Archive for the ‘obligationer’ Category

Bill Gross går kort amerikanska statspapper

För en dryg månad sedan överraskade Bill Gross marknaden med att helt göra sig av med amerikanska statspapper i PIMCOs Total Return Fund, världens största obligationsfond.

Enligt ZeroHedge har Gross nu till och med gått ännu längre och går kort amerikanska statspapper, samtidigt som andelen kontanter nu är hela 31%.

Gross senaste tilltag innebär att han går från snack till handling och därmed sätter fondens pengar på spel. Om han har rätt så väntar något mycket otrevligt runt hörnet och jag tror vi alla vet vad.

Exclusive: Bill Gross Is Now Short US Debt, Hikes Cash To $73 Billion, An All Time Record

A month ago, Zero Hedge first reported that Bill Gross had taken the stunning decision to bring his Treasury exposure from 12% to 0%: a move which many interpreted as just business, and not personal: after all Pimco had previously telegraphed its disgust with US paper, and was merely mitigating its exposure. This time, in another Zero Hedge first, we discover that it is no longer business for Bill – it has now become personal (and with an attendant cost of carry). In March, Pimco’s flagship Total Return Fund (TRF) has now taken an active short position in US government debt: -3% on a Market Value basis (or $7.1 billion), and a whopping -18% on a Duration Weighted Exposure basis. And confirming just what PIMCO thinks of US-related paper is the fact that the world’s largest ”bond” fund now has cash, at a stunning $73 billion, or 31% of all assets, as its largest asset class on both a relative and absolute basis. We repeat: cash is more than PIMCO’s holdings of Treasurys and Mortgage securities ($66 billion) combined. To paraphrase: in March PIMCO was dumping everything related to US rates (see chart below). This is the first net short position that PIMCO has had in Government-related debt since the Great Financial Crisis of 2008, and going positive in February of 2009 only after it became clear that the Fed would commence monetizing US debt one month later. This is the closest that Gross has come to making a political statement and is now without doubt putting his money where his mouth is. The only event that could possibly derail Gross’ thinking is a huge market crash forcing a rush to Treasury safety. Alas, as has been made all too clear recently, US debt is no longer the safe haven it once was. Which begs the question: when will the TRF break out a ”gold” asset holdings line item.

And another side effect of the firm’s scramble away from debt and into cash is that the effective duration of TRF is now down to 3.6: only the second lowest since the 3.38 posted in December of 2008… when the world was on the verge of ending.

That Bill Gross is willing to risk a surge in redemptions (after all who would be wiling to pay PIMCO to manage a third of their assets in the form of supposedly devaluating cash) in order to make a statement about the credibility of the US government, and specifically the viability of its IOUs, is easily the only thing that the US government has to consider when evaluating the prospects for funding trillions and trillions of US deficits at ”acceptable” rates in the absence of further quantitative easing by the Chairman.

If Gross is indeed right, something very wicked this way comes.


LEAP: Gör er redo för en härdsmälta för amerikanska obligationer andra halvåret 2011

LEAP/E2020 har släppt sin senaste politiska och ekonomiska analys GEAB där man uppmanar sina läsare att göra sig redo för en härdsmälta för den amerikanska obligationsmarkanden under andra halvåret till följd av katastrofen i Japan. Läsning rekommenderas.

Här är ett utdrag från analysen:

Beyond its tragic human consequences, the terrible disaster that has just hit Japan weakens the shaky US Treasury Bond market a little more. In the GEAB No. 52, our team had already explained how the sequence of Arab revolutions, this fall of the “petro-dollar” wall, would translate during 2011 into the cessation of the massive purchases of US Treasury Bonds by the Gulf States. In this issue, we anticipate that the sudden shock experienced by the Japanese economy will lead not only to the halt in US T-Bond purchases by Japan, but it will force the authorities in Tokyo to make substantial sales of a significant portion of their US Treasury Bond reserves to finance the enormous cost of stabilization, reconstruction and revival of the Japanese economy.
With Japan and the Gulf States alone accounting for 25% of the total 4.4 trillion USD of US federal debt (December 2010), LEAP/E2020 believes that this new situation which is asserting itself during the first quarter of 2011, against a background of China’s increasing reluctance (holding 20% of US Treasury Bonds) to continue to invest in US government debt, carries the seeds for the collapse of the US Treasury Bond market in the second half of 2011, a market that now has only a single buyer: the US Federal Reserve.

