Wednesday, March 9, 2011

Bond King Bill Gross Dumps U.S. Treasury's

One day after major-leaguer Carl Icahn decided to give back his investors money due to potential market downside, another huge player in the casino of wall street has decided to (CASH) in his stakes in the form of U.S. Treasury's. The undisputed bond king, Bill Gross manager of (PIMCO) feels that due to the potential inflationary pressures applied by the Feds Quantitative Easing strategies Treasury yields will be adversely affected. I would say he is qualified in his judgment since he oversees the largest bond fund on the planet at an estimated 1.1 Trillion, thus being nicknamed the Bond King. By the way the bond market can be likened to the gasoline that fuels an economy's growth, without it the engine stalls and you have a lost decade effect just like Japan. As we approach the four year mark in the great recession we seem to be tracking or mimicking a similar pattern with anemic at best core data numbers, like sub three percent GDP, high unemployment figures, and commodities and inflation on the rise. The fundamentals just are not there, and we seem to have artificially propped up the stock market just as we did with the banking system. Things will become more transparent when QE2 ends in June and inflation takes hold, just remember economics is math at its purest, its all formula based and interconnected.

No comments:

Post a Comment