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Bill Gross Sells $30 Billion In Treasurys In August As Total Return Fund Cuts Government Exposure By Over A Third
While others were buying TSYs in the month of August on hopes of frontrunning the central printer, and expectations that Bernanke's NEW QE announcement will lead to even more flattening in the curve (even though as we explained there is only $650Bn in free 10-30 year private sector inventory available in the entire market), Bill Gross, via PIMCO's flagship Total Return Fund, was busy selling. So busy in fact that over $30 Billion in US paper was dumped to unwitting investors, resulting in the move wider by the 10 Year paper which at auction earlier today priced at a multi-month high yield. As a result at the end of August, PIMCO's total Treasury exposure was just 21% of total AUM, the lowest since August 2011. And what did Pimco do with the proceeds? Nothing - it merely satisfied its margin cash position, which plunged from -18% to -6%.
Why did PIMCO sell? Fears of inflation, as can be seen in the attached chart of holdings duration, which dropped across the board, sending the TRF effective duration to the lowest it has been since May 2011, ot 4.21 years.
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Print me a river!
Long Cash the interest rates will be rising in the 80's you could make 20% on a money market
WTF on VIX120919P14 ???
Anyone?
If Bill would only follow through with what he know's is best, complete the trasaction and buy physical gold!
The Fed will not print more because inflation is finally arriving, which means game over for the bull market in Treasuries, except if we have a big knee-jerked scare on Spain, than short more Treasuries. Staglflation is coming slowly, thank you Bernanke, you did good this time. We need inflation, Krugman is correct.
I guess Gross isn't buying into the Bernanke Ponzi.
It reminds of that saying that men go crazy in herds but come to their senses one by one.
Gross recognizes that the Fed has managed to create inflation, so no more need for QE, the beautiful deleveraging of stagflation is starting.
inflation. China/India bond markets have collapsed.
Oh MY LORD! Really!?
money talks, bull shit walks.
Fuck you Ben
But the Bernank can stop inflation in 15 minutes.
I suppose -- in the same way that the mountain can stop the goddam plane.
Chuck Niorris can do it in a millisecond!
What happens to LT Treasury yields when the Fed runs out of ST stuff to twist?
They print new ST stuff.
I don't see "cash substitutes" on this graph ... am I looking in the right place?
You mean Ben's Barbarous Relics or these "Cash Substitutes": http://www.youtube.com/watch?v=7GSXbgfKFWg ????
Whatever you say bro. +1 green arrow up up up
[edit: I meant 'money substitutes' in the first comment. I hope that perfect ass of yours forgives me]
oh yeah, its all good...i just wanted an excuse to post that clip.
{JimCarrey's expression is so serious/funny when the guy is about to open the suitcase. He is so proud of what he's done. I think Bernanke must look like that each time he hits [ctrl-p] & prints up another suitcase full of IOUs.}
Would someone put a muzzle on that "Tweetaholic" Gross, already.
As the FED bangs the living shit out of the SPX at the close.
Seriously. Give it up. Stop trying to pretend this is, in any way, worth discussion.
Time to short treasuries?
I guess that he isn't free to use the cash to buy silver or gold.
what happens if they don't print?
dust off your Dow 10k hat
I have a 10K beanie, will that do?
"Why did PIMCO sell? Fears of inflation...."
Yes.........but did he buy Gold?
That's the only question that counts.
<When exclusively US Treasury mutual funds try to change their prospectus to allow them to buy Gold the top will be in.>
Yes, he is and is urging other investors to do the same.
yes he is a gold buyer
Maybe Bill got the word that gold will now be an offical teir one asset. Now this could be fun!
I Ben wonder who Ben bought them Ben....Ben
I wonder, did this guy ever make money over the past two years?
Yes!
His total return fund (when adjusted for the Dec 2010 dividend/cap gain distribution) has indeed made money.
CD,
Here is the one I jumped in back in 2009 -PTRAX.
http://stockcharts.com/h-sc/ui?s=ptrax
Better to look here so you don't have to get fooled by capital gains distributions:
http://quote.morningstar.com/fund/f.aspx?t=pttrx
2% under the rate of inflation. (Jan 11- 10.65% to Sept-2012-11.5%) I'm being generous./ and sarcastic ;-)
In a fight between Bill and Ben, I'll bet on Ben every time.
Fight? If you mean like a Harlem Globtrotter "fight", then you are right.
Bill would bet on Ben as well. He said word for word a few days ago on BBG radio "Don't fight the fed or the ECB"
Long flower pots.
Ray Dalio talks to the CFR, presider: Maria Bartiromo
http://www.cfr.org/business-and-foreign-policy/conversation-ray-dalio-video/p28984?cid=rss-economics-a_conversation_with_ray_dalio_-091212
He could have summed it up with "We canz print money, Spain and Italy can't, we win!"
I have to go back and finish watching it, that one point about money printing really got to me.
I totally agree with this point re reference to debt/spending: "We've made a lot of promises we can't keep." Also his discussion on who exactly is buying our debt and what we can expect from them is spot on. All in all, good link. Thanks, Chaco.
Thanks for the link. Dalio is worth listening to.
I guess we'll see if BG is a Muppet Master or not...
Bill Gross has indeed been buying gold, and urging others to buy real assets instead of paper foo-foo. There've been several articles about it including on Forexpros.
I'm not necessarily a Bill Gross fan, but what is it that makes the buyers of his holdings "unwitting investors"? Like, is there some sort of conspiracy going on that only Gross knows about or were those words chozen just to paint this piece with some sort of "spin" to suit an agenda? I ask this with full respect of course, but in my humble opinion whoever bought that $30 billion worth of bonds from him in August had better know what the fuck is going on or somebody's likely to fire 'em. If they're really all that "unwitting" perhaps they should be employed in a different profession like maybe working for the SEC or maybe a congressman or a game show contestant or something. Just sayin'.