It is certain that the context of the crisis of US local authority securities (Munis) and European government debt (the entire periphery of the EU, including the United Kingdom) that our team anticipated for this timeframe (see GEAB N°50 ), will only exacerbate the event. Moreover, it is highly significant that PIMCO the world’s largest bond fund manager decided, at the end of February 2011, to liquidate its US Treasury Bond holdings. And that was before the disaster in Japan!

PIMCO lämnar det sjunkande skeppet, dumpar sina amerikanska statspapper

På onsdagen framkom det att PIMCOs Total Return Fund, som är världens största obligationsfond, har dumpat alla sina amerikanska statspapper. Vi har flera gånger tidigare skrivit om den gigantiska statsfinansiella bubblan och det verkar helt klart som om Bill Gross, som förvaltar fonden, känner att det nu är dags att lämna skeppet innan det sjunker.

Bill hör till de mest pålästa och smarta förvaltarna i världen, varför detta är en otroligt viktig signal. En fallande obligationsmarknad kommer på sikt att leda till en massflykt till fysisk guld och silver.

Här är en artikel från Reuters:

PIMCO Total Return dumps U.S. government-related debt

NEW YORK (Reuters) – PIMCO’s Total Return Fund , the world’s biggest bond fund, has dumped all U.S. government-related securities, including Treasuries and agency debt, a source familiar with the fund’s holdings said on Wednesday.

In January, Pacific Investment Management Co.’s $236.9 billion Total Return fund slashed its U.S. government-related debt holdings to the lowest level in at least two years and increased cash and debt holdings from other developed nations.

Government-related securities include Treasuries, Treasury Inflation-Protected Securities, agencies, interest rate swaps, Treasury futures and options, and corporate securities guaranteed by the U.S. Federal Deposit Insurance Corp.

The Total Return Fund’s cash holdings had surged to $54.5 billion as of February 28 from $11.9 billion at the end of January. A PIMCO spokesman declined to comment for this story.

Bill Gross, the fund’s manager who helps oversee more than $1.1 trillion as PIMCO’s co-chief investment officer, has often railed against U.S. deficit spending and its inflationary impact. He has advocated buying bonds with ”safe,” higher yields — such as corporate bonds — that can withstand possible erosion of returns by inflation.

In December, PIMCO said it may start investing up to 10 percent of its assets in ”equity-related” securities, such as convertibles and preferred stock, after the first quarter of 2011.

”It’s certainly an important signal in the sense that they are allocating away from Treasuries in favor of a higher spread product,” said Christian Cooper, head of U.S. dollar derivatives trading at Jefferies & Co.

Och det här är vad en före detta PIMCO anställd hade att säga om betydelsen av denna händelse (via ZeroHedge):

This is a very big deal and the only time to my knowledge the fund has ever moved total US Treasury holdings to 0%.

To give this call some perspective, the PIMCO Total Return Fund is managed vs. the BarCap Aggregrate Total Return Index (this is the former LBAGG or Lehman Brothers Aggregrate).  The BarCap Agg index has a total allocation to US Government securities of around 40% (link here).  This means that PIMCO is underweight its bogey in US Treasuries by about 40 % which in the bond market is a MASSIVE underweight.  PIMCO has also reduced duration in the fund to 3.89 years which is the lowest since December 2008 at the height of the liquidity crisis.

Why is this significant?

