Thursday, May 5, 2011

Did the "Bond King" just go short at the bottom?



On April 11, "Bond King" Bill Gross of Pimco revealed on CNBC that he was short the Treasury market. It looks like he sold the bottom of the move.



It's not suprising that Gross would get himself in trouble on this. His flawed understanding of our monetary system--where he constantly conflates a household's balance sheet with that of the sovereign government--is a recipe for disaster for a government bond trader. Gross should know better.

Warren Mosler was right about Gross when he said, "He's a better marketer than trader."

4 comments:

Matt Franko said...

TLT (long bond etf) up almost 1 percent today....

Mike Norman said...

And Proshares Ultrashort Treasury ETF (the one that traitor, Eric Cantor owns) was down 2%!!!

apj said...

no, he's actually a great trader....usually....just a crapola economist. Just that most of the time it doesn't really matter if you understand the monetary system or not....sometimes it does....

Bit like Jim "I'm long cotton b/c that's what US money is made from' Rogers

Matt Franko said...

Mike then you keep posting about how close we are getting to the debt ceiling and there is nothing out about what they are going to do about this...

these assholes may just do nothing and hope for a default that would enrich them here. With their leveraged short in bonds... or they at least think so...

But Geithner has to do something.... sell something... this is a very bizarre circumstance and I am taking Warren's advice and just watching from the sidelines for now... on one hand the economy is rolling over so you could say go long the bonds but then these moron's could force a default: hard to see which way to go...

Resp,