"Gross Says Bond Bull Market Probably Ended April 29"
He's been the beneficiary of a long-long-long term rise in the popularity of bonds (and caused some of it with his constant pumping of the sector), but then got his tail kicked when he tried to short MBS into the Fed's QE plans.
Not sure what he's up to here saying the eternal rally is over. But if he's right it means the money has to go somewhere. So...pick an investment you think will replace bonds for whales with low risk tolerance.
"Yield Grab Drives Corporate-Bond Records: Investors' desire for yield is spurring a flurry of issuance of corporate bonds..."
"High-Grade European Corporate Bond Yields Fall to Record Lows"
The PIMCO Pimp says: FML.
Guess what ? The alternative of treasury bonds is Junk bond. The hot money is not into equity. It is after the high yield corp bond. Just read today's Wall Street Journal. I think it will end badly. Just much of the derivatives engineered by the Street, this market is also in the dark rooms with no open market. The Wall Street never learn, or rather the smart money will never learn.
His timing may be off but I believe his sentiments are correct. He should not have tried to fight the Fed. However, once the Fed starts to raise interest rates he will be right. I guess one could argue that the Fed will keep interest rates low forever. If it is necessary to do that then we really are in it deep. At that point we start looking like Japan.
When the Fed does start raising rates I will buy the triple leveraged short 20 year treasuries ETF and watch money grow on trees. Of course the recent housing boom will stall. I will have sold my real estate investments by then to some late to the party real estate investor.
yup, Like I posted a few weeks ago, time to play "Follow The Money"
I rotated to a heavier weighting of MLPs and they are doing great.
Also keeping powder dry, and buying 6m to 1yr short corps.
Really gonna have to ladder some maturities as my boy will start college 9/14.
It wasn't too long ago he spoke of the economy strengthening because of housing and "fracking." Then he decided housing and fracking wouldn't be enough after all. New Normal, dirty shirts, it's time for Bill and Mohamed to crank out the op-eds. Sure the fed could wind down its activities - I just don't see any evidence of economic strength that would yield much talked about back up in rates.