So much for all the conspiracy theories that Bill Gross was capitulating in his short position against US debt even as he continued to bash US fiscal and monetary policy. According to just released April data for the flagship Pimco $240 billion Total Return Fund (which saw a $4.2 billion increase in AUM in the month), Bill Gross actually added to his short position against US government debt, bringing total market value exposure to 4% of AUM or ($10) billion. More amazing is that on a Duration Weighted Exposure basis, the firm's Treasury short is 23%, read that again, 23%! So much for that change in outlook. Additionally, Gross also sold another $8.3 billion in mortgage securities, bringing the April total to a nominal $57.8 billion. Spring cleaning at casa de Bill continued across all fixed corporate income as well, dropping the firm's exposure to IG by $1.6 billion and to HY by $2.1 billion. The only two securities which saw a token increase was in Non-US developed markets and Emerging Markets, to $14.4 billion and $26.5 billion, respectively. Yet the biggest shocker of all, is that Gross has now brought his cash position to an all time unprecedented high of $89.1 billion! That's right, PIMCO is charging a substantial asset management fee when 37% of all assets are in cash. One would think the mattress would cost far less. Either Gross is expecting a huge collapse in the bond market (so contrary to prevailing though), or this could well be the bet that buries the Allianz subsidiary.
Looking at the maturity exposure there are no surprises: in keeping with the firm's move to almost an all cash fund, Effective Duration dropped to the second lowest in history, or 3.42 years. As the chart below shows, Gross' exposure to debt with a maturity under 5 years is a whopping 83%. Which begs the question: just how terrified is Gross of inflation to be cutting virtually any and all 5 year + exposure. And yes, if the firm was expecting a deflationary collapse, the duration exposure would be flipped upside down.
Party @ Pimco! Bring your Huggies, they are predicting quite the shit storm.
Bill Gross is going to buy up PHYSICAL SILVER AND GOLD!
So is this good for Ipad2 and netflix or not????
Depends how well ipads stand up as shingles. Netflix is a tough one, would be like trying to build a house out of unused gym memberships...
I predict a complete shit storm on open across the board of all markets. It should give the FED the kick it needs to print more money though.
your right, you can dig up Ipad2 out of the ground for what, like 5 bucks? hahaha
WTF do you do with $89B in cash?
I suppose that much in paper notes could keep the furnace at the Pimco Building going for a while.
I've seen pictures of that being done before.
More to the point, who's going to pay up for this short when he tries to collect?
The Fed, of course. The money supply is about to go ballistic with QE3, 4 and 5 in rapid succession.
Congress is going to be very busy raising the debt ceiling again and again and again...
and pm's will go ballistic with it.
That's a nice wrecking ball.
I have some ideas... monopsony of PM perhaps?
Depends on the landfill in India, I'm sure a street urchin could do it for $4. Knock the gut out of them to make a nice picture frame to hang on my BreX wallpaper in den while pulling a mixture of Enron, Pets.com and Lehman brothers shares out of the Kleenx box. To make sure their value doesn't blow away I'll put my newton on top of them.
I'll then look out the window at my impressive windmills built with real CLNE stock and straws making me zero money. Gentlely drawing the stylus from my Palm Pilot, I'll pick my teeth and wonder if it had been any different...
I hear ya. Still have a couple 2100s and one 2000.
A geniune Enron or Pets.com certificate is worth good money on ebay these days. No so much for the FRN.
It all depends on how absorbent IPad2's are, maybe better for folks to just put on the adult diapers for the shitstorm thats here.
Can gross hypothetically buy American Silver Eagles while sticking to mandate of the fund or would the premium over what it could be used to purchase items in a store negate this option?
http://www.ibtimes.com/articles/142862/20110509/indian-demand-overwhelming-on-golden-day-to-buy-gold.htm
JEWELRY BUYERS in India stood in line to Buy Gold on May 6, as shops opened early for the festival of Akshaya Tritiya.
And you thought people stood in line overnight to only buy iMaxiPads and iTrackPhones
Yep, let the price collapse and see how soon Gold disappears. One word - Asia.
Figures from the World Gold Council show India as the world's largest gold market. India accounted for nearly 32% of global demand in 2010, at 963 tonnes of Gold Bullion. The second largest market was China, which bought 579 tonnes.
He sees rates climbing and will buy US debt with the 89 billion. He will not buy silver or gold or copper or oil as he sees a USD back at 120 from 73 and in that case commodities will be trash. You me him ..... who has the trillion? He did not get there by being wrong............come to think of it the bond market is always right
Do you even know what happens to bond prices when rates climb? I hope you're saying he's waiting for rates to soar, and THEN step in and buy bonds. The only reason he can't buy tangible assets because it is not mandated. He's answered this question before.
He could buy up all the silver on the COMEX, 71 times over with that scratch.
I wish he would.
Not with the new position limits they're about to institute, he can't... doesn't matter how much money he has. Yay for free market capitalism.
New position limits mean squat when PHYSICAL is being bought at all scales, from ant operation to multi-ton deals.
JPig Mormon is about to suffer one major blow, given by none other than themselves.
Let them pull the trigger on those position limits. A lot of people have been reading about silver's rise/fall these last couple weeks. They've been to many silverbull blogs. Most of them have been EDUCATED. You'll be surprised at the percentage of them who have been able to connect the dots. And now they await a good entry point.
JPig Mormon is about to unleash an avalanche that will bury COMEX once and for all.
LOL moment
vs. their benchmark, that is huge
the only sane position is to short bonds. unfortunately market read Fed manipulation is for me illegal bitch a la COMEX et al. $cam$ abound!
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