The Great Escape: Delivering in a Delevering World

The world's biggest bond fund manager is telling investors to run towards commodities (or tangible assets).  Commodities are basically the antithesis of bonds, so readers may want to read up on Bill Gross' letter to shareholders before dismissing his investment thesis.

http://www.pimco.com/EN/Insights/Pages/The-Great-Escape-April-2012.aspx

PIMCO is long gold

I previously blogged about how PIM(P)CO was ramping up their equities team.  I snooped around on their website for recent hires, and it looks like they have recently beefed up their equities team <click here>.

I sent this email to a group (the infamous BORG group of activist investors) last week (May 9):

When the biggest bond fund manager in the world is SHORT bonds (including Treasuries and mortgage-backed securities), he's expecting a bond collapse.  And because Bill Gross is building up his equities team (including emerging markets), he thinks the Asian growth story in stocks is alive and well.  One of their hires is a foreign exchange (forex) and derivatives trader, so he's also hedging.

It looks like PIMCO, the world's largest bond fund, is long gold after all, via their equities fund exposure:

http://money.cnn.com/2011/05/11/pf/anne_gudefin_pimco.fortune/

The largest position in the fund is gold, which we think is a very good form of protection against what can go wrong. We were encouraged by the fact that a lot of the central banks, especially in Asia, are big buyers. We think that's an underlying trend that's very favorable for gold.

I also follow Rob Arnott, who runs the PIMCO's All Asset Fund.  He's a proponent of sound money as well, and typically bullish on precious metals, the ultimate hedge against debased currencies.

Biggest bond funds receiving inside information from the Fed

http://www.zerohedge.com/article/here-how-worlds-biggest-bond-funds-and-others-just-not-you-get-advance-notice-what-fed-about

Reuters has just released a stunning special report detailing how the Fed leaks all important, non-public, and ever so material, information to private parties.

...leaking the most important decisions made on "behalf of the middle class" so that a few multi-billionaires can make a few extra soon to be worthless dollars.

Where's the SEC? Oh, that's why right, we ARE talking about the Fed and the SEC here...

US economic data alarming

http://www.bloomberg.com/news/2010-08-27/pimco-s-el-erian-says-alarming-data-signals-show-u-s-economy-faltering.html

U.S. economic data are “alarming,” signaling the recovery is losing momentum, Mohamed A. El-Erian, Pacific Investment Management Co.’s chief executive officer, wrote in an opinion piece in the Washington Post.

Unemployment is high, consumer credit is shrinking and small companies are having trouble obtaining bank lines of credit, wrote El-Erian, who is also co-chief investment officer at Pimco, which runs the world’s largest bond fund. Increased government spending and additional debt purchases from the Federal Reserve are unlikely to spur a rebound, he wrote.

Gee, ya think?

Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, cut his estimate for growth this quarter to a 2 percent annual pace. As recently as two weeks ago, he projected 4.6 percent.

Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, estimates a 2.3 percent rate of expansion, down from a June forecast of 4.1 percent.

These geniuses forecasted over 4% growth earlier? Their clients must be feeling warm and fuzzy on their stellar accuracy.