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interestrateripoff

Exclusive: Bill Gross Is Now Short Us Debt, Hikes Cash To $73 Billion, An All Time Record

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http://www.zerohedge.com/article/exclusive-bill-gross-now-short-us-debt-hikes-cash-73-billion-all-time-record

A month ago, Zero Hedge first reported that Bill Gross had taken the stunning decision to bring his Treasury exposure from 12% to 0%: a move which many interpreted as just business, and not personal: after all Pimco had previously telegraphed its disgust with US paper, and was merely mitigating its exposure. This time, in another Zero Hedge first, we discover that it is no longer business for Bill - it has now become personal (and with an attendant cost of carry). In March, Pimco's flagship Total Return Fund (TRF) has now taken an active short position in US government debt: -3% on a Market Value basis (or $7.1 billion), and a whopping -18% on a Duration Weighted Exposure basis. And confirming just what PIMCO thinks of US-related paper is the fact that the world's largest "bond" fund now has cash, at a stunning $73 billion, or 31% of all assets, as its largest asset class on both a relative and absolute basis. We repeat: cash is more than PIMCO's holdings of Treasurys and Mortgage securities ($66 billion) combined. To paraphrase: in March PIMCO was dumping everything related to US rates (see chart below). This is the first net short position that PIMCO has had in Government-related debt since the Great Financial Crisis of 2008, and going positive in February of 2009 only after it became clear that the Fed would commence monetizing US debt one month later. This is the closest that Gross has come to making a political statement and is now without doubt putting his money where his mouth is. The only event that could possibly derail Gross' thinking is a huge market crash forcing a rush to Treasury safety. Alas, as has been made all too clear recently, US debt is no longer the safe haven it once was. Which begs the question: when will the TRF break out a "gold" asset holdings line item.

Although isn't he merely betting his own clients money here?

Edited by interestrateripoff

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http://www.zerohedge.com/article/premarket-summary-inflationary-hysteria

One word (well technically two) can describe what is going on in the electronic pre-market arena right now: inflationary hysteria. Gold is at a new record, wheat is surging, corn is at highest since 2008, crude at a new 30 month high, silver is at $41.10 - a new fresh post Hunt high, beans surging, etc, etc, etc. Essentially everything is bid, following news first reported on Zero Hedge that PIMCO is betting the farm that either inflation is about to go parabolic and force bondholders to dump everything, or that the Fed will have no choice but to pursue another round of QE, sending gold to $2,000 and unleashing the Weimar endgame.

The Fed is going to print again it has no option current market euphoria is down to funny money cash, if it stops printing the next crash happens.

Plus if it doesn't print what is the US govt going to do for money?

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the world's largest "bond" fund now has cash, at a stunning $73 billion, or 31% of all assets, as its largest asset class

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Does that compute?

He is hoarding cash because he thinks inflation is going to go parabolic?

Im shorting the BoE by holding cash too.

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Surely this means the man is holding cash because he anticipates, soon, a massive crash in assets thereby allowing him to buy back into those asets cheaply.

Is that not the only reason for an investor to hold cash - especially a boy with 73 billion in the piggy bank?

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I'm just holding it because Mr Bean told me to spend it. I've always been contrary. When he tells me to save I am going to spend it on a house.

Im great at spending money...not so hot on collecting it back though....like many mewers and Governments,

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Does that compute?

He is hoarding cash because he thinks inflation is going to go parabolic?

If you think that the inflation expectations implicit in long term treasury yields are going to increase materially in the short term, it does make sense to sell now and buy back later.

Pimco have proven to be pretty good market timers in the past even though I think that Bill Gross is a shameless user of the media to "scare" the market into vindicating his positions after he has taken them.

An additional factor might be political. With the change in control of the lower house (from the Democrats to the Republicans), there is less political will to manipulate the market and undertake more QE which could cause Treasuries to fall in price (rise in yield) to more accurately reflect the US's actual credit risk.

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Gross is a shameless user of the media to "scare" the market into vindicating his positions after he has taken them.

An additional factor might be political. With the change in control of the lower house (from the Democrats to the Republicans), there is less political will to manipulate the market and undertake more QE which could cause Treasuries to fall in price (rise in yield) to more accurately reflect the US's actual credit risk.

I think that in the US, with an election campaign for 2012 about to get underway, that lots of US politicians are waking up to the Bernanke saying that there is no inflation whilst people on Main Street USA are suffering the same inflation woes as us.

Unlike us, the US is more vocal in protesting over such things and there are increasing numbers of protests weekly in many US cities.

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If you think that the inflation expectations implicit in long term treasury yields are going to increase materially in the short term, it does make sense to sell now and buy back later.

Pimco have proven to be pretty good market timers in the past even though I think that Bill Gross is a shameless user of the media to "scare" the market into vindicating his positions after he has taken them.

An additional factor might be political. With the change in control of the lower house (from the Democrats to the Republicans), there is less political will to manipulate the market and undertake more QE which could cause Treasuries to fall in price (rise in yield) to more accurately reflect the US's actual credit risk.

It's not like politicians use the same tricks to try and convince everyone everything is AAA OK is it?

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I think that in the US, with an election campaign for 2012 about to get underway, that lots of US politicians are waking up to the Bernanke saying that there is no inflation whilst people on Main Street USA are suffering the same inflation woes as us.

Unlike us, the US is more vocal in protesting over such things and there are increasing numbers of protests weekly in many US cities.

I think that it was Marc Faber who recently said something along the lines of : There is rampant inflation everywhere in the world except in the eyes of the Fed.

His blog is always amusing / scary / prescient / insane depending on one's views :

http://marcfaberblog.blogspot.com/

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It's not like politicians use the same tricks to try and convince everyone everything is AAA OK is it?

Agreed.

There seems to be a high level of correlation between corruption and the ability to access the intended audience through the media.

This applies equally to politicians, bankers, dictators, large corporations, "star" athletes and entertainers etc.

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I think that it was Marc Faber who recently said something along the lines of : There is rampant inflation everywhere in the world except in the eyes of the Fed.

His blog is always amusing / scary / prescient / insane depending on one's views :

http://marcfaberblog.blogspot.com/

The Fed has planned inflation, it's a trade war with China. The gamble is the US economy will be less screwed than the Chinese one in a high inflation environment.

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An additional factor might be political. With the change in control of the lower house (from the Democrats to the Republicans), there is less political will to manipulate the market and undertake more QE which could cause Treasuries to fall in price (rise in yield) to more accurately reflect the US's actual credit risk.

Greedy politicians holding out for a larger bribe.

Like their budget last week, it must have been bungalific as the deadline drew closer.

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It doesn't say who's cash he's holding. If he's holding US dollars then it's clearly a bit of a logic fail.

I think Bill sees a lot of trouble brewing for the EZ. Spain recently issued a denial they were in trouble which has probably set the clock ticking toward a summer bailout. We are in awful shape with our private debt the worst in the world so no one is going to be spending much here soon. Even though I am now in £ getting ready to pay for my house in cash--I am still holding $ in my LT savings accounts as I foresee some major trouble ahead this side of the Atlantic.

What Bill sees is proably more to do with a series of IR hikes when it is not good to be holding bonds. I liquidated most of my PIMCO funds earlier this year.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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