Skip to comments.PIMCO (biggest bond fund) Dumping All Treasuries, Bringing "Government Related" Holdings To Zero
Posted on 03/09/2011 12:27:54 PM PST by gregd0180
And many thought Bill Gross was only posturing when he said he is getting the hell out of dodge. Based on still to be publicly reported data by Pimco's flagship Total Return Fund, the world's largest bond fund, in the month of January, has taken its bond holdings to zero (and -14% on a Duration Weighted Exposure basis). The offset, not surprisingly, is cash. After sporting $28.6 billion in "government related" securities, TRF dropped to $0.0, while its cash holdings surged from $11.9 billion to a whopping $54.5 billion (based on total TRF holdings of $236.9 billion as of February 28). This is the most cash the flagship fund has ever held, and the lowest amount in Treasury holdings since January 2009 before it was made clear that the Fed was going to adjust QE1 to include Treasurys in addition to Mortgage Backed Securities. PIMCO's Treasury holdings peaked in June 2010 at $147.4 billion and have declined consistently ever since. And while we expected that the spike in MBS holdings (at times on margin) was indicative of an expectation that QE3 would monetize mortgage backed securities, the ongoing decline in that asset class now leads us to believe that Bill Gross is now convinced there will be no QE3 at all, at least based on his just putting his money where his monthly pen is! And if Bill Gross, the most connected person to the upcoming actions by the Fed, believes there is no more quantitative easing, it is really time to get the hell out of dodge in all security classes - bonds, and most certainly, equities.
Note the plunge in Treasury holdings in the chart below (blue line), offset by the surge in cash (dotted pink line). Time to panic.
(Excerpt) Read more at zerohedge.com ...
Rest assured, Obama, Bernanke and other DC elites in both parties are going to make sure their families are insulated from the consequences of their actions.
You must be mistaken - Rachel Maddow was on Letterman singing the praises of the stimulus!
LOL! Well people need to keep watchin Obama TV because it supports him.
Yeah yeah I know Fox-Al Waleed is our friend and Ma Kettle loves TCM because they show the old Jimmy Cagney films. Obama TV we love you.
Something smells here.... Like a few insiders who know QE3 is on the horizon and want to ride the bogus equity bubble a few hundred points higher? These crooks are manipulating the country as we know it into oblivion....
Would someone kindly translate this into english and advise?
If there’s no QE3, isn’t that a *good* thing?
Would you dump PTRAX into cash? Or hold it and hope that Gross isn’t intentionally leading everyone off a cliff?
Dodd, Frank, Freddie Mac, Fannie Mae...
We all knew this had to happen . . .
Nothing to worry about. Just the potential for crushing deflation and the halt of all U.S. commerce.
Interest rates are going to start rising rapidly...Treasuries are the latest bubble and it’s popping...
‘Tax Free Municipal Bonds’, is the question; When you’ve got to support big government and pay back the investors, what gives first?
So we'll have deflation instead of inflation now? Gosh, that's swell. Ain't life a gas?
The Fed is already giving handsignals to those watching for this.
Have to disagree—these investors know that the govt spending is out of control and incompetent lawyers running said institution is destroying the value of the dollar and dollar-backed debt. Dollar-backed debt becomes worthless when the fed is forced to print more money, backed by nothing, to buy the governments burgeoning debt. Outrageous deficit spending by the federal government is the root cause of the collapse.
One can draw the inference the fed may be intending to require the TBTF banks eat their own spoiled minced mortgage pies.
I would presume if Mr. Gross saw “faith” in MBS’s, felt the bonds were secure, and had any trust in the ability of TBTF banksters to make them whole, he’d hold them.
I noted Moynihan has already began squawking over the AG’s suggested principle reductions, stating Our duty is to have a fair modification process. Well, they hadn’t been too concerned about that yet.
Its a moral hazard issue.
A corporate bankster using the word “MORAL”?!?!? It’s gotta be a bastardized form - the both of them...
Please tell me this is not true. What is the next shoe to fall, foreign investment funds? How do I convince my wife that this is not going to end as a nice cycle up and down and back again?
>These crooks are manipulating the country as we know it into oblivion....
Your knowledge of fiscal matters & bond markets is breathtaking.
The “crooks” who are manipulating this country into oblivion are the ones that PIMCO is protecting itself from, namely, those involved in QE1, QE2 & the soon to be QW3.
Which must be followed by QE4 and so on and so on.