"Battling Brains" at PIMCO Must Be Sweating Bullets

Last weekend The Los Angeles Times featured a story about the war room discussions at PIMCO.  Now with over $1 trillion under management and bonds teetering, the pressure must be huge to start chasing equities and other risk assets.

http://articles.latimes.com/2010/apr/04/business/la-fi-pimco4-2010apr04

Mohamed "Sugar High" El-Erian must be chugging down some Red Bull, trying to figure out how to maintain the Total Return Fund champion returns this year, as bonds are under pressure and the relentless march in equities continues unabated.

Imagine sitting in your office, overlooking Big Canyon golf course and Fashion Island, contemplating what could happen if fixed income tanks.

Wonder if El-Erian might have to cave in, and fire all those highly paid market strategists and install a phalanx of 19-year old trading robots who just sit all day, stare and motion on a screen, and chase whatever is going up and short whatever is going down.  Sure would save a lot of time and money.  And instead of leading these 3-hour strategy meetings, El-Erian could take some long lunches and enjoy a stroll at the mall and admire all the silicon Barbie figures milling around.

Same old boring story today.

Uninterrupted meltups in banks, REITs, rental car companies, etc.

Of course, the fastest movers today were the REITs with the absolute worst business prospects:

Another new closing high for the Russell 2000.

And it is still nearly impossible to try to find any shares available to borrow.