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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Cogito Ergo Sum who wrote (73042)	4/12/2011 12:39:20 PM
From: elmatador	Read Replies (1) \| Respond to of 217619

Pimco manager bets against US debt By Dan McCrum Published: April 11 2011 19:46 \| Last updated: April 11 2011 19:46 Bill Gross, manager of the world’s largest bond fund, is now actively betting against the value of debt issued by the US government. Pimco’s $236bn Total Return Fund held minus 3 per cent of its assets in government related securities at the end of March, down from zero the month before, according to a report issued by the company on Monday. EDITOR’S CHOICE Pimco fuels bond market debate - Dec-16Pimco enters UK retail scene - Sep-12Pimco move seen as bid to reduce risk - Jun-27Pimco to tap European equities - Jun-14Pimco faces $600m class action - Feb-23Kashkari’s move to Pimco is fuel for critics - Dec-08Mr Gross, one of the most influential figures in bond markets, has repeatedly warned of rising bond yields as the end of the US Federal Reserve’s bond buying programme known as quantitative easing, or “QE2”, approaches. Such rises would hit the value of holdings of bonds as their price moves inversely to their yields. He argues that the Fed expects buyers such as Pimco to step in once it stops purchasing Treasuries at the end of June. “Maybe the Fed is right, but what I am certain of is that these rates are not rates that provide a semblance of value,” he has said. That call initially looked dangerous as the benchmark 10-year Treasury yield dropped to a low of 3.15 per cent on March 17, at the height of concerns surrounding the Fukushima reactor in Japan. But the 10-year yield has since risen to about 3.6 per cent. Mr Gross, who has managed the Total Return Fund since its inception in 1987, has outperformed the benchmark in seven of the past 10 years, according to Morningstar. The fund has returned 8.83 per cent annually, before fees, over the decade, versus 5.49 per cent for the Barclays Capital US Aggregate Bond Index. The fund is also likely to have benefited from its concentration in short-term holdings. Net cash equivalents were the fund’s largest position at the end of March, at 31 per cent of assets, from 23 per cent the month before. Cash is defined by Pimco as any security with a duration – a measure of a security’s sensitivity to movement in interest rates – of less than one year. Short-term interest rates have fallen this month following the introduction of a levy on banks introduced by the Federal Deposit Insurance Corporation, which has curbed trading in the repurchase, or repo, market. A temporary absence of some Treasury securities from the market caused by wrangling over the government debt ceiling may also have contributed to the move. Mr Gross cut holdings of mortgage backed securities during March, a timely move given the March 21 announcement that the US Treasury is to wind down its $142bn portfolio of mortgage bonds guaranteed by Fannie Mae and Freddie Mac. Copyright The Financial Times Limited 2011. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web

To: Cogito Ergo Sum who wrote (73042)	4/12/2011 12:39:21 PM
From: elmatador	Read Replies (2) \| Respond to of 217619

Did Jim Chanos give up shorting? Why did he suddenly start going long? thestreet.com