This page has been archived and commenting is disabled.
US Regulators Fear "Runs" From PIMCO's Systemic Risk As Outflows Soar To 12.5% Of Assets
Things are rapidly shifting from bad to worse for PIMCO. In a triple whammy this morning, Bloomberg reports the Total Return Fund ETF (managed previously by Bill Gross) has suffered $446 million outflows (or over 12.5% of assets) so far; Morningstar downgrades the fund from 'gold' to 'bronze' citing "uncertainty regarding outflows and the reshuffling of management responsibilities"; and perhaps most concerning - given our previous warnings over bond market illiquidity - The FT reports, US regulators are monitoring trading and fund flows surrounding PIMCO's Total Return Bond fund warning investors they should contemplate the unintended consequences of pulling their money and the possibility of systemic risk disruptions, fearful of "runs."
First outflows are accelerating...
- *PIMCO ETF GROSS MANAGED SEES RECORD $446 MILLION OUTFLOW
- *PIMCO TOTAL RETURN ETF OUTFLOW REPRESENTS 12.5% OF SHARES
And Then...
Morningstar, the influential mutual fund research group, stripped the Total Return fund of its “gold” analyst rating late on Monday, downgrading it to “bronze” because of the “uncertainty regarding outflows and the reshuffling of management responsibilities”.
And on top of that, as The FT reports,
US regulators are monitoring trading and fund flows surrounding Pimco’s $223bn Total Return Bond fund and other products, in what could prove a test case in the debate over whether asset management groups contribute to systemic risk.
Officials at the Securities and Exchange Commission, the Federal Reserve and the US Treasury, among other bodies, have been talking to industry executives and other investors and warning they should contemplate unintended consequences of pulling their money from Pimco.
...
It also warned that large funds might be subject to “runs” if investors believe there is an advantage to pulling their money first, and it suggested regulators gather more data to test the concerns.
* * *
»
- 13593 reads
- Printer-friendly version
- Send to friend
- advertisements -
He who sells first... sells best.
So if I held PIMCO assets, I could withdraw them and be part of the catalyst that blows up the system?
I would be honored too.
Outflows Soar To 12.5% Of Assets
I would have thought a little more.....gonna have to redo the math on this.
it's a bit misleading...not 12.5% of the 200+ bln Total Return Fund, 12.5% of the Total Return Fund ETF.
A little bait and switch for you.
"He who sells first... sells best."
For you to be able to sell someone has to buy.
Is that a black swan i see?
Oh yeah, and for the record the Fed Reverse RP today totalled 300bln @ 0%...bids ranged from +.05% to - .20%, 407bln total bids.
"US Regulators Fear".....
When US regulators have the balls to do their job, i'll consider giving a rats ass what they have to say
The FT reports, US regulators are monitoring trading and fund flows surrounding PIMCO's Total Return Bond fund warning investors they should contemplate the unintended consequences of pulling their money and the possibility of systemic risk disruptions, fearful of "runs."
Ah, well, then, clearly PIMPCO is TBTF. Time to buy!
PIMP-co got the runs. Too much white chocolate!
Not as long as the Fed is buying.
That is a lot to swallow.
maybe they will just spit instead
Lemme in here:
Congrats Billy. Please, allow me...
PIMCO IS FUCKED SIX WAYS TO SUNDAY.
THAT IS ALL...
It's the Quiet Riot before the Storm.
As noted by Yours Truly on 8/29 (5159976), He who panics quietly first, panics best.
p.s. I exited quietly already. Into USTs, Cash, select blue-chip stocks across the globe, PM, RE and Prep-stuff. Now I can sleep and live life.
"A little bait and switch for you."
Also disingenuous is the "Previously managed by Gross". Silly me, I had assumed that the whole point of ETF's is that they are NOT managed??
Tell that to the Fed.
You are thinking of passive index ETFs. PIMCO's BOND is an active ETF and so is managed.
Even index ETFs have to be managed to a certain extent, though. A small ETF (ie low AUM) tracking a large index couldn't possibly own every bond in the index. The "passive" manager would still have to choose which securities to own.
Hank Paulson was on Bloomberg Financial Propaganda Vision this morning ordering the New York Federal Reserve to implement Goldman Sachs' pre-drafted plan to make unlimited U.S. Taxpayer fiat/debt available to PIMCO effective immediately, lest their be "tanks in the streets," F22s in the New York City skies, and Martial Law in American Cities by tomorrow morning.
Jon Corzine, Paulson's co-guest, wholeheartedly agreed, as did co-guest Chuck 'Screw Flyover Country/Wall Street is the Center of the Universe" Schumer, as well as co-guest ex-Federal Reserve Bank of New York President, Timothy 'Keebler Elf" Franz Geithner.
They let Corzine back on the TeeVee already? Well, fuck me. Wonders never cease.
*resumes drinking*
What no Benie Madoff?!
A panel like that is not complete with out Bernie.
An American, not US subject.
i heard it was tanks in the skies and f-22 in the streets. maybe i need to adjust my tv
I actually went looking for the source. Guys keep in mind there are folks here that are just waking up to the ponzi. Posting shit like this has the potential to fuck up our mornings.
