PIMCO’s Bill Gross Tweets: ‘Today Is A Santa Claus Rally! Prepare 4 Record Cold Winter, Solstice Upon Us’ … ‘US Is Not An Island’

Bill Gross: Enjoy The Santa Rally – The Hangover Is Coming As “US Is Not An Island” (ZeroHedge, Dec. 20, 2011):

Just tweeted from the bond titan who is getting more and more concerned about those asset management fees in a world in which fixed income is increasingly becoming risk free, courtesy of central planning, until Gresham’s law unwind destroys everyone.

Source: Twitter

Bill Gross Has Record $60 Billion Short Cash Bet Fed To Proceed With MBS Monetization

Bill Gross Has Record $60 Billion Short Cash Bet Fed To Proceed With MBS Monetization (ZeroHedge, Dec. 12, 2011):

Following the release of its November fund statistics, Pimco’s Total Return Fund has once again reaffirmed it is betting on imminent QE by the Fed in the form of MBS monetization, a trend it started two months ago as we pointed out. And with a record $60 billion short cash position, or 25% of the entire fund $242 billion AUM, they better be right this time (he did the same thing in Jan-Feb… that did not work out too well). It is amazing to consider that back in April, Gross was long $90 billion in cash: a $150 billion swing! The TRF’s 43% holdings of MBS is an increase of 5% compared to October, the most since December 2010, but still just half of the 86% held in February 2009 in expectation sof MBS monetizations by the Fed as part of QE 1. Just as notable is the near record effective fund duration, which at 7.46 was the second highest ever, just a modest drop from the 7.58 in October. What is most curious is that Gross, for the first time as far as our records go, is completely out of the 0-3 year maturity range. Which makes sense: after all the Fed has telegraphed there will be no money made in that band of rates until mid-2013, a deadline which will likely soon be extended.

Read moreBill Gross Has Record $60 Billion Short Cash Bet Fed To Proceed With MBS Monetization

PIMCO’s Bill Gross Sends Out Big Apology To Investors, And Then Declares That The Economy Is Doomed

- Bill Gross Sends Out Big Apology To Investors, And Then Declares That The Economy Is Doomed (Business Insider, Oct. 15, 2011):

Funny, just yesterday afternoon we pointed out the irony of nobody caring about the fact that Bill Gross had loaded up the boat on the long end of the yield curve, a gamble that obviously meant one thing: He sees no growth or inflation ahead — essentially an economy that’s doomed.

Well….

Now he might get more attention, because he just put that in writing.

Dealbreaker (via ZeroHedge) put up a special letter from Gross to his investors titled, simply Mea Culpa.

Read morePIMCO’s Bill Gross Sends Out Big Apology To Investors, And Then Declares That The Economy Is Doomed

PIMCO, The World’s Biggest Bond Fund, Expects Greece And Other European Economies To Default – Allianz Global Investors Capital: Greek Default ‘Inevitable’

Greek cabinet approves austerity budget (Telegraph, June 22, 2011):

Pimco, the world’s biggest bond fund, shrugged off last night’s vote of confidence in the Greek government warning that it expects Greece and other European economies to default on their debts to resolve their problems.

“For the next three years, we’re going to see different economies work out different problems. For European economies, especially Greece, it would be through default,” Mohamed El-Erian, chief executive of Pimco, said in Taipei on Wednesday in a video conference.

“Nothing has been done to enhance growth,” he said. “No single (Greek) indicator has shown strength. They are afraid a restructuring would hurt European banks.”

However, he doubted a Greek default could trigger another global financial crisis: “Ireland, Portugal, Italy and Spain would have to be involved. But Greece is too small in terms of economic impact.”

Horacio Valeiras, chief investment officer of fund firm Allianz Global Investors Capital (AGIC), predicted that Ireland and Portugal, countries that also received financial bailouts in the wake of the global credit crisis, will have to restructure their debts.

“We are not investing in Greece, Ireland, Spain and Portugal,” he said at the press briefing. He sees default in Greece as “inevitable”.

California-based Pimco (Pacific Investment Management Company), is based in California and is the world’s biggest bond fund manager with nearly $1.3 trillion in assets under management.

How Goldman Sachs Created the Food Crisis

Don’t blame American appetites, rising oil prices, or genetically modified crops for rising food prices. Wall Street’s at fault for the spiraling cost of food.



Demand and supply certainly matter. But there’s another reason why food across the world has become so expensive: Wall Street greed.

