Bill Gross Calls It: "Bond Bear Market Confirmed Today"

With today's spike in Treasury yields, perhaps triggered by BoJ's taper, Bond guru Bill Gross has called the end of the 25-year bond bull market...

In a tweet via Janus Henderson, Gross signals the bond bear has begun...

Gross said last year that 10-year yields persistently above 2.4% would signal bear market.

He is correct that trendlines have broken but we have seen the occasional false-alarm breakout in the last 25 years...

10Y Treasury Yields...

5Y Treasury Yields...

Notably, the 'other' bond guru -Jeffrey Gundlach - has been flagging for higher yields for a while as copper has broken out relative to gold...



BullyBearish Ron_Mexico Tue, 01/09/2018 - 12:38 Permalink

let me see...

* higher cost of money (interest rates rising)...good for economy

* higher cost of energy (crude shooting up)...good for economy

* more global uncertainty (daily war warnings)...good for economy

* Equity valuations at all-time-highs


Where is the pin?  Is it going in, in, or already withdrawing as bagholders lining up to grab the big boy's bags of steaming $hit?

In reply to by Ron_Mexico

IH8OBAMA taketheredpill Tue, 01/09/2018 - 12:27 Permalink

"Bill Gross has been managing for what...25 years?"

And he still doesn't have a clue.  As the economy improves, rates will go higher, the stock market will climb.  UNTIL higher rates and inflation fears resulting in FED tightening the short end choking off the life blood of the economy causing stocks to crash and yields to reverse.

It's a repetitive story that is bound to repeat. Unless we get another "Obama like" president who doesn't know how to make the economy grow and instead sacrifices the economy to implement his idealism causing the FED to do QEs to keep the whole thing afloat.


In reply to by taketheredpill

LawsofPhysics Tue, 01/09/2018 - 12:01 Permalink

Okay, so that means interest rates on government debt is going up and all western governments are going to hard default?!?


sure sure... that book Billy!

Cutter Tue, 01/09/2018 - 12:05 Permalink

Those charts aren’t very convincing. Each time the yield touches the line it’s met an abrupt and precipitous decline, also timed with steep equity declines. So “breakout to where” is the real question. Going to 2.75 on the 10 year won’t be much of a breakout. 

taketheredpill Tue, 01/09/2018 - 12:15 Permalink

Who in their right mind would buy Treasuries here?

Without a doubt the absolute stupidest thing to do at this point would be to buy Treasury bonds.

We're all in agreement here, right?


Herdee Tue, 01/09/2018 - 12:27 Permalink

It depends on the printing press. The Fed and Treasury desks could easily screw a lot of people with a lot of printing yet to come. If you look at what David Stockman was saying you'll easily see trillion dollar deficits coming and the federal government has no way in hell to pay for it. Add in the tax cuts. It equals continuing deficits that are huge. Right now Trump won't allow a manipulated market to crash.

awadiwala Tue, 01/09/2018 - 12:48 Permalink

 Why Japan keeps buying US Treasury if US is serious about normalizing it Fed rates? It is all about Republican era and not Democratic one.

Spine of Ruprecht Tue, 01/09/2018 - 13:29 Permalink

Nah, Bill.  Still plenty of primary dealers to soak up the swill.  Really, how can a bid-to-cover over 2 be a problem?


Put on your reading glasses, Bill.  You just need to raise the trend-line a few BPS, 'is all.