The blue line in the chart below? That's the total holdings of Government (cash and derivative) securities of PIMCO's flagship $293 billion Total Return Fund.
[9]
At a net exposure of 40% of total fund [10]AUM, or roughly $117, PIMCO has not been more bullish on Treasury and Agency securities since July 2010, when Gross was selling into the QE2 Jackson Hole preannouncement panic. It is so bullish that it used some $23.4 billion of cash on margin to buy said bonds! It is also the first time since the summer of 2010 that the fund holds substantially more government-related securities than MBS.
Why is this notable? Because moments ago, Gross used his now favorite public service announcement medium, Twitter, to announced that...
Gross: The secular 30-yr bull market in bonds likely ended 4/29/2013. PIMCO can help you navigate a likely lower return 2 - 3% future.
— PIMCO (@PIMCO) May 10, 2013 [11]
Indeed it can: by buying even more Treasurys that those who sell into the most recent transitory "great rotation" out of bonds, now that the "bull market is over", sell.
Remember: always do what they do... not what they say.
And just in case the bull market in bonds did not end on April 29 (hint: it didn't - because the Fed is still monetizing some $45 billion in TSYs every month, and will have to buy increasingly more from the secondary market as primary issuance slows down if indeed the US deficit funding and primary bond issuance slows down), Bill will be happy to buy increasingly more, and likely bring the total allocation to TSYs to record highs in the next month or two.
At which point he can once again tweet about the death of the bond market... Just as PIMCO prepares to sell much more debt to a Federal Reserve which is unconstrained by such old-school concepts as cost basis.