Bond King Bill Gross Thinks We Have Fake Markets

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    Helmholtz Watson


    Super Harley

    It has been like that for a long time – even before QE – the old PPT as it was called. Some of this maybe because his not making the money he was given the low interest rates and spreads the sceptic in my thinks.


    Just popped over to twitter – wow – this story brought a lot of people out of the woodwork. His words have at the very least instigated conversation about what has gone on.

    Though I should add the fake S&P 500 just hit another ATH this morning.


    I will leave you with this;


    [size=5]^^^ +1s … YES — in the new era of FAKE NEWS — even a BROKEN WATCH is correct 2 times a day 😉 🙂

    And indeed he does make a few good points … even after almost a decade after 2007-2008 recession, the USA has not fully recovered as economy was held together for years by duck tape, bailing twine, and chewing gum. There are indeed currency manipulations by other nations, artificial support by FED, companies buying & bidding up their own shares, etc.

    Still for the average John & Jane Doe investor out there — I don’t think BONDS are the right answer yet either for now … but once the GREAT CORRECTION takes place & VIX skyrockets — then the broken watch will be truly correct :)[/size]


    Yes agree bonds at these low rates are simply risk silly and he is saying that with corporate bonds and junks spreads and silly levels in a fake market of false comfort created by the Fed

    Helmholtz Watson

    US treasury 3 year notes auction highest yield since April 2010

    Bid to cover was at 2.83x vs 2.70x last 
    54.3 on indirects
    7.1% on directs
    Dealers take 38.6%
    Bid to cover 2.83x vs 2.70x last


    Imagine if the Central Banks, who so far have invested $19 trillion dollars into the financial market used that money to invest in infrastructure.

    To put it into perspective, US President Donald Trump wants $1 trillion to invest in US infrastructure, while the Civil engineers say fixing US infrastructure will take $4.6 trillion.

    $19 trillion dollars into a global infrastructure plan would create well paying jobs, which would then create more tax revenue and also raise the average wage, and reduce the need for raising minimum wage and create higher inflation which would raise rates to normal.

    The Central banks experiment has failed
    The Dwight D. Eisenhower plan was successful


    The wrong people owned the infrastructure … they had to plug their buddie bankers loan holes first – disgraceful and unpatriotic – they should be taking more than a knee.


    Gross has been getting things wrong lately:

    From Bloomberg:

    Bill Gross had his worst day in almost four years yesterday. For other bond managers, it was more like Christmas in May.

    The steep decline in interest rates triggered by fears that Italy might leave the eur[b]o sent Gross’s $2.1 billion Janus Henderson Global Unconstrained Bond Fund down about 3 percent Tuesday, making a bad year even worse. Other prominent funds recorded their biggest one-day gain since 2009.

    Bond yields plummeted Tuesday on prospects that Italy might need a fresh election that could be a referendum on the nation’s inclusion in the euro zone. The yield on the 10-year Treasury note dropped to 2.78 percent from 2.93 percent. Rates rebounded Wednesday as investors deemed the market reaction to Italy’s political turmoil overwrought


    The $77.2 billion Metropolitan West Total Return Bond Fund, the $38.1 billion Bond Fund of America and the $23.5 billion Western Asset Core Plus Bond Fund all climbed about 1 percent, the largest one-day gain in roughly nine years. Falling rates translate to an increase in bond prices.

    Gross has struggled in 2018. His fund is down 5.9 percent for the year, trailing 96 percent of rivals, according to data compiled by Bloomberg. The fund had an effective duration of minus 4.6 years as of April 30, meaning it would profit when interest rates rose and suffer if they fell. Duration measures sensitivity to changes in rates. Gross also relies on selling the equivalent of insurance against big market moves.
    Gross declined to comment on his performance.

    In the first quarter of this year, Gross attributed his fund’s underperformance to a misplaced bet that U.S. and German bond yields would converge. On Monday, the extra yield investors demand to hold 10-year debt from the U.S. rather than Germany reached the most since 1989.

    In 2010, Gross was named fixed-income manager of the decade by Morningstar Inc. Four years later, he took over management of the Janus Unconstrained fund after being ousted as chief investment officer at Pacific Investment Management Co., the firm he co-founded in 1971. Almost $700 million in the Janus unconstrained fund was Gross’s personal money as of June 30, 2017, according to filings.


    Bill, Gross said on Bloomberg TV Tuesday that he made “about $10 million” betting against GameStop shares.

    “Ah, GameStop, eh? How do you do, fellow kids?”
    “I got in too early. I was in the hole by about $10 million,” Gross recounted, telling Bloomberg he bet against shares using the options market. “I got in with options like a good Robinhood trader, I guess.”

    Bill Gross also appears to be pressing his bets against the company. “I’m still selling call options at $250 and $300. I think this is the perfect opportunity for options sellers, not buyers, to take advantage,” he said.

    Bill Gross also told Bloomberg he is expecting “3-4% inflation” and was short treasuries as a result. He is short the 10-year future and also commented that he is betting against the long bond “to a certain extent.”

    Gross retired from his Janus Unconstrained Fund in February 2019 after spending years unable to generate consistent returns and stuffing his ex-wife’s air vents with dead fish. Gross had run the Janus Henderson Global Unconstrained Bond Fund since late 2014, however his annualized returns of less than 1% at Janus “failed to live up to his stellar long-term record from the Pimco era” as Bloomberg once diplomatically put it.

    WallStreetBets may be eager to offer him up a second retirement:

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