treasury short is 23%, read that again, 23%! So much for that change in outlook. Additionally, Gross also sold another $8.3 billion in mortgage securities, bringing the April total to a nominal $57.8 billion. Spring cleaning at casa de Bill continued across all fixed corporate income as well, dropping the firm's exposure to IG by $1.6 billion and to HY by $2.1 billion. The only two securities which saw a token increase was in Non-US developed markets and Emerging Markets, to $14.4 billion and $26.5 billion, respectively. Yet the biggest shocker of all, is that Gross has now brought his cash position to an all time unprecedented high of $89.1 billion! That's right, PIMCO is charging a substantial asset management fee when 37% of all assets are in cash. One would think the mattress would cost far less. Either Gross is expecting a huge collapse in the bond market (so contrary to prevailing though), or this could well be the bet that buries the Allianz subsidiary.
Looking at the maturity exposure there are no surprises: in keeping with the firm's move to almost an all cash fund, Effective Duration dropped to the second lowest in history, or 3.42 years. As the chart below shows, Gross' exposure to debt with a maturity under 5 years is a whopping 83%. Which begs the question: just how terrified is Gross of inflation to be cutting virtually any and all 5 year + exposure. And yes, if the firm was expecting a deflationary collapse, the duration exposure would be flipped upside down.
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cash is a position, sometimes you wait for opportunities
Agree, maybe hedoesnt even know what the fuck to do, so he figured cash provides the most flexibility
and he doesn't want to support a federal bond market that pays you next to nothing with a FED that prints to infinity, i invest in a bunch of stuff, but I wouldn't touch treasuries for nothing
Cash is a promisory note, backed by the full faith and credit of the government that issued it. It is also highly liquid and 100% convertible, until faith and credit in the issuing gov is gone.
As such it is a fine hedge while, as you say, wait for what will eventuate.
And to think: Pimco pays 0% taxes on all that paper shuffling.
What a terrible debt crisis!
We're living in exciting times once again as bets are now being placed and laid on the direction of the US economy.
You can bet "The Pass Line" and assume more QE is in the cards. That's what most are doing, although nobody's doubling down yet.
Or you can bet "Don't Pass" and assume, like Bill Gross, that the Fed is out of credibility bullets and pressure will be put on to ensure that there's no further QE no matter if we have a double dip. Bill's definitely doubling down on this.
Personally I bet "Don't Come"
In the words of Bill Gross:
“[T]hanks to QE2, the Fed effectively has monetized more than the entire net issuance of U.S. Treasury debt (to be held by the public) during the last five months. Ostensibly, the Fed has done this in an effort to stimulate the economy and to debase the U.S. dollar (create inflation). While the Fed has little chance of turning the economy to sustainable economic growth, it has been successful in triggering an upturn in consumer inflation. That has been seen in recent months and likely will be reconfirmed in the week ahead.
“I contend that the Fed’s liquidity actions are tied more banking system solvency concerns than to the economy, which continues to stagnate, where elements such as construction are showing renewed economic contraction, after a period of extensive bottom-bouncing. Disappointing economic activity likely will provide the public excuse for QE3, although, again, systemic solvency likely will continue as the Fed’s primary concern. From a monetization standpoint, a hiatus in net Treasury issuance could be in place for the next five months or so, so long as action is forestalled on raising the federal debt ceiling.” – John Williams, Shadowstats, May 6, 2011
Hilarious.
Uncle Gorilla starts raising margin requirements on all sorts of "risk asset" commodities, and that simply spurs the hedge funds to liquidate those positions and pile even more money into Treasuries.
Which simply compounds the problems of Mr. Gross.....
Eventually, he's going to have to start "chasing" something, especially if stocks or commodities get low enough in price to entice him to buy.
The next sound you will hear in June is the KABOOM in the UST market.
And I'll bet we'll see a nightmare swing in the curve that will freak old Ben out as a result.
I'm just sayin'.....
more like in the fall
UST implode could be later...We gotta see the May correction, how signifcant it will be - a 20% or more. Then QE3. China may go down mid/end yr, be interesting to see what they do with their holdings
If the dollar goes up bonds will go up.
