Exclusive: Bill Gross Dumps All Treasuries, Brings Total "Government Related" Holdings To Zero, Flees To Cash - No QE3?

Submitted by Tyler Durden on 03/09/2011 09:02 -0500

And many thought Bill Gross was only posturing when he said he is getting the hell out of dodge. Based on still to be publicly reported data by Pimco's flagship Total Return Fund, the world's largest bond fund, in the month of January, has taken its bond holdings to zero (and -14% on a Duration Weighted Exposure basis). The offset, not surprisingly, is cash. After sporting $28.6 billion in "government related" securities, TRF dropped to $0.0, while its cash holdings surged from $11.9 billion to a whopping $54.5 billion (based on total TRF holdings of $236.9 billion as of February 28). This is the most cash the flagship fund has ever held, and the lowest amount in Treasury holdings since January 2009 before it was made clear that the Fed was going to adjust QE1 to include Treasurys in addition to Mortgage Backed Securities. PIMCO's Treasury holdings peaked in June 2010 at $147.4 billion and have declined consistently ever since. And while we expected that the spike in MBS holdings (at times on margin) was indicative of an expectation that QE3 would monetize mortgage backed securities, the ongoing decline in that asset class now leads us to believe that Bill Gross is now convinced there will be no QE3 at all, at least based on his just putting his money where his monthly pen is! And if Bill Gross, the most connected person to the upcoming actions by the Fed, believes there is no more quantitative easing, it is really time to get the hell out of dodge in all security classes - bonds, and most certainly, equities.

 

Alasdair Macleod: Governments are about to lose control of the markets

 

Gold Retraces All Losses After Official Says "China Should Take Every Chance To Buy Gold, Especially When Gold Prices Fall"

Submitted by Tyler Durden on 03/09/2011 07:26 -0500

It was only logical that hours after Jim Cramer "Whitney Tilsoned" gold, China would come out and say it needs to buy more of the precious metal. After hitting an overnight low of $1,423/oz for some unknown reason, perhaps the latest overdue shakeout of the weakest holders, gold has since retraced half the distance to its all time highs, following a report from Reuters that "China should use some of its $2.85 trillion foreign exchange reserves to buy more gold, a government adviser was quoted as saying by local media reports on Wednesday. Li Yining, a senior economist at Peking University and member of the Chinese People's Political Consultative Committee, an advisory body to the national parliament, said that China should use the precious metal to hedge against risks of foreign currency devaluations. "China should increase its gold reserves appropriately, and China must take every chance to buy, especially when gold prices fall," Li was quoted by the official Xinhua news agency as saying." And so the immaculate record of all those calling for the "inevitable" correction in gold continues with a roughly 0% success rate.

Forget $8,000, Gold Headed Much Higher: James Turk

GoldMoney founder and GATA consultant James Turk told King World News yesterday he thinks the gold/Dow ratio will reach 1:1 at a level much higher than 8,000. Turk adds: "I'm often asked by people: When do I think they should sell their gold? I tell them: This time around it's going to be easy, because you are not going to sell your gold; you're going to spend it. In other words, gold will once again become currency." The link to this short must read blog, is here.

One Minute Macro Update - The Long Overdue Peripheral Meltdown Resumes

Submitted by Tyler Durden on 03/09/2011 07:41 -0500

Two top ECB officials indicated yesterday that interest rate increases might come sooner than ECB Trichet alluded to last week. Given Europe’s slow economic recovery, opinions are mixed on the matter. Recession-predicting economist Nouriel Roubini told reporters yesterday that if oil reaches $140/barrel, a level seen in the summer of 2008, the rate action will cause many advanced economies to slip into double-dip recession. Recent turmoil in the Middle East has sent oil prices nearing $120/barrel. Greek, Spanish, and Portuguese yields rose again yesterday as Friday’s EU summit on a new debt crisis solution draws closer. Portugal sold €1.0B in 2Y bonds at 5.993% v 4.086% prior with b/c 1.6x v 1.9x prior. The SOVXWE widened out again to 183bp from 177bp a week ago with Spain underperforming as it is most vulnerable to rate hikes. We feel that the longer the periphery/core support process drags out, the more rating agencies will be forced to look at interest rate burdens for periphery countries as being normal moving forward. German industrial production rose 1.8% MoM v 1.7%E. Greek unemployment for December moved up to 14.8% v 14.5%E and 13.9% prior. U.K.’s visible trade balance for January strengthened to -£7.1B v -£8.5B E, its smallest deficit since April of last year. The figures show an improvement over December’s -£9.7B even after considering weather’s impact on exports that month. 

 

 

 

 

Plumes Of Black Smoke Rising From Area Around Es Sider Oil Terminal

Submitted by Tyler Durden on 03/09/2011 08:03 -0500

Update: Rebel witnesses say storage tanks in east Libya terminal of Es Sider hit an exchange of fire between Gaddafi forces and rebels . Reuters reports that three plumes of black smoke are rising from the area around As Sider oil terminal. This is in addition to Al Jazeera video coverage of comparable activity at Ras Lanuf. Whether this indicates that Operation Apres Moi Le Deluge by Gaddafi has commenced, is unclear for now. 

 

 

 

 

On The Libyan Oil Tank "Time Bomb"

Submitted by Tyler Durden on 03/09/2011 07:09 -0500

Three weeks ago we first mused about the irrational endgame of it all when we asked: "When Hussein left Kuwait he set the oil wells on fire. Will Ghaddafi?" It now appears that this could well be the endgame, after Al Jazeera reports that "desperate Gaddafi might hit oil facilities in an attempt to fend off encroaching rebels, sparking a human catastrophe." And obviously in order to prevent this, the US will be "forced" to institute a no fly zone, thereby commencing a full blown invasion of the country, and eventually destabilizing the region completely.