Wednesday, September 15, 2010

Big bet, wonder which bookkeeper took that lol

Pimco Makes $8.1 Billion Bet Against `Lost Decade' of Deflation

Bill Gross’s Pacific Investment Management Co. made an $8.1 billion wager that the U.S. won’t suffer a decade of deflation like the one that crippled Japan starting in the 1990s.

Posted by mark @ 02:21 PM (1588 views)
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10 thoughts on “Big bet, wonder which bookkeeper took that lol

  • Of oucrse, others on here, who don’t have that sort of money will still tell you we are on a defaltionary path… coz they know better.. ha ha

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  • So does that mean the US will get inflation?

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  • Perhaps he knows they intent to print and print and print….

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  • When you read stories of unfathomable sums of money being used like this, it really shouldn’t suprise anyone that the people who bailed out this industry want to go on strike to protest against cuts which are necessary because of that bailout. I’m no unionist but I reckon riots are well overdue.
    And cotton prices – wtf is that all about? Are cotton farmers raking it in with these record prices? Nope. Will clothes get more expensive? Yep. Are the traders making a killing? Yep.

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  • 2. hpwatcher said…”Perhaps he knows they intent to print and print and print….”

    I wonder why gold is soaring. My $1600 exit is getting closer.

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  • fallingbuzzard says:

    @2, I’m sure they just bet the premium on the other end of the scale.

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  • 1. debtfree

    I guess you can’t argue with the professional traders who singled out United Airlines and American Airlines.

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  • mark wadsworth says:

    Japan.

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  • correct answer mr w

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  • According to Reuters: PIMCO had an AUM (Assets Under Management) figure of $1 TRILLION as of January 2010.

    So $8.1 BILLION is LESS than 1%. Organisations that size back both sides of the seesaw in order to hope never to appear to have been caught out. Yes, they have asset allocation algorithms and so on to make it look professional. Of course, this does make it very hard to discern where these head honchos have put the bulk of the money. For example: these days any leaks/ releases from Goldman Sachs are often seen as contrarian indicators – i.e. profitable positions to play against! Welcome to the poker game with smoke and mirrors.

    The reason the Japanese have managed to do what they have done (thus far) is mostly that a high proportion of the population are big time savers who have tended to put their money into JGBs (Japanese Government Bonds) thus the debt is largely internal to Japan. The western countries are not going to be able to go the Japan route even if they want to – we haven’t saved and we barely do save so the bond perspective is more volatile for the UK and the USA.

    The western countries have a choice between austerity and sovereign default. Furthermore if we don’t get on with austerity then the other WILL happen. Once you total up the various forms of rarely mentioned debt in this country along with public debt then you see figures like 420% of GDP for the UK. Puzzled, try looking at £1 trillion of unsecured debt held by private citizens as an hors d’oeuve.

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