If Gold goes up bonds will go down.
But Bill Gross IS going to capitulate.
Your data is from April, and he made the comment in May.
Dummy.
The dollar is going to rally to 79 along with treasuries and Gross is going to get shorn...
My gut is telling me inflation of prices, deflation of wealth will again be in the cards once QE (by name) ends as a consequence of the dollar depreciating further...at least for the short term until liquidity either dries up or something steps into the Feds buying shoes. Perhaps the banks will use (or be forced to use) all their gunpowder to buy some of the debt to keep the rate environment down and the dollar artificially propped up (see links below, first one if it works is a summary). Either way, whatever program they decide to call it, the debt WILL be bought. Yes, it will be bought with crappy paper but it will also be booked as a crappy book entry. The supposed "transfer of risk" is what they care about. Again, at least for the short-term.
There is no long-term plan. The Feds are hoping (no, hope is not a strategy) that the recovery is somewhat real. We all know it is baloney and the serfs are slowly waking up. Slowly but surely, the jig will be up but the govt will do whatever it takes to keep this artificial rate enivronment in place. Right now, too much is at stake.
http://www.economist.com/node/21515769
https://www.imf.org/external/np/seminars/eng/2011/res2/pdf/crbs.pdf
Justaman, THAT is called STAG-fla-tion.
Thanks for the link; it’s interesting that The Economist refers to “the period of financial repression that persisted from the end of the war to around 1980,” as “the managed economic world of the postwar period,” as opposed to now. IMHO, there’s no doubt we’re in the middle of the most centrally planned economy America has ever experienced, hence the epic failure.
Unfortunately, it was hard to get by the war-mongering cover of the Rothschild-owned Economist – featuring a banner headline over a picture of Osama bin Laden blaring: Now, Kill the Dream. That’s over the top. The headline tells The Economist agenda – revenge, hate, kill and never stop.
We went over there, they came over here. And, now, what’s needed say these constant war-on-terror instigators is to add more countries, more people, more enemies to the target list.
Will this chain of blood ever stop?
Once again, we'll have to wait and see. If we're smart, we'll watch closely. -- Goodman
No Concensus on Where Bonds Will Go | Fred Goodman, Publisher, MarketMonograph 5/6/2011
Two weeks ago, we addressed the potential effects of quantitative easing on the stock market. Last week we were concerned with the gold rally. Now we'll tie both issues together and sprinkle in two other targets of quantitative easing: bonds and the dollar. Although these four asset classes sometimes move together, they generally have minds of their own.
Only one full cycle of quantitative easing has finished. The second will end in June. So there is really too little data to make predictions. As I learned from my statistics professor, it's not a good idea to base conclusions on a "series of fewer than two observations."
Nevertheless, many predict the end of phase two of quantitative easing (QE2) will simultaneously end the big stock market rally. Some also say -- logically, I think -- that Treasury bonds will fall with the stock market when the Federal Reserve stops buying them. No less a pundit than Pimco's Bill Gross, manager of the world's largest bond portfolio, agrees. Gross announced he's now shorting Treasury bonds.
However, his concern is not universal. Some bond managers expect the opposite result and provide convincing evidence to support their views. I've plotted the important quantitative easing events below against charts of the S&P 500 and the yield of the 10-year Treasury bond. (Keep in mind that when bonds drop in value, their yields increase.) …
Quantitative easing is inflationary. So when the Fed stops buying bonds, the rate of inflation may slow. That would allow interest rates to move back to the lower part of their range. Gross doesn't believe this will happen. But some of his competitors plan to buy Treasuries when the Fed stops buying them. We'll soon know who is right.
http://www.investoruprising.com/author.asp?section_id=1322&doc_id=206242
My 401k is fully onboard with Bill and the TR fund. This man has made money every year, even in the collapse, and was ahead of the game every time. I will stick with the MAN, until he proves himself wrong. This is one guy who people should listen to when it comes to U.S. junk bonds.
My personal play money is shorting the SPY because this fake ponzi is days away from collapsing into the abyss, and all the longs will be crying MM's cheated me, they are manipulating my stock price. ROFL They aren't crying as it went up, so no crying when it collapses.
