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Bill Gross says he has changed his mind on Treasury bonds maturing in 10-years or less thanks to...

Bill Gross says he has changed his mind on Treasury bonds maturing in 10-years or less thanks to Japan's epic monetary easing. The premise: yields that look meager to U.S. investors look rich to the Japanese. "They [Treasurys] yield 125 basis points more" than what investors are getting on a 10-year JGB. (Previously: JGB yields plummet) 
Comments (10)
  • Can you say carry trade?
    9 Apr 2013, 03:45 PM Reply Like
  • Looks to me like real yields have normalized now. Inflation probably going to be in the low ones in Japan even with all the easing and 2-3% here. So -100 bps or so regardless of what you buy. In this case there is a compelling reason that the carry trade will hold up in the short term, long term yields must rise on JGBs or inflation must increase. Seems very dangerous to me.

     

    My view is that both are terrible but if your job is to sell bonds, maybe you cant say that. If you can't stomach the risk of stocks best to stick in cash or even gold IMO.
    9 Apr 2013, 03:55 PM Reply Like
  • TLT is up, what, 7% in a month? Stocks are flattish, gold is down, cash is dying on the vine. Bond seasonality under QE is a delightful thing.

     

    That said, I'm expecting another pullback to c. the 50 sma, Goss touting it only reinforces the feeling.
    10 Apr 2013, 01:37 AM Reply Like
  • Bill Gross has move from market guru to celebrity.

     

    Once the media recognizes these gurus, they get a "big head" and can't make a good market prediction.

     

    Bill Gross said to get out of bonds and then it took off on the biggest bull market ever. Bill Gross said to buy banks. They then crashed and burned in the biggest market debacle in history. I bought Wachovia when he recommended it and then, OH! gosh- Wachovia doesn't exist anymore. The media forgives these gurus for their mistakes. They just love the celebrity status. OH LOOK! Bill Gross said..................... We must report that.

     

    When these gurus move to celebrity status they think they can't make a bad call. Research goes by the way side and the media believes what every they say. Well, time catches up to them.

     

    Bill Gross was great - but not anymore. The media loves their celebrities and is very slow to forgive them. Anything for a headline.

     

    Time to move on to the next market guru. This one is spent.

     

    Oh, I long for Louis Rukeyser.
    9 Apr 2013, 08:49 PM Reply Like
  • Didn't Gross get his head handed to him a couple of years ago trying to run upstream with US Treasuries? Frankly, his predictions have been pretty feeble lately. He may be right this time, but I know I wouldn't bet any of my money on him being correct.
    10 Apr 2013, 01:39 AM Reply Like
  • Translation: Buy anything besides a Japanese ten year, because everything is cheaper than a Japanese ten year.

     

    I dont understand why this is good for treasuries specifically though.
    9 Apr 2013, 10:28 PM Reply Like
  • I'm buying tulip bulbs. The yield is low and they're perishable if you don't keep them cool and dry, but after western civilization collapses I'll have a pretty garden and Bill Gross will have nothing at all...
    9 Apr 2013, 11:25 PM Reply Like
  • Ben-sama says domo arigato Gross-sama. As for me, I'd just as soon own California muni's as US bonds.
    9 Apr 2013, 11:33 PM Reply Like
  • Gross and Buffett are old news. No pun intended.
    9 Apr 2013, 11:45 PM Reply Like
  • It's a good call -- about a month late. I'm taking Gundlach over Goss in any bond-sumo wrestling match. As far as all you bond bears, yields are not taking off any time soon, equities have a lot more to fear in the next months IMO. Long term UST has handily outperformed the SPX over the last month.
    10 Apr 2013, 01:33 AM Reply Like
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