I just did my part.
This whole thing was probablty put in motion specifically because PIMCO is so huge and now they are barfing up precious collateral that others are desperate for. Everyone thinks they are doing backdoor QE, well detonating the biggest bond shop in the land may be exactly that.
If you are dumping your PIMCO fund you are aiding the cause.
This is indeed the irony of it all. Bill Gross was in fact forced to play along with the Fed. Now he's being forced out and folks are mad that he is holding all the "AAA paper".
The idiocracy of modern finance and arrogance of these criminals at the top of the Keynesian pile of shit is simply amazing.
It think it was Hemmingway who pointed out that great people are often vunerable because they have character and integrity and often tell the truth.
Glad you are still around Fonz. Business is still booming, really enjoying the cheap diesel prices...
It's good to talk to you guys too. I like the am crowd here. Always did.
Likewise, I have to run, but in my mind the REPO/reverse REPO activity says it all. The collateral shortage in the west is accelerating, in so much as these fucks even understand or recognize what real collateral is...
I have to oversee the remaining pear/peach/apple harvest today. It's late in the season and most of this fruit will end up in brandy, but it's time to clean the trees and area up, treat for pest post-harvest etc. etc.
Please, no collateral shortage. All the CBs have to do is change collateral requirements (cough ECB cough) -- and wa-la
Aunt Jamekia can do a 400k 120% sup-prime note on her two temp part times jobs and her C1 bullshit is now accepted as 1:1 collateral.
all fine an good as long as your trade partners still accept that paper.
"full faith and credit"
Banks in Germany are financing 120% of RE purchase price to allow the buyer extra funds to "invest" in renovations. Mortgages @2.5% for 15 years are common.
You guys need to speak more so dumbasses like me can learn more stuff.
This little convo here just told me something I overlooked(guess I didn't read that blackrock article either)
Interesting. I was suspecting there was something going on given PIMCO's sheer size and the term of Gross' tenure there.
Do you think they just flat ran Gross out of the office and created this shitstorm to disgorge its assets via redemptions?
Diesel is actually CHEAPER (by about 15 cents at last fill up IIRC) at the station down the street where I live in AK. Given the energy content vs gasoline, I was curious as to why. Demand off that much? Don't think I recall seeing that before and I asked my Dad who is retired in AR and he said it has been a very long time.
Regards,
Cooter
It's a large balance sheet, with numerous state pension $$$$.
makes sense to me in this "everything is centrally planned, gravity is outlawed shit-show"...
i thought they only had mules in arkansas. that must be missouri.
Interesting view. The icing on the cake is that Pimco is now foreign owned. Nab the collateral and screw the foreign competiton at the same time.
I dumped my Pimpco yesterday from my 401k.
My FIRE contacts are seeing mortgage funding rise for select people and select properties.
It's... Paper looking for Safe(r) Harbors.
Many of us rode PIMPCo up ahead of and during the 2011 (May 2011-May 2012) Fed bond buying binge, I don't know many that hold such pimco shit now.
Aside from the usual state pension plans...
"the usual state pension plans..."
aka Dumbest Money
...and unfortunately the most likely to get a bailout from the taxpayer...
Where does the tax payer get its money from?
One government contract or another.
Precisely, everyone is "on the dole" in the modern world...
doesn't mean that real assets don't exist.
Please, the "taxpayer" is irrelevant, trade is not.
How long would it take to burn a pile of fiat commensurate with the Federal Reserve's balance sheet? The size of that pile is commensurate with the Fed's treason in disintemediating Congress/will of the voters in allocating Federal funds. AFter it all blows up and the gibbet has been erected, I am counting on the Fed banksters being particularly 'juicy'. Here, I hope 'gibbet' refers specifically to a guillotine.
Me too!
"... the fund from 'gold' to 'bronze' citing"
So, why is a gold rating more important than Gold?
Morningstar ratings sucks! They, too, are great at predicting the past. If I remember correctly, they had AIG, Bear Sterns, Lehman, Wamu, etc. all rated as 5 Stars right before the 2008-09 financial crisis. Right after the bankruptcy and the collapse, they updated their research report to state the obvious. And people pay them subscription fees to read anal-cysts' reports and make investment decision based on them. Fucking snake oil salesman... all of them.
Nothing quite like having the "runs". LMFAO Banks will be the real acid test.
Is Bill Gross the vaunted "Black Swan" ??
I like "He who sells first"...has a buyer.
In the modern world, he who sells first will preserve the most capital...
Bond market collapse bitchez.......
Clearly the correct response to this problem is to outlaw selling.
If a single entity ends up owning the entire "market", there really isn't any need for such a law.
Just to be on the safe side: I'd outlaw the word semantically too, you know, just order Webster's to withdraw it and act as if it has never existed.
They could even apply this same solution to other embarrasing words and concepts: saving, gold, Edward Snowden... The list is endless. Besides, who needs that many words to communicate?
You could pretty much reduce all actions to two words. Some days they Herp, while others they Derp.
