Joe Weisenthal — The Bill Gross Blunder That Led To His Demise

In early 2011, Bill Gross completely exited the Treasury market on the premise that interest rates were going to surge and hit bonds.

The reason he thought interest rates were going to surge was that the Fed was ending QE2 in the summer of 2011. In a note written to investors in March, 2011 he asked: Who will buy Treasuries when the Fed doesn’t?… 

So Gross was using a flawed economic model (as were the deficit hawks who insisted that the US had to get its spending down to avoid a Greece-like bond spiral).… 

Folks like Bill Gross (and Republicans politicians) thought the Fed was distorting the market, and keeping interest rates from surging, and that turned out to be wrong.

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The Bill Gross Blunder That Led To His Demise
Joe Weisenthal