All Of Wall Street Agrees With Gross

John Carney CNBC April 12, 2011

Skip navigation #headerOverlay{ color: #ccd6df; font-size:11px; line-height:130%; } #headerOverlay strong{ color: #ffd226; } #headerOverlay a {color:#ccd6df;text-decoration:none;} #headerOverlay a:hover {color:#ffd226;} #headerOverlay a:visited {color:#ccd6df;} #headerOverlay a:visited:hover {color:#ffd226;} Symbol Lookup onloadAutoSuggest(); var pgValue = "CNBSEB"; var cmsKeyWord = "alternative investing"; var cmsNewPG = "CNBWAB"; if ((cmsKeyWord.length > 0) && (cmsNewPG.length > 0)) { var newPG = cmsNewPG.split(';'); var group = cmsKeyWord.split(';'); if (newPG.length == group.length) { var description = cnbc_pagedesc.toLowerCase(); for(var x = 0; x < group.length; x++) { var keyWord = group[x].split('|'); for (var j = 0; j < keyWord.length; j++) { if (description.indexOf(keyWord[j].toLowerCase()) != -1) { pgValue = newPG[x]; j = keyWord.length; x = group.length; }}}}} if (cnbc_DARTFlag=="new") { cnbc_DARTAdCall(88,31,pgValue); } else { dapMgr.enableACB("SearchBox88x31",false); dapMgr.renderAd("SearchBox88x31","&PG=" + pgValue + "&AP=1071&PN=CNBC",88,31); } cnbc_displayUsername("cnbc_usertime","cnbc_username");RegisterSign InMember CenterSign OutRegistercnbc_toggleUserState();HOMENEWSMARKETSEARNINGSINVESTINGVIDEOCNBC TVCNBC 360CNBC PROU.S.Asia-PacificEuropeEconomyEnergyGreenTechnologyBlogsWiresSlideshowsSpecial ReportsCorrections if (cnbc_DARTFlag=="new") { cnbc_DARTAdCall(728,90,"CNBGE7"); } else { dapMgr.enableACB("USNewsBlogs728",false); dapMgr.renderAd("USNewsBlogs728","&PG=CNBGE7&AP=1390&PN=CNBC",728,90); } NetCan You Spare Some Regime Change? var cnbcSubHeaderId = document.getElementById('subheader_'+ 38911124); cnbcSubHeaderId.innerHTML = document.getElementById('renderReaderContent').innerHTML; Email: document.write("");document.write("NetNet"+"@"+"cnbc.com");document.write('');Call: 201-735-iNet (4638)Text Message: Text NETNET followed by your tip to 26221. if (cnbc_DARTFlag=="new") { cnbc_DARTAdCall(300,250,"CNBGE3"); } else { dapMgr.enableACB("USNewsBlogs300x250",false); dapMgr.renderAd("USNewsBlogs300x250","&PG=CNBGE3&AP=1089&PN=CNBC",300,250); } Current DateTime: 11:57:06 12 Apr 2011LinksList Documentid: 38910464Expiration DateTime: 4/12/2011 12:00:44 PM cnbc_commentCountMapObj.cnbc_commentCountMap_put("", "38910464_1","cnbcCommentsTxt" ); Goldman Call to Sell Oil Sets Up Buying Opportunity: Traders cnbc_commentCountMapObj.cnbc_commentCountMap_put("42554378", "38910464_1","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42554378", "38910464_1","cnbcCommentsTxt" ); Did The Winklevoss's Win Against Facebook? cnbc_commentCountMapObj.cnbc_commentCountMap_put("42550836", "38910464_2","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42550836", "38910464_2","cnbcCommentsTxt" ); The Guy Who Says He Owns 50% of Facebook Just Filed a Boatload of New Evidence"”And It's Breathtaking cnbc_commentCountMapObj.cnbc_commentCountMap_put("42552184", "38910464_3","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42552184", "38910464_3","cnbcCommentsTxt" ); Who Is Running Bank of America? cnbc_commentCountMapObj.cnbc_commentCountMap_put("42551054", "38910464_4","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42551054", "38910464_4","cnbcCommentsTxt" ); 'BofA Kept Executives in Dark on Dividend' cnbc_commentCountMapObj.cnbc_commentCountMap_put("42550866", "38910464_5","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42550866", "38910464_5","cnbcCommentsTxt" ); Will Hedge Fund Registration Overwhelm the SEC? cnbc_commentCountMapObj.cnbc_commentCountMap_put("42550842", "38910464_6","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42550842", "38910464_6","cnbcCommentsTxt" ); Wells Fargo, Warren Buffett, and the Secret to Running a Bar in NYC cnbc_commentCountMapObj.cnbc_commentCountMap_put("42540171", "38910464_7","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42540171", "38910464_7","cnbcCommentsTxt" ); Will New Private Capital Rules Hurt Venture Capital? cnbc_commentCountMapObj.cnbc_commentCountMap_put("42539342", "38910464_8","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42539342", "38910464_8","cnbcCommentsTxt" ); Everyone on Wall Street Agrees with Bill Gross: Short Treasuries cnbc_commentCountMapObj.cnbc_commentCountMap_put("42536993", "38910464_9","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42536993", "38910464_9","cnbcCommentsTxt" ); Lynn Tilton: The Wildest Woman in American Business cnbc_commentCountMapObj.cnbc_commentCountMap_put("42535654", "38910464_10","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42535654", "38910464_10","cnbcCommentsTxt" ); Earnings Look Strong Now, But Growth May Not Last cnbc_commentCountMapObj.cnbc_commentCountMap_put("42536741", "38910464_11","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42536741", "38910464_11","cnbcCommentsTxt" ); The SEC Revives Profit-Flipping cnbc_commentCountMapObj.cnbc_commentCountMap_put("42535050", "38910464_12","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42535050", "38910464_12","cnbcCommentsTxt" ); 'Ring Fencing' UK Banks cnbc_commentCountMapObj.cnbc_commentCountMap_put("42533068", "38910464_13","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42533068", "38910464_13","cnbcCommentsTxt" ); Madoff Finds 'Love' Behind Bars, Wants to Teach Business Ethics cnbc_commentCountMapObj.cnbc_commentCountMap_put("42532234", "38910464_14","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42532234", "38910464_14","cnbcCommentsTxt" ); Waking up With Nicole Lapin cnbc_commentCountMapObj.cnbc_commentCountMap_put("42532302", "38910464_15","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42532302", "38910464_15","cnbcCommentsTxt" ); Federal Government Careens Toward Shutdown cnbc_commentCountMapObj.cnbc_commentCountMap_put("42498500", "38910464_16","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42498500", "38910464_16","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("", "38910464_1","cnbcCommentsTxt" ); Current DateTime: 11:57:06 12 Apr 2011LinksList Documentid: 39085620FacebookTwitterRSSCurrent DateTime: 11:57:06 12 Apr 2011LinksList Documentid: 38852222John Carney

