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Bill Gross Shorts US Gov Bonds



April 11, 2011 – Comments (7) | RELATED TICKERS: TMF

According to a number of news reports, PIMCO's Total Return Fund, the world's largest bond fund, has now gone short US gov't securties.

The best way I know to follow PIMCO's lead in CAPS is a red thumb on ticker TMF - a leveraged ETF that's long long-term treasuries.  You could also green thrumb TBT, a leveraged EFT that's short long-term treasuries, but I'd rather have the fund friction helping my pick than fighting it.

Disclosure - no position in TMF or TBT.

Fool on!




7 Comments – Post Your Own

#1) On April 11, 2011 at 12:42 PM, leohaas (30.15) wrote:

With interest rates going up in the future (later this year or early next year), bond prices have nowhere to go but down. Rising interest rates mean lower bond prices. Going short is a sure bet.

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#2) On April 11, 2011 at 3:37 PM, Betapeg (< 20) wrote:

Also a good inflation play. 

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#3) On April 11, 2011 at 3:45 PM, mtf00l (42.52) wrote:

Don't tempt me Frodo.  I would use this information to do good and through me it would do evil to inflate my CAPS score... =D

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#4) On April 11, 2011 at 9:23 PM, Valyooo (37.92) wrote:

Obviously interest rates have to rise at some point but people have been waiting on it for 2 years, it may happen a lot more slowly than you think

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#5) On April 11, 2011 at 9:24 PM, rd80 (95.95) wrote:

leohaas - yep.  I'm not brave enough to short TMF in real life (simply not comfortable shorting anything), but I'm on my third red-thumb of it in CAPS.

Betapeg - yep again.  Ben Bernanke appears to be the only person on the planet who can't see signs of inflation, which will lead to higher interest rates and lower bond prices.

mtf00l - Come over to the dark side.  Red thumbs ARE good.  The points are good.  [Yoda] If evil it were, the rules allowing it would not.[/Yoda]
(sorry 'bout mixing Star Wars with Harry Potter - I'm old and have never seen Harry Potter).

Fool on!

Once again confirmed - blogging is more fun with wine - a nice Chilean Savignon Blanc in this case.

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#6) On April 11, 2011 at 9:30 PM, rd80 (95.95) wrote:

Valyooo - always good to hear from you.

Aye.  I'll freely admit I've been predicting higher interest rates for a couple of years now and been wrong.  I don't know when it will break, but I think it'll be pretty quick when it does.

At this point, I'm not anxious to buy any treasuries, but sure as heck wouldn't short them.  I believe bonds are in a bubble and have no clue how much longer the bubble can keep inflating before it pops.

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#7) On April 11, 2011 at 10:07 PM, Betapeg (< 20) wrote:


I think Bernanke sees signs of the inflationary threat. You have to understand the dilema he faces in maintaining the economic recovery while also fighting inflation. It's a catch-22. What would you do? Cut the balance sheet at the cost of economic recovery or keep easy money flowing at the cost of low inflation. The inflation rate is at 2.11% and rising but I think it's currently at a good level. 

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