Skip to comments.Bill Gross (PIMCO) Just Made A Huge Bet On Economic Doom, And Nobody Seems To Care
Posted on 10/14/2011 11:57:46 AM PDT by blam
Bill Gross Just Made A Huge Bet On Economic Doom, And Nobody Seems To Care
Oct. 14, 2011, 2:01 PM
This week, bond god Bill Gross just made a super-long bet on the long end of the yield curve, coming right after a historic rally in fixed income.
It was a gigantic shift from his stance earlier this year, when he bet against Treasuries -- a bet that famously worked out badly for him.
The interesting thing about this is that his short bet got TONS of attention (including a big story in The Atlantic), whereas his new long bet is only getting a little.
The funny thing about this is that in terms of implication for the economy, the new long bet is much more significant. Going super-long the long end of the curve implies that Gross thinks yields will collapse even more, which would likely happen in a major economic collapse of some sort.
Shorting Treasuries, conversely, was a very bullish bet on the economy, as Treasuries fall when the economy is improving (or at least lately that's been the pattern).
And so really this new bet should be getting tons of attention for what it says: If it pays off, that will be very ominous. Yet it's hardly getting a peep from most people.
The reason is: When people hear "Short Treasuries" they actually hear "Short America" even though that's not what it means, so and so they freak out.
(Excerpt) Read more at businessinsider.com ...
Since Gross is often wrong, then yields must be going up, implying an economic recovery.
Election years are often plus years for the market, because whoever is winning has the most followers. And those followers believe their guy will fix whatever ails us. Obama's election was an aberration in more ways than one.
likely the pubbies will win the election.
The first thing that will happen after winning the election will be that obamacare will be gone.
this, single handedly will have huge effects on the economy.
I have seen graphs which show that in early 2010 the economy was creating hundreds of thousands of jobs monthly. Job creation stopped on a dime in May 2010, the month obamacare was made into law.
reverse that and there will be huge knock on effects. the stock market will start to anticipate such months in advance of it happening. people get it.
Don't be so sure.
Why does the Republican-led House continue to finance the ongoing implementation of Obamacare?
I received my premium notice for 2012 healthcare insurance today.
ObamaCare is forcing my healthcare insurance costs to go up 32% more in 2012 vs 2011.
ObamaCare forced health insurance in 2011 to cost 27% more than 2010.
That is a 50% increase in health care insurance costs since Obama Care was enacted.
Hopefully, voters will get ticked off enough that the GOP could nominate a dog catcher and that would be enough to beat Obama.
Actually it is not a fifty percent increase it is two year compounded increase equaling 67.64 percent or almost exactly two thirds more.
There’s another possibility as well. This current purchase could be meant to offset the risk in another investment, effectively hedging bets.
I haven’t ran the numbers, but it seems reasonable that long-term treasuries would be negatively correlated with a number of other possible investment vehicles.
you see when so many get everything for practically nothing those of us who have to pay the huge premiums monthly are just shouting into the wind....
Everything is not free on Medicare. There are pretty steep premiums for someone on a small fixed income. And there are co-pays for treatment and drugs.
Plus, it’s getting harder and harder to find a doctor who will accept medicare patients.
I don’t know what the answer is. But I do remember a time when you went to the family doctor, paid a $15 office visit, he wrote you a script or gave you a shot and that was that. Now the co-pay on many of the drugs are $25.