Runs this joint.

Cadie Thompson

Really, really runs this joint.

Ash Bennington

NetNet Special Reporter

Kate Kelly

Reports on the major Wall Street firms, trading, and regulation.

Jeff Cox

A staff writer with CNBC.com, covering the gamut of issues affecting the stock market and the economy.

Lori Spechler

A Senior Editor at CNBC, commodity trader in a former life.

Lori Ann LaRocco

A Senior Talent Producer at CNBC.

Nicole Lapin

Runs the graveyard.

Current DateTime: 11:57:05 12 Apr 2011LinksList Documentid: 38910635Expiration DateTime: 4/12/2011 12:00:35 PM cnbc_commentCountMapObj.cnbc_commentCountMap_put("", "38910635_1","cnbcCommentsTxt" ); Goldman's Call to Sell Oil Could Be a Buying Opportunity: Pros cnbc_commentCountMapObj.cnbc_commentCountMap_put("42554378", "38910635_1","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42554378", "38910635_1","cnbcCommentsTxt" ); Japan Raises Nuclear Crisis to Same Level as Chernobyl cnbc_commentCountMapObj.cnbc_commentCountMap_put("42542704", "38910635_2","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42542704", "38910635_2","cnbcCommentsTxt" ); Mobius: We May Invest In 'Emerging Market' Japan cnbc_commentCountMapObj.cnbc_commentCountMap_put("42554030", "38910635_3","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42554030", "38910635_3","cnbcCommentsTxt" ); Why Natural Gas May Not Be Such Clean Energy After All cnbc_commentCountMapObj.cnbc_commentCountMap_put("42551127", "38910635_4","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42551127", "38910635_4","cnbcCommentsTxt" ); Global Stocks, Commodities Skid As Investors Flee Risk cnbc_commentCountMapObj.cnbc_commentCountMap_put("42552149", "38910635_5","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42552149", "38910635_5","cnbcCommentsTxt" ); United States vs China: An M&A Cold War Heats Up cnbc_commentCountMapObj.cnbc_commentCountMap_put("42553539", "38910635_6","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42553539", "38910635_6","cnbcCommentsTxt" ); 'Enforcment Action' Against the 'Robo-Signers'? Not Yet cnbc_commentCountMapObj.cnbc_commentCountMap_put("42553732", "38910635_7","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42553732", "38910635_7","cnbcCommentsTxt" ); NASA Names Space Shuttles' Retirement Locations cnbc_commentCountMapObj.cnbc_commentCountMap_put("42556121", "38910635_8","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42556121", "38910635_8","cnbcCommentsTxt" ); Private Trading Houses Resume Libya Oil Deals cnbc_commentCountMapObj.cnbc_commentCountMap_put("42554417", "38910635_9","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42554417", "38910635_9","cnbcCommentsTxt" ); The World's Highest Tax Rates cnbc_commentCountMapObj.cnbc_commentCountMap_put("42192653", "38910635_10","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("42192653", "38910635_10","cnbcCommentsTxt" ); cnbc_commentCountMapObj.cnbc_commentCountMap_put("", "38910635_1","cnbcCommentsTxt" ); » HelpCurrent DateTime: 11:57:06 12 Apr 2011LinksList Documentid: 38851925Subscribe to this RSS feed

