PIMCO Officially Goes SHORT The US Treasury Market

The Business Insider ^ | 04/11/2011 | Joe Weisenthal

[taildragger]

Last month bond giant PIMCO officially abandoned Treasuries completely.

[taildragger]

In the meantime, its chief Bill Gross has been warning of a US debt default, while wondering who would stick around to buy Treasuries following the end of QE2.

Well, now the firm is getting even more aggressive with its stance.

It's gone short the Treasury market, according to its latest holdings (via Zero Hedge). Specifically, 3% of its portfolio is bet against Treasuries.

Given how vocally negative Gross has been on Treasuries, this stance can't be a huge surprise. Still, the fact that the world's largest bond manager -- which has made a fortune riding the great bond bull over the years -- is short US bonds is a huge turn. That this comes amid such anxiety over the Federal debt also raises the stakes.

[taildragger]

The question begs, who is pulling Obama towards ( at least in words ) towards fiscal Sanity, Paul-Ryan / The Tea Parties, or the Bond Market via the likes of Mr. Gross.....

I remember a book about the Insides of the Clinton Machine and at one point DerSlickMyster quipped something to the effect, you mean we have to pedal to keep the bond market afloat and ( Brokerage Firm Name).

[Why So Serious]

I would be careful with this information. I believe that we are going to see higher treasury prices from now into June. One small thing may change this, and it is not Bill Gross. If he sold his entire treasury holdings I would say the market took it pretty good. The market will go up faster when he wants them back than it down when he sold them.

The guys sponsors the Bond Hour and then gets on there to talk. ridiculous!

[ButThreeLeftsDo]

Click The Pic

[Uncle Miltie]

Shorting Treasuries is an audacious statement, if not an audacious bet at 3% of the portfolio.

Gross is right. He’s become the century’s first major Bond Vigilante. Events that could prove him right include:

1) Rating Downgrade of U.S. Debt, causing a massive sellof, increased interest rates, and reduction in T-bond values.

2) Outright pro-active default by the U.S. Government.

3) A run on U.S. Bonds by the Rest Of the World to get out of them before they collapse; sort of a run on the biggest bank in the world.

Any one of these could essentially happen in a 24-48 hour period. If any one of them actually occurred, the results would be devastaing for Treasury Bonds, Bond Holders, the U.S. Government, and America generally.

The probability if each has increased dramatically under 0bama, and so Gross has a responsibility to protect his investors from these massive risks. He’s doing a good job, and nobody else is willing to point to the elephant in the room.

[RexBeach]

I’ve been short Treasuries for more than a year.

Time to get paid.

:)

[Eric in the Ozarks]

I’ve yet to be dissapointed with PIMCO’s Total Value Fund.
They’ve gotten big by making the right calls...

[library user]

Too bad this got moved out of breaking news. It’s very, very important.

[Uncle Miltie]

"If he sold his entire treasury holdings I would say the market took it pretty good"

Pimco sells off all its Treasuries

"Who will buy Treasuries when the Fed doesn't?" Bill Gross asked last week in his monthly missive. Yesterday the co-founder and chief investment officer of Pimco answered, by saying "not me."

Pimco, the world's largest bond fund, sold off all its government-related debt from its flagship fund.

Read more: http://www.nypost.com/p/news/business/pimco_sells_off_all_its_treasuries_UVnug3Z8hxAVkAq4J3vpDP#ixzz1JENvDuvh

Post Wire Services

Last Updated: 5:01 AM, March 10, 2011

Posted: 12:47 AM, March 10, 2011

Separately:

[kabar]

Stock market up 41.

[LiveFreeOrDie2001]

Ok, so what do “we” put our investment $$$$$$ in...???

[RexBeach]

If inflation is on the way, historically, the best sectors to be in are: technology, materials, energy and industrials.

If you think that interest rates are going to go UP, there are a number of ETFs that will allow you to profit from rising rates.

There you go!

-Rex

[The Duke]

Few things in life are more significant than when one puts one’s money where one’s mouth is.

[agere_contra]

Physical silver.

[OB1kNOb]

IMO, this is the second shot across the bow that Gross has fired on Obama and the Treasury in the past month, yet as big of a red flag as it indicates to me regarding the future of the Treasury bond market, from what I see, it doesn’t appear to garner much reaction in the stock and bond markets. What am I missing? Is it just being quashed by the biased media from getting the attention it deserves or does the opinion of the world’s largest bond fund just not hold that much importance in the market?

[OB1kNOb]

world’s largest bond fund manager

[taildragger]

IMO, this is the second shot across the bow that Gross has fired on Obama and the Treasury in the past month, yet as big of a red flag as it indicates to me regarding the future of the Treasury bond market, from what I see, it doesn’t appear to garner much reaction in the stock and bond markets. What am I missing? Is it just being quashed by the biased media from getting the attention it deserves or does the opinion of the world’s largest bond fund just not hold that much importance in the market?

I think it maybe neither, and that is not a hit on you. I hate to say it but the American Public is so devoid of all Econ/Acctg schooling and are lacking critical thinking skills to get that this is a hint. For those in Rio Linda they maybe stupid.

G-d Help Us...