Inflation is coming and so the relief for consumer, capital will start to be destroyed (bonds and stocks), and the move to stagflation is on. The consumer will use the higher amoutn of nominal dollars to repay his debt faster, and hte companies will be forced to pay higher wagers, the share of gain to consumer will increase, the share to capital decrease, and stock and bonds will suck in real terms, and commodities will rise nicely. The corporate margins have peaked and will suck from now on. This is a good outcome, this is a beautiful deleveraging and hte Fed is fucking the capital providers in the ass. Don t bash Bernanke, he is fucking up the stock and bond holders, helping the guy deep in debt and helping the redneck with his little savings in Silver to take a revenge on capital owners who thought they could endlessly push up consumption through consumer debt leverage and at the same time lower costs by offshoring to china which was repressing wages. That was unsustainable, you can not have the capital providers be endlessly fatter and fatter and the consumer skinnier and skinnier.The reason is that in the end someone has to buy the products, or if you will, Aaple could sell its iPhone 5 to Samsung and Samsung sell its Galaxy IIIS phone to apple, but that would be total PONZI. THat can not work, so up to now the corporation have accumulated fat and cash, the beginning of disaccumulation of fat of corporation is starting with Bernanke jacking-up prices and forcing wage inflation. Inflation hurts the guy with the savings, but hte consumer has none, he has debt, people deep into debt always benefit from inflation. Don t bash Bernanke , he is trying to create wage inflation, and trying to fuck the bond holder and equity holder while making them believe he is their friend.
THANK YOU BERNANKE THIS TIME. /NO SARC.
"Forced to pay higher wages" - With unemployment still high and your congress total owned, corporations won't be "forced" to do shit. NO SARC.
That would work really really well if we had unicorns to ride to work and except for the following reasons:
- The US economy does not exist in a vacuum. The global flow of cash and assets will go to the line of least resistance, and this includes wages. The line of least resistance is not the US economy nor the US unit of labor. There is a lot of foreign capital flowing into the US, yes, but the primary investments are not in labor. Its just a unit of the total investment picture. If it gets too expensive or cannot deliver, the flow of foreign capital will go elsewhere.
- Bernanke is the friend of equity holders and bond holders. Bennie loves Wall Street and does not appear to be ruffled by the disconnect between Wall Street and Main Street. Do you really believe that of the trillions he has spent/created so far, any of it was designed to immediately provide relief to labor, unless of course you are talking about Wall Street bankers as 'labor'.
- Just because a specific corporation or bank has their HQ in the US does not mean their 'fat' is dedicated or in any way attached to the US. The A made an asston of money primarily because their 'fat' went to other labor markets to create their products, then sold it here and in other parts of the Western economy. When you look at the wealth and health of a particular corporation you have to, must, also view where they generate their most cash, where they save production costs. It isn't in the US.
Wage inflation, I fucking wish! I am paying nearly $4/gal for gasoline, a pound of apples (not iCrap, I mean actual apples), depending on the variety is between $2 and $4, and that means roughly 2 apples--who even prices apples per pound except bullshit fucking grocery chains who have completely deserted the consumer as far as offering value, but that's a side issue--the point is, the hidden inflation is seeping out of the cracks, and I'm sorry Frito Lay, but you can't take one more chip out of an empty bag, you fuckers!
Try to find a good set of used tires. They ain't there. There are new, and flat-ass bald. New tires are outrageous. Take a look at your local classifieds and look for firearms. Those aren't there either. Lot's of massages, but no one is selling their hardware. Come to think of it, I haven't seen any long-yield bonds, either. Hmmm...
Wow did MDB change his name? This is a hilarious post. We all already know the people doing the right thing are getting screwed. I guess your parents will now live with you when the Fed steals all of their savings.
Gross is grossly over used as an authority on bonds. I think James Grant is vastly smarter and more viable as an information source. Gross is only interested in saving his own butt.
Gross may very well be interested in saving his own butt, but his total devotion is to making money. James Grant rocks. Even when I'm disagreeing with him I still have to smile while watching him. He's a rare bird, a national treasure. I never miss him when he's on CNBC. The look on the commentors' faces is priceless when he lets loose on them.
James Grant - The bond market is a desert of value: http://www.bloomberg.com/video/88249154-james-grant-says-bond-market-is-desert-of-value.html
Well sure he did. Bill didn't want to have to spend to change the name on everything from business cards to coffee mugs to The Total Loss Fund.
Bill Gross Sells ......Treasurys
Me too. And though Bill is not always right, anymore than the next monkey throwing darts a board, there is something satisfying about knowing you front ran him.
I have some 401K money is Pimpco's Total Return Fund. The thing is a total joke--it's all junk bonds. But it doesn't matter because the whole world has been downgraded to junk bond status. I don't know why people bother investing or even worrying about this shit anymore because one day the whole fucking mess is going to zero.
Fool me once, shame on you. Fool me twice...
Looks like the same shift that happened when he got caught by surprise in Oct. '08. This time he's ahead of the curve. Bright guy.
PIMCO was pimping gold on Bloomberg TV, he had a Sterling Stamos Moment.
http://www.bloomberg.com/video/gross-gold-a-better-investment-than-bonds-stocks-67gICY2RTwy3MytiYpX8jg.html
Hmm, funds are selling USDs now, Gross sells USTs, holds cash. As the QE3 is delayed till end year, Oct (after terrible company earnings profits slaughter stocks).
The momo idiots are hedging on the continued stock rally and USD selling, will be decimated. The moves in stock selling (futures) is the above UST selling.