So, what's going on in Japan with their ongoing nuclear problem? I see that's been dropped everywhere from our "media" - even here. It's not like the situation is fixed.
...the next four months, a Gross time of sealing. Foul birds, reptile bitchez and a barren tree. Sounds like guns, thunder. http://www.youtube.com/watch?v=bdwMO7GSTkA
+1 simply because Satriani is one of the unsung greats.
It would be interesting to know what the portfolios of some of the better insurance companies look like. New York Life weathered the last down draft well ... Mass Mutual and Northwestern faired pretty well too. Bill Gross isn't the only smart bond trader out there...
The Bank of England Pension Fund; they are always in the know.
Are we not just waiting for them to throw the Euro USD switch again? Inevitable.
I'm sure Gross looks at his monitor every day at price charts like LULU and PCLN and wonders why he runs such a big fund.
He could have made huge money at a small boutique firm and been a superman chasing all those IBD growth names.
Nah, just kidding. Gross has more than enough money.
But you get the point. If you are sitting on $80 billion in cash, and you look at hockey sticked stock charts all day, you are going to get tempted.....
Even that silver chart has to be tempting....
LOL...
wow are you getting more retarted by the day or this is not the real RobotTrader. you are getting weaker and weaker by the day, used to respect you, your posts stood out, now your just like most of the posts, useless.
There was a time where masses stood in awe and gobbled up gems like Countrywide Financial, Enron, WorldComm, Lehman, AIG; hell, even Bernie Madoff fleeced a few.
Bill Gross sees something afoul and I am more than compelled to stay on my toes at this juncture. More realistically, every money manager that is worth his weight in salt is seeing the same thing.
If you want to buy lulu and pcln hand over fist, than that is your perogative, but it's shitty advice.
Looks like Bill is shoving all of his investors' chips in on the big treasury short. As I have posted earlier, expect more interviews/articles with Bill yelling (in "Cramer-esk" fashion) "sell sell sell"!!! ... or Chicken Little "the sky is falling"... or some other version of UST Armageddon. I'm guessing a 60 Minutes infomercial is next. He HAS to be right; and sooner rather than later would be far more profitable. Bill's going to have to change his flagship fund's name to PIMPCO Total Loss Fund. Wow... How will Bill and Muhammad cope with going from gazillionaires to bazillionaires if their UST short doesn't work out? It almost makes me weep just thinking of them cutting their household staff from 9 service workers to 5. I hope they don't have to fold their own socks when this is all over.
China announcing they'll sell treasuries matching Fed buying treasuries means furher QE will be ineffective at keeping prices up (and yields down).
But new treasury debt will continue coming on the market (irrespective of the debt ceiling - which will be raised or simply ignored) to keep US govt operating.
Fed will keep buying it one way or another, and China will respond with equal selling, further depressing prices, China's way of telling the Fed "stop buying the shit or your currency will collapse, then we're all fucked".
Bottom line China sees what's coming and is quietly offloading their US treasury holdings to the Fed (and other suckers).
Perhaps BG sees what's coming too.
The stock bubble may not collapse.
The currency may collapse instead.
The market says this thinking is all wrong. QE2 resulted in higher yields. Just look at the chart of tnx. The end of QE makes it safe to be in bonds again. Therefore, I believe the end of QE lowers yields.
Pimco going short is 180 degrees opposite of the ZH view. Gross is betting on an extension of QE, which will cause bonds to be sold. Which is as it should be. You need a higher yield to compensate for the dilution.
Your view is non-consensus and one with which i share. The view of ZH is that there must be infinite QE otherwise there is nobody to buy US govn debt. That thinking is so short-sighted i wonder if ZH are trying to push something.... nothing happens in a vacuum , especially in financial markets.
Bill Gross - Follow his moves and you are lock-step with Rothschild-NWO takeover plans.
For what it's worth, here is my position on why I think that an end to QE2 and rising bond yields does not mean inflation, despite the conventional wisdom.
http://coveringdelta.wordpress.com/2011/05/10/pimco-adds-to-its-cash-pos...
