Pimco Dumping All U.S. Bonds & Carl Icahn Returning $1.6 Billion to His Investors?????

Vanity | March 9, 2011 | Stayfree

[Stayfree]

If Bill Gross of Pimco dumps all U.S. bonds in his portfolio and Carl Icahn returns $1.6 billion to his investors, one might be a little concerned that the proverbial sh*t is going to hit the proverbial fan soon...any thoughts?

[runninglips]

I lived and worked in Watertown SD for a while. I was young and the coming winter scared me out of there. I went instead to Reno, fun, sun, dancing girls, water skiing, snow skiing....Loved it. If I would have stayed in SoDak, I would have been married. I was dating a girl whose daddy did not want me messin’ round with that. He actually hunted me down with a shotgun, cornered my butt and wanted to know my intentions. Tell you the truth, my intentions changed that day. He did a good job of keeping his “baby” pure.

[TruthConquers]

It does, but with these guys you have got to wonder. Is it just a headfake?

But copper did go down today, watch it on a long term chart to have a good historical feel for it. If it keeps dropping, he might be right. And look at 2008 to know what the copper crash looked like. I believe commodities were the first to fall before Lehman Bros fell.

And I am just a retail investor, I am no expert.

[screaminsunshine]

Duck and Cover!

[BornToBeAmerican]

Yep, and we fall, the whole world will fall with us. A very sobering thought indeed

[BornToBeAmerican]

Yep, and we fall, the whole world will fall with us. A very sobering thought indeed

[BornToBeAmerican]

Pray and mean it. Then relax and know that God is on our side.

It wont be easy. But this country is full of good people. The guns wont be used on people who need help, only those who want that is not theirs and try to take it.

America is a long way from dead. It will not die until the dream dies and it is a damn long way away from that

[piytar]

Respectfully, wrong. Gross manages a trillion dollars in bonds. He’s dumping US bonds because he sees what’s coming: complete economic meltdowm in the US. It’s inevitable now regardless if the GOP “works with” aka capitulates to the Dems. In fact, if the GOP does that, it will be worse (9th level of #### vs 7th). And they probably will...

[wardaddy]

i used to own Pimco...a private managed account as a hedge against equities

Gross is overrated....just my two cents and Ichan is a raider./p>

Gross argues against large deficit cuts btw.

He sold off US debt which was only 12 percent of his mutual funds assets

He did this over a period of time ending last week because he feared govt would stop their bond buying strategy ..which would lessen bond demand

we are in trouble but Gross. and Ichan are poor canary choices

[databoss]

I agree we just need to electorally rid ourselves of the liberal cancer that has infected our country and we can stand strong.

[chuckles]

I agree with your estimation of Gross and Ichan. The problem is when you say bad things about them, somebody always brings up the fact that they are rich and I am not. I haven't seen any genius in either one of them. Gross made many bad calls on finance shows on CNBC.

Having said all that, Gross is just following the rules. If you look at what's going on, preservation of capital is the first rule. We are printing money to pay debts,....always bad for bonds. We have world troubles,.......pretty much bad for bonds if it is inflationary.( like food and fuel). No agreement possible in Washington,...a 4.7 billion cut in the deficit,......get real. Even $60 billion from Republicans,....Not even a nibble on $14 trillion. There just isn't much good news or relief for the US debt. If you look at it just right, the bad economy and high unemployment is the only reason interest rates aren't 10% already. Gross may be anticipating a better economy coming and wants to swap directions.( I don't know if he shorts bonds or buys puts, maybe he is a one way investor). I would be interested if he has shorts or some other hedge in place of the longs he sold.

If you buy into the sour predictions, the best thing to do would be to ladder into some TBT. You can either buy or sell calls or buy the ETF outright. The TBT is an inverse bond ETF.

To play this option, I might buy some leaps out of the money and see if we start to have rising interest rates. If it moves 10%, buy a few more or move the strike price accordingly. If everything works out, you can bail out before you go to zero and you are levered so you don't have all your money tied up.

Now many here probably would say "I don't want to play when Wall Street is on fire and people are jumping out of windows", but if it gets bad enough that you have to kill rabbits to eat, your money won't be worth much anyway. We are talking about the total destruction of the current regime and America will be gone beyond repair. When we go bankrupt, contracts will be void and money will be re issued. Think of how it was in wars like in Viet Nam when they would issue new money bills and trash the old to thwart counterfeiting. The old dollar would be destroyed and a new one would be issued.

What we are doing is printing money to survive till 2012 and we get a new president and a new Senate. Listen carefully right now, pay attention,.......If we don't get a new prez and Senate, we are DONE! There is NO WAY we can fix the problems we have if we kick the can one more time. It will be VERY difficult even if we do change the government. We have spent so much money and have so mush debt, we will have to live frugally for decades and somehow raise our growth rate, an almost impossible feat with Americans used to sitting on their asses and watching TV while texting. We just don't work like we used to when I was growing up. I've been an optimist most of my life, but right now, I just don't hold much hope for the greatest system the world has ever seen. We have allowed too many idiots to enact too many idiotic laws to recover, IMHO. If we can't even agree to cut $60 billion in a $4 trillion budget, there isn't much hope. The killing part is most of the Dems will still get re elected. There are too many people that believe Obama has a "stash" of money to hand out. Try to imagine a $10 cut in Social Security to save the country. The politicians would be run out of town. If we won't even do that, there is no hope.

