When Nassim Taleb and Marc Faber say that US government debt is a suicide investment, one can be allowed some skepticism. After all, they are likely just talking their book. On the other hand, when the manager of the world's biggest bond fund, whose flagship fund Treasury holdings amount to almost $80 billion goes on Bloomberg and says to "avoid dollar-denominated government debt" better known as US Treasuries, and instead recommends viewers invest in "stable" currencies like the Peso, the BRL or the CAD, then you know the bottom in bonds is in. So in addition to dumping fixed rate bonds (which means Pimco will again be able to buy on the cheap ahead of QE3, which as Larry Meyer has by now likely advised Pimco is a sure thing), Gross also told Bloomberg that his other two strategies are to buy floating rate debt (over fixed), and lastly recommend credit spreads over interest rate duration risk. For those who find something troubling with a $1 trillion fixed income manager talking down his investments, and are still wondering whether or not QE3 is coming, we suggest putting one and one together. And while at it, they should also consider that Pimco now holds over $100 billion in MBS: a notional amount last held just as QE1 was announced.
Dec. 31 (Bloomberg) -- Bill Gross, manager of the world's largest bond fund at Pacific Investment Management Co., talks about his investment strategy. Gross, speaking on Dec. 22 with Tom Keene for Bloomberg Television's "Surveillance Midday," also discusses U.S. fiscal policy and European debt markets. (Source: Bloomberg)
by Tyler Durden Zero Hedge December 31, 2010
Bill Gross Telling Bloomberg To "Avoid Dollar Denominated Government Debt" Probably Means Bond Rout Is Over
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