Having worked at PIMCO for 4.5 years, I can tell you that this kind of a major allocation decision was not reached overnight nor was it reached without considerable debate by every senior member of the firm.  In other words, the decision to lower total US Treasuries to 0% was discussed by senior portfolio managers, senior account managers and many prominent outside consultants for days and perhaps even weeks before it was finally implemented.  They never do anything over there without vigorous debate and discussion.  For example, Alan Greenspan is a paid consultant to the firm and often participates in their quarterly Secular Outlook meetings.  I don’t know if Mr. Greenspan participated in the debate about this decision but I wouldn’t be surprised if he or others of his stature did.

By this move PIMCO is clearly indicating, almost by putting their reputation on the line because imagine the underperformance they face if they are wrong, that bond yields in the US will be rising soon, US Treasury prices falling and liquidity drying up to some degree.

Does this move make sense?

While it’s impossible to know the future, in my opinion this is something that should NOT be ignored.  The S&P has rallied about 25% on pure QE2 since late-August 2010 which is not organic or sustainable.  Commodity prices have surged and it is becoming well-documented that many companies are having a hard time passing along price increases without facing demand destruction: this leads to margin compression.  If rates do rise as PIMCO suggests, add into the mix a cost of capital that could go up by at least the move in Treasuries which Gross argues should be at least 150bps to compensate Treasury investors for their risk.  Which means that cost of capital could go up by at least 150bps while input costs are rising, margins are compressing and liquidity drying up.  This is a sure recipe for a sell-off so yes, I think this move by PIMCO makes sense.

Another thing to consider is that because of their sheer size in the fixed income market, PIMCO is a market mover no matter what they do.  So simply not being in the US Treasury market means a huge buyer is missing and rates will rise simply due to this supply/demand imbalance so to some extent, PIMCO can make interest rates go up all by themselves by simply not buying.  Very few organizations on the planet can exert this kind of pressure on rates outside of central banks.

Kollapsen på den amerikanska obligationsmarknaden fortsätter

I december förra året skriv vi om att den amerikanska ‘obligations-kollapsen’ har börjat. Under fredagen kom nästa milstolpe i den oundvikliga kollapsen då de långa obligationerna föll handlöst genom två viktiga stödnivåer. 10-åringen föll 11 punkter (0,11 procentenheter) till 3,65% och 30-åringen 8 punkter till 4,74%.

Propagandamaskinerna lär gå för högtryck de närmaste dagarna och ni lär höra löjeväckande förklaringar såsom att det är ‘återhämtningen’ som ligger bakom de stigande räntorna. Faktum är att alla (inklusive Kina) passar på att göra sig av med sina snart värdelösa amerikanska obligationer till Ben så länge han är beredd att köpa dessa inom ramen för QE2 på skattebetalarnas bekostnad. Som vi visat tidigare så är Ben nu största ägare av amerikanska statspapper. Jag kan garantera att människor i framtiden kommer att titta tillbaka på denna period i historien och undra hur vi inte kunde se vad som höll på att ske.

Skall bli mycket intressant hur Ben väljer att ‘spinna’ de stigande räntorna, då hela tanken med QE2 var att hålla de långa räntorna nere för att stödja den amerikanska bostadsmarknaden. Med tanke på hans kapacitet att blåljuga om inflationen, så lär han inte ha några problem att ljuga om detta heller.


Här är en kommentar från Dan Norcini:

Long Bonds Break To The Downside

The big development in today’s market session was the breakdown in the long bond. As you can see from the chart below bonds have been carving out a 5 week old sideways trading pattern bounded by approximately 122 on the topside and 119 on the downside. All sharp sell offs down to the latter level had met with buying that brought them back up to the top of the range where sellers once again surfaced. This impasse continued for more than a month with buyers looking to the Fed’s entrance into the market during its timed purchases of longer dated Treasuries in association with its QE2 program. Sellers were looking at surging commodity prices and other signs of upticks in manufacturing activity and retails sales numbers which suggested that the constant pump priming was producing some impact on the overall sluggish economy.

