My best shot is three-fold: 1. investors are sensing an inevitable "deal" now that Republicans have opened the door to tax hikes for the rich, 2. it's year end and people are selling off for tax reasons, and 3. investors are starting to play BOND like an equity ETF, including fast trades, because the NAV fluctuates more dramatically than with regular bond funds/ETFs.
I admit this continuing decline is disheartening since it's effectively taking away the fairly rapid gains we've experienced. And I'm reminded of Bogle's philosophy that counsels us to invest in broad index funds that are NOT managed. I see the graph comparing BOND and regular index bond funds/etfs is now showing the two options growing ever closer together in performance whereas for some time BOND was constantly outstretching the index competition.
Since I have to pay a $8.95 commission every time I buy BOND at Schwab vs. no fee for Schwab's index etf (SCHZ), plus a far higher management cost, I will be watching BOND closely to determine if this is the better option for me. But most likely I'll just weather it knowing that Gross is an oustanding manager, albeit he really screwed up a couple years ago on the treasuries bet.