" It is specifically using all this new money to buy Treasuries, so naturally, the price of Treasuries is being kept artificially high by the very inflation that bond holders are supposed to hate.
I point this out because so many inflationists out there are starring to PIMCO’s $10bln short position in Treasuries and saying “Look! Bill Gross thinks bond prices are going to crash. He must be expecting inflation!”
Wrong. Bill Gross most certainly is expecting bond prices to crash, but this does not mean that he is expecting inflation. In point of fact, if the Fed were to stop buying bonds, as Bill Gross seems to be expecting (thus an end to QE2 and no immediate roll-over into QE3), then treasury yields would have to rise, since they are being kept artificially low by the very bond buying being conducted by the Fed. However, to suggest that this alone means that we are going to get inflation shows a fundamental misunderstanding of what is going on right now in the bond market.
If the Fed were to continue printing money, but simply chose to monetize some other facet of the economy – say it decided to buy equities with QE3 – then bonds would undoubtedly crash and inflation would skyrocket. But the Fed is not going to do this. If the Fed does not engage in another round of quantitative easing, it not only means that it won’t be buying anymore US government debt, but also that it won’t be buying much of anything. This is deflationary.
Therefore, just as we have had inflation during a period of remarkably low bond yields, so too can we have deflation during a period of higher yields and lower bond prices.
Of course, there is also the possibility that an exit by the Fed from the bond market will only temporarily crash the market long enough for the economy to take a giant nose dive and send investors careening into short-term paper, once again giving a boost to Uncle Sam’s adjustable rate mortgage payments."
----
Nice, but the inflationistas"we'll all be wealthy beyond our imagination because we bought silver" will never buy this scenario.
Those "inflationists" (or realists, pragmatics, historians, etc) who converted all their paper holdings to silver on March 18, 2009 when the great reflation experiment started, probably are wealthy beyond their imagination two years later. Fed To Buy Treasuries It Prints To Fund US Deficit
I'm a realist and I have studied plenty of history. I recognize that currency debasement is real and that we will not escape it. However, this does not mean that you and I will be wiping our asses with the face of Benjamin Franklin by labour day weekend.
Also, I am a big precious metals bull, but I did not buy gold and silver only because I fear eventual hyperinflation. The real reason that I own these metals is because I have a growing mistrust of governments and the banking system. My concern has to do with property rights, not inflation. This is why I believe that gold and silver will do well. They are not liabilities. They are assets, and they are a store of value when value can be confiscated, not only through hyperinflation, but through a banking system collapse or government freezing your 401K.
Right.
Liabilities are promises.
And promises can be broken.
by DK Delta
on Mon, 05/09/2011 - 23:46
#1258016
hyperinflation is a loss of faith in currency and credit
by DK Delta
on Tue, 05/10/2011 - 00:47
#1258135
I am a big precious metals bull, but I did not buy gold and silver only because I fear eventual hyperinflation. The real reason that I own these metals is because I have a growing mistrust of governments and the banking system.
You know, I just realized that it's impossible to tell if those are breasts or a shaved nutsack.
I fear for you rich.
No way is the Fed going to stop buying US govt debt.
If they did stop, prices would collapse and yields would rocket up.
Bernokio won't let that happen, so yes, he will continue buying treasuries one way or another, directly or via proxies.
Fed buying US govt debt with newly created money pours that newly created money right into the economy, which is inflationary by definition.
Fed buying (worthless) securities from banks with newly created money credited to reserve accounts may not be inflationary by definition but it's inflationary by perception.
Inflation by definition plus inflation by perception is what precipitates a currency collapse, people simply losing confidence in the currency.
QE in some form will go on and on. Fed will keep buying US govt debt in some manner to keep the US govt operating. Fed will keep pumping money into stocks in some manner to keep stocks rising.
But it will precipitate a curency collapse sooner or later.
Until then people may enjoy impressive stock profits in nominal terms, but a currency collapse will erase those profits in real terms.
Ditto for PM buyers. People may enjoy impressive PM profits in nominal terms, but a currency collapse will erase those profits in real terms.