A thing to bear in mind from a technical aspect is that the longer a market runs in a sideways pattern, the more significant the breakout tends to be when once it occurs, no matter whether that be to the upside or to the downside. In the case of the bonds, the breakdown was to the downside. I should also note that volume on the sharp move lower was very heavy, always a good sign that the move is legitimate.

Follow through early next week will be important to see that this was not a one day wonder and that it is indeed the beginning of a major trending move.

If it is, what is so remarkable is that it is occurring in the face of total planned Treasury purchases of some $600 billion as announced by the Fed back in November. The entire purpose of that program has been to move long term rates lower and help with the dismal housing market and real estate sector which needs the low rates to boost  demand so as to mop up the huge overhang of houses and properties hanging over this sector of the economy. With today’s breakdown of the 5 year on out to the long end, interest rates are headed in a direction completely opposite than what the Fed has been intending!

Dagens graf: USA går om Kina och har nu största innehavet av amerikanska statspapper

ZH påpekar att USA från och med 22 november har gått om Kina och har nu största innehavet av amerikanska statspapper med 891 miljarder dollar. Kina hade statspapper för 883 miljarder dollar den 30 september och även om denna siffra kan stiga något vid nästa publicering av TIC data så det är helt otänkbart att de har köpt lika mycket som Federal Reserve.

Kategorier:obligationer Taggar:,

WSJ: Federal Reserve kommer köpa obligationer utan tidsbegränsning

Politiker och centralbanker använder sig ofta av media för att ‘läcka’ viss information om en kommande händelse, dels i syfte att testa hur den mottas av befolkningen/marknaden och dels för att mentalt förbereda densamma på vad som komma skall.

Många menar att Wall Street Journal och dess reporter Jon Hilsenrath används av Federal Reserve för att just ‘vägleda marknaden’ och förbereda den på vad som komma skall. Därför kommer marknaden att lägga extra vikt i vad som sägs i Hilsenraths senaste artikel där nästa våg av kvantitativa lättnader (QE2) och omfattningen av dessa diskuteras. Slutsatsen i artikeln är att Fed ‘bara’ kommer att köpa obligationer för 100 miljarder dollar i månaden – utan tidsbegränsning.

Här är Zero Hedges kommentar:

• First, this is not news, and was disclosed by Ambrose Evans-Pritchard about a week earlier.
• Second, $100 billion a month is precisely what a $1 trillion QE action would amount to, as the Fed can not possibly do more than $25 billion of POMOs a month without thoroughly blowing up the stock market, courtesy of endless excess liquidity.
• Third, as we discussed previously, not even Primary Dealers have enough Treasurys in inventory to satisfy this much demand (in fact, according to the New York Fed as of Sept. 15 PDs only had just over $60 billion in UST holdings on hand).
• Fourth, piecemeal monetization of Treasurys will have a smaller impact on overall rates and MBS prepayments, both of which are key goals for the Fed. This is stupid because as Hatzius notes: ”The more you commit to large amount of purchases up front, the bigger effect you’re going to get.” And if there is one thing the Fed is, it has never been shy about intervention.
• Fifth, what will be the metric for the Fed to determine when enough is enough? Will the Fed merely set a DJIA threshold past which it will consider it’s job solver (and forget all that bullshit about inflation and unemployment targets – even the San Fran Fed said that unemployment is about to go back above 10% and stay there for 2011). So what will be the Fed’s cut off for indirect equity market intervention: 12K? 15K? 36K? And what about oil: $100? $200? Revolution?
• Sixth, again as we discussed earlier, we most certainly expect rates to plunge upon any announcement, and MBS prepayments to spike. This means that the Fed will be forced to not only purchase $100 billion in USTs per month, but may have to almost double that to account for its shrinking holdings of MBS/Agencies.
• Seventh, and most important, is Bullard’s admission that even $100 billion of QE a month (and possibly up to $200 billion assuming prepays) is equivalent to outright monetization (as it adds up to $1.2 trillion a year) ”Mr. Bullard says the idea of doing more than $1 trillion of purchases a year ”gives me pause” because that is how much net debt the Treasury will issue this year, meaning the Fed would be financing it all.” In other words, the Treasury will have to issue ever more debt to satisfy the open mandate for demand (possibly all the way up to double the $1 trillion per year in issuance). That should not be a problem. What is however, would be the implicit lie that Tim Geithner will have committed by swearing on live TV that the Fed will not monetize debt. Alas, as Bullard confirms, the Fed would be doing just that. Which incidentally is precisely what the Weimar government was doing before the hyperinflation train took off.