Stay up to date with NetNet.

dapMgr.enableACB("Context300",false); dapMgr.renderAd("Context300","&PG=CNBAL3&AP=1089&PN=CNBC",300,250); setDefault('cnbc_textbody');Everyone on Wall Street Agrees with Bill Gross: Short Treasuries Published: Monday, 11 Apr 2011 | 2:05 PM ET Text Size By: John CarneySenior Editor, CNBC.com window.fbAsyncInit = function() { FB.init({appId: 'your app id', status: true, cookie: true, xfbml: true}); }; (function() { var e = document.createElement('script'); e.async = true; e.src = document.location.protocol + '//connect.facebook.net/en_US/all.js'; document.getElementById('fb-root').appendChild(e); }()); var sUrl = window.location; var str = '' $(".fbButton").html(str); //alert("1 :::: " + jQuery("#ssShare").length); Twitter cnbc_createTwitterURL();LinkedIn addthis_pub = 'cnbccomrssfeeds'; addthis_hide_embed=false; addthis_options = 'linkedin, digg, delicious, google,facebook,more'; More Share

Getty ImagesBill Gross of PIMCO participates in a conference on the future of housing finance at the Treasury Department in Washington, DC.It was hardly surprising to learn this morning that Pimco's $235.9 billion flagship bond fund had gone net short Treasury bonds.

But I was surprised to learn in conversations how many people were convinced that this was exactly the right move"”although some wonder if Pimco might be a bit early.

Bill Gross, founder and co-chief investment officer of Pacific Investment Management Co., has been letting out bearish growls for months. In February, he took Pimco's Total Return Fund's holding of Treasuries down to zero. So this is just a tiny step further into the plan of the cave bear.

What's behind this move? Well, you'll hear all sorts of explanations"”from market watchers and Gross himself. Too much debt, fear of inflation, foreigners exiting the market, the desire for yield after too

Really, really runs this joint.

NetNet Special Reporter

Reports on the major Wall Street firms, trading, and regulation.

A staff writer with CNBC.com, covering the gamut of issues affecting the stock market and the economy.

A Senior Editor at CNBC, commodity trader in a former life.

A Senior Talent Producer at CNBC.

Runs the graveyard.

Stay up to date with NetNet.

But I was surprised to learn in conversations how many people were convinced that this was exactly the right move"”although some wonder if Pimco might be a bit early.

Perhaps the most popular explanation is the coming exit of the Federal Reserve"”which has been buying government bonds as part of its quantitative easing strategy"”out of the market.

But some credit market insiders I spoke with say another factor should be taken into account: the debt ceiling fight.

"This is going to occur this summer"”right when the Fed is implementing the QE2 exit strategy"”and its going to scare off investors, both foreign and domestic," one credit market veteran who spoke on the condition of anonymity said.

The idea is that the fight over the debt limit raises the possibility that Treasuries are not 100% safe"”that U.S. government debt actually involves credit risk the way the debt of every other country on earth does.

Even if you think that these fears are overblown, it might make sense to short Treasuries going into this summer"”with hopes of covering when the debt ceiling fight gets under way and the Fed exits.

But perhaps there is room for caution about this trade. It is so widely viewed as the right thing to do that it should set off all contrarian alert systems. Anything that becomes conventional wisdom on Wall Street usually turns out to be dangerous, wrong, or dangerously wrong.

____________________________________________

Questions? Comments? Email us at document.write("NetNet"+"@"+"cnbc.com");document.write('');

All Of Wall Street Agrees With Gross

Related Articles