Stocks and PMs end up doing the same thing, preserving one's purchasing power in a currency collapse.
When could it happen? When could people's confidence in the currency suddenly collapse on a worldwide scale? Maybe when US govt debt reaches 100 trillion? Or 50 trillion? Or 25 trillion?
My guess is around 50 trillion.
Until then people's confidence in the currency is eroding slowly, why we're seeing food and gas prices rising slowly. About 25% - 30% per year now.
It doesn't matter what Bernokio thinks about inflation. It doesn't matter what "official" M2 is. It doesn't matter what "official" govt inflation numbers are.
Rising food & gas prices are what most people look at to gauge inflation.
This very scenario should mean that no one starting now will buy the Treasuries till such time as the Fed provides the announcement that they will buy again- QE3.
If i were to worry about the value of my T Bonds I would most certainly sell now, wait for the Fed's announcement of QE3 and then buy Treasuries again
So in essence your argument is that bonds will crash (we, and Gross, agree on that), and that once the next round of deflation destroys the equity market the Fed will not engage in another massive QE round, or as you put it "But the Fed is not going to do this" but will merely stand idly by, instead of doing everything it can (hint - infinite dilution) to debase the USD, and the trillions of corporate and financial debt that suddenly finds itself at well over 100% LTV?
Good luck.
I never said that the Fed would not engage in another round of QE. the comment "but the fed is not going to do this" refers to my statement that the fed is not going to switch its monetization of treasury dead to to equities or some other asset class.
Yes, I believe that the Fed will go into QE3, but not before panic takes hold in the marketplace and a new wave of deflation hits. This deflation will provide buying opportunities for assets that are in a long-term bull market like precious metals.
Also, the Fed is not as powerful as you make it sound. Yes, it can monetize, but the market is more powerful than any central bank, and a liquidity crisis can happen regardless of how much the Fed prints. We saw this in 2008, and I expect us to see this again, probably before the end of this year.
What do you base your decision on what the fed will and will not monetize? It better not be the prime example the BOJ which is monetizing ETFs and REITs. And QE1 was supposedly enough to prevent a $20 trillion credit exodus. And yes there will be another massive deflationary crush - something we have claimed size day 1. The result will be the final QE solution in which the Fed will risk hyperinflation to prevent the final deflationary collapse.
Because, I think the Fed monetizes just enough to keep the banking system profitable. I don't see how it would be in the interests of the banks to monetize everything under the sun, unless one believes that the ultimate goal here is to destroy the dollar in order to bring in a one world government and one world monetary union.
So, given what you just said, we are in agreement. You expect that cash is more than just a hedge against a treasury put. If there will be another massive deflationary crash as you say, then cash is the place to be ahead of this move, regardless of the longterm trajectory.
simple
Foreclose on everything you can.
Destroy the currency.
Sell assets you foreclosed upon using the new currency. Instant profit.
Never forget that banks don't buy anything or even provide the money for financing. They take the money from customer accounts to make loans. If the loans go bad, the bank owns the assets. If the currency goes into hyperinflation, everybody gets paid back, but the bank owns the assets they foreclosed upon.
yes. deflation risk then inflation risk. thats what the TRF is telling us. the timeframes for such is < 5 years. that is also what the TRF is telling us. but lets not just look at TRF. pimco have an extraordinary consensus process for moving the ship. im not a fanboy of them or their style but they seem to have HAD to move early on this strategy. must cost them a few percent which they are making up on the em paper.
And yes there will be another massive deflationary crush - something we have claimed size day 1.
Are you not confusing "deflationary crush" with "liquidity crush"?
If the Fed stopped monetizing tomorrow, it wouldn't reduce the money supply one cent, but would precipitate a liquidity crisis, exactly what happened in '08.
The US financial system must have a constant flow of new money from the Fed to keep functioning, keep buying newly issued treasury debt, keep stocks rising, keep the derivatives bubble inflated, keep Wall Street bonuses flowing, etc, since inflows of existing money are drying up.
Yes, Fed monetization in some form will continue, in order to prevent another '08 style liquidity crash.