[Kartographer]

Those who wish may want to download my Preparedness Manual at:

http://www.mediafire.com/?zx5772aa15x6xga

[cranked]

...proverbial BS is about to hit the fan and we have a shitload of politicians in denial.....personally, the sooner this nation goes defualt, the better off we will all be.... =.=

[dila813]

You are focused on the trees but don’t see the forest.

Ask yourself, what is the trigger event? Why sell now?

That is the long term problem over the next 5-10 years, but what is the trigger event?

[silverleaf]

I may be wearing tin foil beanie, but I have the uncomfortable feeling sometimes the powers know something is coming (perhaps an asteroid or solar or gamma burst extinction event) and are quietly prepping for a small elite to survive by “hiding” massive amounts of spending on survival plans.

Maybe the article this week on the $1 billion govt order for dehydrated food and supplier shortages, plus this, got to me.

The massive irrational indifference to the middle east melt down, to the Chinese build up, to purposely using govt to stifle America from growing its energy and other industry, the baffling insane deficit spending and reluctance to deal with it “tomorrow” or after 2012, would be of no concern to someone who knew much of mankind and life as we know it wouldnt be around “tomorrow” or after 2012.

OK, back to watching “Deep Impact” again!

[dila813]

No Tin Foil Hat required.

These guys are all about timing. If they see a trigger event that can cause something to break two different ways, they bail. It is standard risk mitigation.

If you were going to go sky diving, you may want to get your life insurance and will in order. It doesn’t mean you are going to commit suicide, it just means you are hedging your bets.

[wardaddy]

that is exactly right...Gross is preserving his funds...he is worried that demand for US Bonds will fall...hell with interest rates so low they would have already except for us buying our own debt to keep the Chinese interested.

Gross has sold off before.

Ichan is an unethical man...but unlike his peers of the day he did actually manage a business he got stuck with ..TWA...and we know how that went.

You don't have to be rich to be smart about our economy. It is certainly an inexact science even for “smart and rich” folks.

I am not rich. If I was worth what I owed I might be at the threshold of independently wealthy. My wife and kids can enjoy that after I'm planted.

btw..Treasuries went up a hair when after Gross sold off..so go figure

Inflation worries me but more due to oil prices right now and the fact that one day when we do "recover" it will be inflationary...there is no way around it and owning sizable commerical properties...moderately sizable...I ain't Duke Realty or anything...but it is a gnawing fear for me when my numerous ballons come due...where will rates be? ...they are pretty low now...I think we will reel in our debt in time but it will take more GOP control...we already have that locally and it will come nationally next year...and we will thwart the entitled...I never knew the total scope these public unions have...I'm in the South...few Unions and right to work

I have never seen as many white liberals as I do on TV in Wisconsin and all these Unions up north. We had a Union rally and they bused in around 300 to Nashville a few weeks ago. New Orleans was the only Union hotbed in the South until Katrina

[piytar]

“Ask yourself, what is the trigger event? Why sell now?”

Good question. The mess in the Middle East? Maybe. Wierd thing about trigger events, though, it that they’re often something comparatively small. When circumstances are right — or rather all wrong — something comparatively small can set off a nightmare. Look at the shooting of Archduke Ferdinand.

I think circumstances are right — or rather all wrong...

[longtermmemmory]

OR PIMCO thinks interest rates are about to go up and they should pull out in order to be ready for the higher interest.

[chuckles]

With all the trouble in the world, I look for the dollar to rise and treasuries to be popular for awhile longer. The dollar is still the safe haven for whatever reason. The trouble with predicting is the market can remain irrational longer than I can remain solvent. But it( lower bonds, higher interest rates), will come, it has to. I was alive and trying to raise a family when Carter was in office. I know from inflation. Most voter today have no clue what it was like. I figured that out when people said Bush was our worst president. It's the same thing now. High unemployment and high inflation. All we need is the interest rates to get the trifecta that almost killed America. Oh, and don't forget the gas lines. I had an odd number on my license plate.

The problem with Keynesian's is they can't ever figure out why it's not working. They will drive us right into the ditch and then set it on fire and still lecture us that we need MORE debt and HIGHER taxes to get us out of trouble.

I did hear today a theory that Pimco thinks the market is about to take off so he will switch to equities from bonds, but that's just idle rumor. I still can't figure out why we are at 1300 S&P anyway, let alone go higher. I've NEVER been this depressed in my 59 years as I am now. The problems are tough and we have idiots in charge. If you figure the math, we ran up $220 billion in 28 days in February, so multiply that times 12 months and we will be north of $2 trillion deficit this year vs $1.6 trillion last year. We are arguing over $50 billion. I'm just sick. Maybe we could elect a home schooled 6th grader to balance the budget cause the Harvard grads don't seem to be able to get a handle on the zero's. In my household, cutting is not the problem, getting more income is the problem. Cutting is just saying "no".