Gross: make my day
So what. The Fed will just buy it on the cheap, push this market up another 500% and sell it to the servs in all due time.
yes, further destroying what little is left of a "legitimate bond market"... "winning"
It's becoming more and more clear to everyone around the world, the criminal families never went to jail and are still running the show.
Again. get long black markets and sharcropping, beat the rush.
Regulators? You mean people that only accept that things go up in value - manipulators perhaps a better term?
The Fed will wait a week or two, see how much is needed and invent enough to cover it. Buy any fucking dip, momma is coming to save us all again!
Well your momma gave you lovin, your momma held you near, well baby momma can't do nothin, baby momma just aint here. Oh you can pretend all you want to, that won't work no more, no you can't look back for tired, Yeah you tried that once before. Why worry about your mother, why worry about your brother.
"Mother, do you think they'll drop the bomb?"
Hasn't there been like $70 billion in outflows before he left Pimco, why the fire drill now??
Bill Gross leaving, as whacked out as he is, leads to a lot of uncertainty, and nobody wants to own a high profile fund like this when there is this much uncertainty surrounding it.
I see this as simply the continuation of "everything the Fed touches is turning to dust", full faith and credit and all that...
Wamu!
In future, Pimpco will be bloviating about their expert TEAM of managers who emphasize internal CONSENSUS as critical components to their investment and allocation process. Fuck the rigged financial system. Unfortunately, the Fedcoats have disintemediated the will of the voters via QE and not having to get Congress to sign off on spending for things like MRAPS for police depts, automatic rifles for USDA employees, etc. I'm all in on the hard reset, and as the system gets more absurdly fragile, it might be a single 'star' bond fund manager leaving that brings down the house of fiat.
So, you're presuming there is a "future" in the market?
I applaud your optimism.
I'M HAVING...CHEST PAINS!
My plumber never did turn up.
Maybe he is tits up?
That's terrible Dru. I called 3 for quotes and two showed up and both discounted their quotes. Trying to pay the rent I guess.
Damn, wish I had some Assets I sure would liquidate them!
Can we short PIMCO?
Let's all short a 1/2 mill on margin.
Then with profits, we’ll buy gold on COMEX and request delivery.
But gosh, if we all bought gold at the same time, fleeing from that nasty, nasty, meaningless paper, wouldn't the price of gold skyrocket?
The regulators are going to gather more data? That should alleviate any concerns.
"...gather more data..."
Yep, that oughtta do'er.
That's what "they" were doing on the Goldman tapes, right?
So, I'm glad they got right on it.
446 Mil in liquidations in a 60 Trillion dollar market, yawn!!!!!!!!!!!!!!!!!
The money is just going from one bond fund to another.
Does the 60 trillion$ count the unfinished HFTs.
Or the derivatives, which if I remember correctly, have failed every time they are redeemed..
I sure there's a accounting meme in there somewhere that is not available to me, for re-re-re-hypothecation.
I just had the runs ....that too went down the bowl .....
Gross looks like Richard Petty
$446 Million what is that like an hour of FED Money printing....if only it was the butterfly effect.
Nah...
More like 4 seconds of keystrokes and maybe the click of a mouse.
Looks like the ETF 'Strategy' works against them.
"US regulators are monitoring trading and fund flows surrounding Pimco’s $223bn Total Return Bond fund and other products, in what could prove a test case in the debate over whether asset management groups contribute to systemic risk."
The FED is a systemic risk.
Hmmm, stripped of it's "gold" analyst rating down to bronze, didn't even bother stopping at silver.
There has to be a conspiracy in there somewhere.
Next week comes the dreaded rusty cast iron rating.
Now, wait a sec...
"Officials at the Securities and Exchange Commission, the Federal Reserve and the US Treasury, among other bodies, have been talking to industry executives and other investors and warning they should contemplate unintended consequences of ..."
Isn't this the tribe that got the US $12 trillion in debt, pays its bills by counterfeiting, turned the major US banks into 40-trillion-in-derivatives-debt gambling casinos, allowed the rigging of the LIBOR rate, launders Mexican cartel drug money, and bails out foreign Rothschild banks with US taxpayer dollars?
Better to get your financial advice from a back-alley Chicago crack ho.
Sorry, Mr. Bill, but whatever you do, you're going to have an accident...
https://www.youtube.com/watch?v=cRJE2n3qjrY
I'm still "comtemplatin/figurin" on how that ex bankster that shot himself with a nailgun 6 times and was classified a suicide by way of workplace violence.
He who escapes first, escapes best.
First of many supposed Black Swans to come.
So, you're saying that Bill fellow was first?
I meant escape from PIMCO. Difficult to say who is the first well-known dude to bail out, but Bill immediately joined yet-another financial casino.
"fearful of "runs.""
I don't know what there is to fear.
Before I liquidated a self directed IRA in 2010, I had been front, back, and sideways runned irrespective of market/profit/economic fundementals that had worked/increased my pot for 11 years. I survived with my base intact. Which was "moar" to me.
it's nice for us regulators warning bondholders not to sell it might start a run, were just trying to help you.
though the same regulators sit and watch porn as billions of your dollars are invest into a manipulate market.