In other words, Hilsenrath’s speculation today does nothing to change our conclusion that very soon, the Fed’s ravenous demand for assets will result in a break in the rates market, and will take equities, commodities (inversely) and last, but not least, the dollar with it.

Kategorier:obligationer, Statsfinanser Taggar:, ,

Hemliga kryphål i EUs räddningspaket som uppmuntrar ‘grisarna’ att blanka sina egna statspapper

Brittiska The Telegraph har hittat vad som ser ut att vara två kryphål i EUs stora ‘räddningsöverenskommelse’ som gör det möjligt för länder som deltar att helt dra sig ur, vilket skulle få ödesdigra konsekvenser för euron och finanssystemet i stort. Den första är kanske inte så överraskande medan den andra förklarar varför de största säljarna av europeiska statspapper (och/eller köpare av CDS försäkringar för europeiska statspapper), troligtvis är de nödställda europeiska regeringarna själva.

Den första handlar om att räddningspaketet omedelbart kommer att annulleras om det visar sig att det bryter mot EUs klausul mot förbud om räddning, vilket betecknas som osannolikt men inte tillräckligt omöjligt för att marknaden skall känna sig lugn.

Den andra hemliga klausulen säger att om ett land inte kan låna upp kapital till räddningspaketet till en ränta som är under 5%, vilket var den överenskomna räntan för Grekland, kan det landet välja att avstå från att bidra till räddningspaketet.

Enligt The Telegraph har BNP Paribas sagt att det snabbt skulle kunna eskalera till en systemkris om Spanien hamnade i en sådan situation, eftersom de övriga länderna inte kan hantera en allt tyngre börda. Banken varnade för att euro-projektet snabbt skulle kunna sönderfalla om dessa kryphål någonsin skulle sättas på prov.

”Många har frågat sig hur till synes intelligenta människor kan komma upp med ett räddningspaket för Grekland där Grekland själva är tänkt att bidra till sin egen räddning. Nu vet vi vad baktanken var”, skriver ZeroHedge i en kommentar. I samma stund som Portugal, Spanien och Italien dras ned av vargflocken kommer deras medverkan i räddningspaketet att sluta. Och när det sker kommer kostnaden för hela paketet att bäras av den ‘rikaste’ medlemmen av IMF, dvs USA, fortsätter man.

ZeroHedge är övertygande om att de stora incitamenten för att sabotera sin egen upplåning kommer att leda till att den sk räntespreaden mellan ‘grisarna’ och Tyskland ännu en gång kommer att skjuta i höjden.

”Summan av kardemumman är att hela EU nu har stora incitament att sabotera sin egen upplåning, och de behöver inte ens lägga ner alltför mycket arbete på att lyckas. Allt som de länder som befinner sig på gränsen behöver göra är att höja deras upplåningskostnader över 5%, vilket för de flesta bara är ett par räntepunkter bort från var de flesta befinner sig redan nu.

När allt kommer omkring så har USA inget annat val än att rädda dem. Bernanke har gjort det klart att hans chefer på Wall Street inte kommer att tillåta att deras europeiska kollegor kommer att dras med ner av någonting så trivialt som insolvens, vilket i sin tur skulle avslöja just hur bankrutt vårt eget finansiella system är. Detta är de perversa incitament för vad som nu officiellt kallas för fascistisk kapitalism”, skriver ZeroHedge i en sammanfattande kommentar.