And yes, the Fed may allow a(nother) little liquidity shock to remind Wall Street and Wahington how much they need that steady flow of new QE money.
But nowhere along the way will the Fed start clawing back any of that newly created money, hence no, there won't be any deflation in monetary terms. Falling prices during said little liquidity shock, yes. Monetary deflation, no.
I suspect Bill Gross anticipates that little liquidity shock fairly soon, where he'll jump back in with all 89 billion after the natural price collapse ...and make a boatload on his shorts.
The result will be the final QE solution in which the Fed will risk hyperinflation to prevent the final deflationary collapse.
Whether we see steady monetary inflation in the 25% - 30% range year after year or sudden monetary hyperinflation in the 200% - 300% range depends on how well people's confidence in the currency holds up.
And yes, Washington and Fed are lying their asses off trying to keep people's confidence up. Sheeple actually.
And many of those sheeple are gong to be destroyed financialy, either slowly via gradual currency debasement, or rapidly via sudden currency collapse.
And nobody knows when it may (will) happen, since it depends on people's collective confidence in the currency, which can change overnight.
Deflation is a contraction in money supply and credit. In a liquidity crisis, banks call in loans for fear of bankruptcies and so credit contracts
Deflation is a contraction in money supply and credit.
Agreed.
In a liquidity crisis, banks call in loans for fear of bankruptcies and so credit contracts.
You described deflation again.
Liquidity crisis is where money is not created and credit is not expanded.
In the context of QE, it would be stopping QE, which would create a liquidity crisis in the financial system because said financial system needs a constant influx of Fed QE money to keep buying govt debt, keep stocks going higher, keep the derivatives bubble inflated, keep those banker bonuses going, etc.
They can actually physically print oodlles of $100 bills, and give them to people cashing in bonds. there is no need to refinance the debt, print and hand out bills. Simple, very simple in helicopter terms.
Whatever it is Gross is holding his cash for, it's coming very soon. Flash Crash > Hyper Inflation
Last time I checked he only has to wait for 8 more weeks, which @ 5% inflation will only eat up $700mil, a small price for what he is expecting to make.
Just wait until The Gross announces he just bought $40 Billion of physical Gold and $40 Billion of physical silver.
Oh Sheisse!
The Gross, I love it!
All organizations have contingency plans. It's only fitting that the Fed being the largest organization has the most plans. What if the Fed's plan is to intentionally cause a bond panic driving prices to pennies on the dollar? That 15 trillion in national debt can be bought back for 150 billion. Sure the rest of the world will hate us. But, wait....
They hate us already!
And let me just point out a recent posting by Bill Bonner on the Daily Reckoning that makes the point for intermediate deflation:
Here’s our old friend Merryn Somerset-Webb, editor of MoneyWeek, on the subject:
Why you should hold cash
A long-term property bear told me this week that he was going to buy a flat. Why? He can’t bring himself to keep his money in cash when savings rates are 3%, inflation is 5% and income tax is 40%. But he can’t bring himself to buy much else either: most equities look overvalued; commodities could easily be on the edge of another cyclical peak; and there is only so much gold a man can hold. But his money “has to go somewhere”. And at least property offers some kind of yield.
I can see his points – holding cash in an era of negative real interest rates can feel painful. But what if it’s the least bad option? Dylan Grice of Société Générale points out that while it’s true cash “generally has a zero expected real return”, there is at least a “near-certainty around that expected return”. Mostly if you hold cash you know you won’t make money, but you won’t lose much either.
That’s not usually good enough. Most of the time, risk assets return more than 0%. So it makes sense to be biased towards equities, bonds, commodities, houses and wine instead of cash. But there are also occasions when risk assets are unlikely to return more than zero – times when the risk of losing money in non-cash assets is so high that it makes more sense to aim for a zero return than a real return. Now, says Grice, “might just be one of those times”.
Merryn is probably right. At least, that’s what we concluded at the Family Office too. The Bonner family holds an uncomfortably large amount of its portfolio in cash.
It is uncomfortable because we believe cash will soon be the very worst place to keep your money.
