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 ...
Is this why the market dropped today?
Is this why the market dropped today?
Is this why the market dropped today?
“Personally, I believe the US Taxpayer will repudiate the US Debt. Still, it’s better than holding stocks...same as treasuries.”
Thanks for your reply! I wish I understood it...Are you saying that taxpayers will avoid buying treasuries? And are you saying that savings bonds are better than stocks or treasuries?
“...but while I was I saw nothing about the Pimco story.”
Typical General Electric (scum company) CNBC propaganda. ALL TV is garbage and CNBC is a total joke.
Bill Gross is a very sharp guy. I knew PIMCO when they were a small part of Pacific Life. Germany’s Allianz bought them and Gross got a very sweet deal.
Allianz is also very sharp. This is vote that Germany thinks America’s political situation (the muslim)is a joke. The Dems screaming about cutting $61 billion in spending is a joke. The USA right now is a joke.
Marc Faber, Jim Rogers, James Grant et al are saying basically the same thing.
Comcast completes NBC Universal merger
...but from what I've seen: SSDD.
No. I am saying that the taxpayer, at some point will refuse to pay the debt. Will in fact default.
The "new regime" could decide to pay all (extremely unlikely), a portion or none of the previous debt. That debt includes Treasuries, I-Bonds, Savings Bonds etc.
The most likely long-term scenario is the US Government (US Taxpayer) completely repudiates all debt.;..since there's not enough money in the whole friggin' world to ever pay it. And, eventually, when interest rates increase to 7-10% on the 10yr issue...10-12% on the 30yr issue...we won't even be able to afford the INTEREST on that debt.
Of course the above scenario assumes we continue to accumulate debt beyond the current $14trillion...a certain scenario.
Here’s another one. I don’t see anything new of substance from the Fed. The left fears high oil prices and slow revenues while continuing to talk about the funny current recovery.
Fed Giving Credit Markets Clues on Path to Exit From Unprecedented Easing
http://www.bloomberg.com/news/2011-03-10/fed-giving-credit-markets-clues-on-path-to-exit-from-unprecedented-easing.html
[Title and link only, no content from Bloomberg should be posted on FR.]
No. China is just really pissed off. If they announce “no more UST,” what does that do to the value of the T-Bills they are holding? > 700 billion dollars. That’s an expensive temper tantrum.
The bigger danger is China has to start liquidating T-Bills to pay for food and oil. Maybe the Fed will just buy them up and keep interest rates down. But that is the ultimate losing trade for the fed. Interest rates ARE going up sometime and a lot. At that point, the Fed is bankrupt because treasuries will plummet.
If only Zero hadn’t run the deficit up to $1.5 trillion, we would be sitting in the cats-bird seat as against China right now. As it is, we are in a mutual suicide pact with them and the Fed really has no wiggle room. It’s only two options are to let rates go up, with all the consequences, or to continue to fund Zero’s deficit by buying T-Bills.
“But he wants just cash instead. Going short-term + cash and dumping Treasury debt means %’s are headed up, Treasurys and equities down, like the article says. Gross’s move if correct also implies, dollar up, foreign currencies and precious metals down.”
I agree with this analysis completely. What I don’t understand is why Gross is so certain of the interest rate move, given that the FED probably has more time in which it can still control interest rates thru monetization of debt. How does he know that the FED won’t continue trashing the dollar with monetization? This is a huge reallocation in something the size of PIMCO. And, a huge risk of under-performing other funds if he is wrong about interest rates.
As we discussed years ago: as predicted it is coming to pass.
I wonder if Mayans 1,500 years ago, Nostradamus 500 years ago and other prophecies could smell Oba-Hussein in December 21st, 2012 based on which they have predicted End Times?
Sure feels like it as we watch events triggered by him and urged on by his puppet-masters unfold into cataclysmic disaster.
Good Nostradamus TV show last night went into the scientific backing to these predictions.
BTW a practical sidebar:
http://noiri.blogspot.com/2011/03/ice-your-cellphone.html
If a portfolio is beating inflation, tinkering on the edges is all that is necessary.
Gross said this morning that he still has short term treasuries (12 mos. and less); the fed has kept interest rates 1%-1.5% lower than market. He likes emerging market bonds, including Spain and Portugal.
yitbos
If Americans can’t buy Shina’s crap, who will? If Americans can’t afford something made by someone working for $.10 per day, how would we afford things made by Americans for $100+ per day?
It wouldn’t work.
And here’s the video!
From “The Man Who Saw Tomorrow”, starring Orson Wells.
http://www.youtube.com/watch?v=KDq7JCgJr3Q
Anyone who has not already seriously started perparing for hard times better start making lists today and start shopping etc this weekend.
Seriously. Stuff’s already getting much more expensive and crappier.
What’s ahead will make the fall of Argentina look like child’s play, imo.
Agreed. Due to market fluctuations and propaganda for special interests, though, such an economic fall can be like a hurricane (typhoon) or tsunami. Many of those inexperienced or uneducated in such disasters won’t know that it’s severe, until they’re drowning.
It could be "both". First an attempt to force down interest rates and inflate the currency leading to speculative inflation with that followed by a deflationary collapse. It is not only a question of what is next, but what "ultimately" will happen in the event of a total collapse. A deflationary recession/depression is my expectation as a end outcome of a total financial meltdown.
Must that be the outcome? NO. Here is flaw in all of this, the foreign countries are in worse shape than we are. What or who is driving this assault on the U.S.? Now that is a question. It is much larger than George Soros. It is much larger than the Bank of International Settlements and it is much bigger than the Saudi's. Has anyone defined it? Not that I know.
Sure feels like it as we watch events triggered by him and urged on by his puppet-masters unfold into cataclysmic disaster.
—
And so it goes... Obizmpo has droped any pretense of stopping Iran’s quest for nukes... many cheers in Tehran...
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