It took the brilliant minds of Goldman Sachs to realize the simple truth that nothing is more valuable than our daily bread. And where there’s value, there’s money to be made. In 1991, Goldman bankers, led by their prescient president Gary Cohn, came up with a new kind of investment product, a derivative that tracked 24 raw materials, from precious metals and energy to coffee, cocoa, cattle, corn, hogs, soy, and wheat. They weighted the investment value of each element, blended and commingled the parts into sums, then reduced what had been a complicated collection of real things into a mathematical formula that could be expressed as a single manifestation, to be known henceforth as the Goldman Sachs Commodity Index (GSCI).

Read moreHow Goldman Sachs Created the Food Crisis

PIMCO’s Bill Gross Is Now Short US Debt, Hikes Cash To $73 Billion, An 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).

Read morePIMCO’s Bill Gross Is Now Short US Debt, Hikes Cash To $73 Billion, An All Time Record

‘Skunked’: Bill Gross On How ‘The U.S. Will Likely Default On Its Debt’

Captain Obvious strikes again.

More from Bill Gross:

PIMCO Total Return, The World’s Largest Bond Fund, Dumps All US Government Debt Holdings

PIMCO’s Bill Gross: US Treasuries Are Not Safe And ‘Most Overvalued’ Bonds

PIMCO’s Bill Gross: ‘No Way Out’ of Debt Trap, US Living Standards Doomed to Fall

PIMCO’s Bill Gross Asks The $64,000 Question: ‘Who Will Buy Treasuries When The Fed Doesn’t?’ His Answer: ‘I Don’t Know’; Gross Is Getting Out Of Risk


In a letter focusing on what has been well known to Zero Hedge readers for about two years now, Bill Gross’ latest investment outlook does the usual attack of Beltway stupidity (as if Congress is in any way competent of making math-related decisions – they do what Wall Street – that’s you Bill! – tell them to do, and you know it), emphasizing the impossible math of total US entitlement liabilities (on a net present value basis), which Gross estimates at $75 trillion. That Gross conclusion is predetermined from the onset is not surprising: “Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation and low to negative real interest rates.”

Then again, that America is bankrupt is not really news to anyone. Neither is it news, that Gross, as we first reported, no longer has any US bonds to dispose of. What will be news is the inflection point at which Gross starts purchasing Treasuries once again. And after all with $220 billion in AUM in the Total Return Fund, what else will he do: hold on to cash? Buy Netflix? Then the only question will be how Gross spins the inevitable capitulation of the re-hypocrisy trade, validating that he, in a narrow sense, and PIMCO in a broad one, is perhaps the biggest cog in the very system that Bill spends so many hours writing letters about and complaining against. But yes, even that won’t be all that surprising to us. After all, in this bizarro world absolutely everything is now priced in.

From PIMCO

Skunked

  • Medicare, Medicaid and Social Security now account for 44% of total federal spending and are steadily rising.
  • Previous Congresses (and Administrations) have relied on the assumption that we can grow our way out of this onerous debt burden.
  • Unless entitlements are substantially reformed, the U.S. will likely default on its debt; not in conventional ways, but via inflation, currency devaluation and low to negative real interest rates.

Read more‘Skunked’: Bill Gross On How ‘The U.S. Will Likely Default On Its Debt’

PIMCO Total Return, The World’s Largest Bond Fund, Dumps All US Government Debt Holdings

The greatest financial (and economic) collapse in world history is well on its way.

The bankster bailouts, stimulus package and unprecedented deficit spending have caused the ultimate bubble and it is ready to burst.

This is the Greatest Depression.

See also:

Muni Bond Market ‘To Go Down By At Least 15 To 20%, ‘By The Time All Muni Shoes Drop It Will Look Like Imelda Marcos’ Closet’

PIMCO’s Bill Gross: US Treasuries Are Not Safe And ‘Most Overvalued’ Bonds

PIMCO’s Bill Gross: ‘No Way Out’ of Debt Trap, US Living Standards Doomed to Fall

TrimTabs Finds Social Benefits Are Equal To 35 Percent Of All US Wages And Salaries

Egon von Greyerz of Matterhorn Asset Management: ‘A Hyperinflationary Deluge Is Imminent’, And Why, Therefore, Bernanke’s Motto Is ‘Après Nous Le Déluge’

With $5 Trillion In US And European Funding Needs Over The Next 3 Years, How Long Until The Global Monetization Tsunami Hits (Again)?