I feel the same way. With the exception of silver, that I bought more of at 34/oz recently, there is nothing out there that I want to buy right now. This is why I am heavy weighted cash, despite the fact that it feels like i'm sitting on a trap door.
My IRA is 50% cash, 25% PM equities fund and 25% personally selected individual PM stocks. I know it sounds like a lot of cash, but it allows me to take advantage of any shocks along the way. Guess what I've been doing latyelt :-)
PS
I own physical but not within my IRA.
And since it has been 2+ years since the staged rally this 100% means the Fed/White House/MSM talking points when the markets begin to tumble will be how "We are entering into a new recession CYCLE after years of recovery"
They must think they can continue to convince people of how natural these "cycles" are and that they are not the manifestation of the Fed. So who will be the scapegoat for the market collapse:
* Oil speculators
* China
*Middle East tensions
* Iran
* Greece/Finland/Ireland/Portugal
* The UnAmerican constitutionalists who are opposed to the debt ceiling hike
My bet is on the debt ceiling.Regardless the pain will be severe enough that the American Idolites will beg for the heroics provided the Printer-in-Chief.
tyler why dis a brother who clearly is not with the fed progam? so he makes some money betting against bonds and the fed. why is he a villian spell it out for me, please.
For my money (of which a large slice is in cash too) Gross may not be too sanguine about the effects that a Greek default, partial or otherwise, affecting any appetite for sovereign debt in any currency class. Yes, contagion would be "bad" and probably unavoidable, certainly within Eurozone. I doubt if many banks would remain unscathed, certainly not in Germany, France, etc., but is that 'default' actually bad for the currency itself? I don't think so -- not in comparison to how bad it is for any affected bank, group of banks; they're dead.
If your "cash" is on deposit with these entities, so are you too. Fortunately I have a big matress.
Gross looks to have it about right at this point in time. Why hold a long position in gov debt when it looks favourite for a dirt nap? Why hold agency debt if an undisclosed number of agencies could fail?
We've been too long in the thrall of Banksta Bullshit during this debt/liquidity crisis of their making. The BS of curing a debt crisis with more debt (trans: the taxpayer pays forever), but it looks like we're about to catch up with that can in the street.
..and someone's going to blink
i kind of agree in essence. people here seem to think that the TRF is tactical which it isnt. its a big boat and takes a lot of steerage (gross likes sailing metaphors). simple facts are that there is not enough out there for him to buy. having said that, his funds are out performing this year so he is getting his 'total returns' quite nicely.
He is not outperforming.
The appropriate benchmark is an international maturity and risk adjusted index overweighted in usa corporate.
He is probably average compared to the appropriate index.
Bonds are being propped up by Fed buying. When qe2 ends this buying will cease, bonds will collapse, rates will rocket and deflation will kick in: cash will be king. This is his bet, you morons.
A very bad bet.
when money is still created out of thin air via loans, and outstanding debt is astronomically high, almost unfeasible, the 'cash' that represents these numbers is _______ (not king).
More money is being destroyed than created!
May be due to ECB's panic?
http://www3.lastampa.it/economia/sezioni/articolo/lstp/401449/
Maybe every now and then some big shots, would it be to fly a little lower down, is not it?
Some whacky custom indicators, all intending on showing future direction, for awhile here i think equities up.
FF, ACT, PRS, VOS, ES breakout? all the usual suspects. Enjoy
http://oahutrading.blogspot.com/
Il me manquent des mots pour décrire ça qu'est-ce-que je sens et je pense.
How are y'all doing over there in Hymietown on the other side of the big pond ?
Still selling worthless paper with funny arbitrary numbers on it to anyone and his grandmother ?
Never forget: Money is liability.
Liability is promise.
Promise can be broken.
Don't blame me for this annoying term.
It was the highly revered Reverend Jesse Jackson in 1984 who coined this.
He also wanted to rob Mr. Obama of his manhood, so he'd have to sing one octave higher, as far as I know.
Call him a loose cannon, but he's calling a spade a spade.
A-hahahahaha !
Return of investment may very well outweigh return on investment.
It is time for a two percent penalty on delivery failures so game players, manipulators, and book talkers like Bill will be put in their place.
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