Bill Gross

What FIFA Can Teach Us About Overpriced (And Overhyped) Stocks

Buildings make a statement about their owners. FIFA-Hauptquartier seems to be saying: our owners have a boatload of cash... and in a world where heavily-manipulated stock markets are constantly achieving all-time highs, the message from the 'market' is just as full of it as Blatter.

A Generation Of Rate-Hike Rookies Makes Jeff Gundlach Nervous

Rates have been so low for so long, that many of the traders who will be on the front lines if and when the Fed ever does decide to start down the long path to normalizing policy have never, in their professional careers, seen a rate hike. “The experience that many investment operations have with rising rates for most of us is very low for some it’s nonexistent," Jeff Gundlach warns.

5 Things To Ponder: Is The Stock Market Rational Or Nuts?

Like Houston, the financial system has been flooded with liquidity over recent years which has ultimately only had one place to flow - the financial markets. That excess liquidity has sent prices soaring to record highs despite weakting macro economic data. While many hope that the Central Banks can somehow figure out how to keeps the rivers of liquidity from overflowing their banks, history suggests that eventually bad things will happen. Of course, for investors, that translates into a significant and irreperable loss of capital.

Bill Gross: "My 'Short Of A Lifetime' Bund Trade Was Well Timed But Not Necessarily Well Executed"

Bill Gross just revealed another aspect of trading in the new (or any) normal: one may get the direction and the timing with laser-like precision (as Gross did on his Bund trade), but if said trade is excecuted in a way where the inherent "coiled spring" volatility of the Gross-defined "new normal" blows up the trade structure, the losses will make one wish never to have had the correct idea in the first place.

Frontrunning: May 12

  • Bonds Extend Global Rout as Europe Stocks Slide, Dollar Weakens (BBG)
  • Verizon Communications to Buy AOL for $4.4 Billion (BBG)
  • Fresh Nepal earthquake kills dozens, triggers panic (Reuters)
  • Sen. Shelby to Unveil Legislation Heightening Fed Scrutiny (WSJ)
  • Bill Gross: The Amount of Money I'll Give Away 'Is Staggering, Even to Me' (BBG)
  • U.S. rejects notion that Gulf rulers snubbing Obama summit (Reuters)... what about AIIB?
  • In Asia, Debt Market Gets Tougher (WSJ)
  • Iran’s Mahan airline defies sanctions in shadowy aircraft deal (FT)

Bursting Bund Bubble: 2 Charts And Some Lessons From History

As investors and traders ponder what’s next for the financial world’s safe haven asset par excellence, and as everyone from the world’s most famous bond traders to the ECB tries to comprehend how the market could have possibly become so thin so fast, we bring you a bit more in the way of visual proof that central planners have become the world’s greatest bubble blowers as well as a bit of history that may hold clues as to what's next.

Frontrunning: May 7

  • Fed’s Yellen: Stock Valuations ‘Generally Are Quite High’ (WSJ)
  • Britain's dead-heat election 'down to the wire' on polling day (Reuters)
  • European Markets Roiled by U.S. Fed Chief Janet Yellen’s Comments (WSJ)
  • Stocks Drop With German Bonds to Extend $2 Trillion Global Loss (BBG)
  • Oil heads toward 2015 highs despite ample supply (Reuters)
  • Wary of bond 'cliff,' Fed plans cautious cuts to portfolio (Reuters)
  • Saudi Arabia mulling land operations on Yemen border (Reuters)

There Will Be No 25-Year Depression

The good news is that there will be no 25-year recession. Nor will there be a depression that will last the rest of our lifetimes.

The bad news: It will be much worse than that.

Crowning A New Bond King: Vanguard Fund Overtakes PIMCO For Bond Throne

No one stays on top forever, and to be sure, when Bill Gross' long reign at the top of the fixed income universe finally came to a sudden and rather unceremonious end last October, the race to lay claim to the inevitable outflows from PIMCO's Total Return Fund was on. Now, a winner has emerged — and it's not Jeff Gundlach.

Ben Bernanke: On The Way From Hero To Zero?

It seems yet another hero of the recent cyclical bull market, resp. echo bubble, may be in danger of falling from grace. This has already happened to his predecessor Alan Greenspan, who has been gradually demoted from “Maestro” to “irresponsible bubble blower”. In this sense the somewhat less praise-laden verdicts that are lately emerging with respect to Ben Bernanke could be seen as an early warning sign.

Bill Gross: "This Is All Ending"

When does our credit based financial system sputter / break down? When investable assets pose too much risk for too little return. Not immediately, but at the margin, credit and stocks begin to be exchanged for figurative and sometimes literal money in a mattress.” We are approaching that point now as bond yields, credit spreads and stock prices have brought financial wealth forward to the point of exhaustion. A rational investor must indeed have a sense of an ending, not another Lehman crash, but a crush of perpetual bull market enthusiasm.

Bund-Battering Continues - It's Different This Time

10Y German bond yields hit 42.5bps today (almost a 10x move off their 4.9bps lows on April 17th - before Bill Gross and Jeff Gundlach unleashed their bearish theses). While Draghi keeps buying, the move over the last week is 'almost' unprecedented in bond market history. We says 'almost' because we have seen this before - a sovereign issuer with an extremely low yielding bond suddenly see their bond market collapse... Japan 2003 (when Greenspan cut rates less than expected).

Bund Sell-Off: It's The Supply Stupid

One of the biggest stories of the week has been the great German Bund route as everyone’s new favorite short has sold-off hard on what HSBC calls a “cascade of small events [which has] created a large splash in a structurally ever-thinner mkt, similar to UST flash crash of Oct. 15.” Amid the cacophony of explanations emanating from every credit and rates strategist on Wall Street, BNP is out with a simple suggestion: it’s all about the waxing and waning of supply.