Bill Gross’ decisions look certainly like common sense, BUT his ‘perfect timing history’ is pretty odd and he must be trading on insider information.


(Reuters) – The world’s largest bond fund has gone ultra bearish on the United States, dumping all of its U.S. government-related debt holdings.

The move by Bill Gross’s $236.9 billion PIMCO Total Return fund completed last month comes in the wake of a vicious Treasury market sell-off and just days after he questioned who will buy Treasuries once the Federal Reserve halts its latest round of bond purchases in June.

Gross, who also helps oversee a $1.1 trillion investment portfolio as PIMCO’s co-chief investment officer, has repeatedly warned against U.S. deficit spending and its inflationary impact, which undermine the value of government debt and push up yields as investors demand more compensation for risk.

Over the last five months, worries over the ballooning U.S. budget gap estimated at $1.645 trillion for 2011, political stalemate in Washington over how to narrow it and inflationary fears have all contributed to a steep sell-off in Treasuries. The benchmark 10-year note has seen its yield, which moves inversely to price, rise more than one percentage point since early October to 3.46 percent by Wednesday’s close.

Gross expects further carnage. Just last week, he told Reuters Insider that a 4.0 percent yield for 10-year notes is a “rational expectation” if the Fed “disappears as the buyer of last resort.”

Read morePIMCO Total Return, The World’s Largest Bond Fund, Dumps All US Government Debt Holdings

Muni Bond Market ‘To Go Down By At Least 15 To 20%, ‘By The Time All Muni Shoes Drop It Will Look Like Imelda Marcos’ Closet’

DoubleLine’s Jeff Gundlach appeared on CNBC earlier, and among other things, the muni market was discussed. It appears that the fund manager whom many consider to be roughly in the same ballpark as Howard Marks when it comes to fixed income investing is very much in Meredith Whitney’s camp when it comes to his outlook on muni market prospects.

Asked by Faber if he believes that munis are ultimately going the way subprime securities did, Gundlach responds “If by that you mean lower, the answer is yes. If you mean crashing, I am agnostic on that.” And for all those who love taking out their actuarial tables and their historical default data to refute what is simply common sense, Gundlach has a few words as well: “I don’t think you need to know what the default rates are going to be, or need to know how low low is, munis are going to go down.

There are going to be other shoes to drop. There might be so many it looks like Imelda Marcos’ closet when all the shoes drop because all the states have to deal with this stuff.… Between here and the endgame lies the valley and the valley is full of fear. And I think the muni market is going to go down by at least 15 to 20%. At least.”

As for Kaminsky relentless advocacy of munis, this time coming out with the always disingenuous “hold to maturity” defense, Gundlach simply made a mockery of that whole spiel: “You know what the definition of an investor? It is a trader who is underwater. People say they hold to maturity until they get scared and sell. It gets scary when the prices start to drop. The fear factor here is going to be palpable.”

Read moreMuni Bond Market ‘To Go Down By At Least 15 To 20%, ‘By The Time All Muni Shoes Drop It Will Look Like Imelda Marcos’ Closet’

PIMCO’s Bill Gross: US Treasuries Are Not Safe And ‘Most Overvalued’ Bonds

Treasuries “Most Overvalued” Bonds, Bill Gross Says: Beware End of QE2

This week marks the 2-year anniversary of the 2009 stock market bottom, but there’s little celebrating among retail investors. General speaking, individual investors fled from the stock market in 2008 and 2009 for the perceived safety of the bond market, a trend which didn’t abate until late 2010.

But with yields rising and concerns mounting about budget deficits at all levels of government, the question begs: Are bonds still safe?

If by “bonds” you mean U.S. Treasuries, the answer is a resounding “no”, according to Bill Gross, founder and co-CIO of PIMCO, which has about $1.2 trillion of assets under management.

“The Treasury market typifies perhaps the most overvalued area of the bond market,” Gross says.

In the accompanying video, Gross discusses the theme of his most recent monthly strategy piece: “Who will buy Treasuries when the Fed doesn’t?”

Specifically, Gross worries about the end of the Fed’s QE2 program, slated for June 30. “If someone has been buying $1.5 trillion worth of Treasuries and now doesn’t buy $1.5 trillion worth of Treasuries, it’ll affect yields on the upside.”

‘D-Day’ for Debt

Read morePIMCO’s Bill Gross: US Treasuries Are Not Safe And ‘Most Overvalued’ Bonds