Bill Gross

Re: Bill Gross

Postby winston » Thu Jun 11, 2009 8:24 pm

The General Motors failure is a harbinger of things to come for the United States as a whole, says bond guru Bill Gross.

"I think it is important to recognize that General Motors is a canary in this country's economic coal mine; a forerunner for what's to come for the broader economy, the Pimco co-CEO writes in a note to investors.

"Their mistakes have resembled this nation's mistakes; their problems will be our future problems."

The most significant comparison between GM and the U.S. economy is the enormous unfunded healthcare and pension liabilities they share, Gross says.


– Newsmax
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Re: Bill Gross

Postby winston » Mon Jul 20, 2009 9:43 pm

Pimco’s Gross Reduces Mortgage Holdings, Adds to Cash By Wes Goodman and Dakin Campbell

July 20 (Bloomberg) -- Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., reduced holdings of mortgage debt last month and added to cash and equivalent securities.

Gross cut the $161 billion Total Return Fund’s investment in mortgage bonds to 54 percent of assets, the lowest in almost two years, from 61 percent in May, according to a report on Pimco’s Web site. Gross trimmed holdings of government bonds to 24 percent of assets, the least since February, from 25 percent.

In an investment outlook published earlier this month, Gross said investors should look for “secure income” offered by bonds and dividend-paying stocks. “The outlook for risk assets -- stocks, high-yield bonds, and commercial and residential real estate will involve just that -- risk,” he said in the July 1 report.

Economic growth will be slower and profit margins will be narrower than in the past decade, Pimco’s co-chief investment officer wrote in the July 1 report. An index of consumer confidence declined to 47 this month from 49.3 in June month, according to a Bloomberg News survey of economists before the Conference Board’s report July 28, as rising unemployment undermines optimism the U.S. recession is about to end.

Nobody from Pimco was available to comment in Asian trading hours today.

Record Writedowns

The financial crisis, which started with the collapse of the U.S. property market in 2007, has triggered $1.51 trillion of writedowns and credit losses at banks and sent the global economy into its first recession since World War II. U.S. unemployment rose to 9.5 percent in June, the most since 1983.

Mortgage-backed securities returned 3.1 percent this year, while Treasury bills rose 0.2 percent, according to indexes compiled by Merrill Lynch & Co. Treasury 10-year notes handed investors a 9.5 percent loss as signs of improvement in the economy cut demand for the relative safety of government debt.

Demand for higher yields has increased in the past week as stocks rallied around the world.

“We’re getting improvement in risk appetite,” said Adam Donaldson, head of debt research in Sydney at Commonwealth Bank of Australia, the nation’s second-largest lender. “The immediate trend is that the equity market is looking very strong.”

MSCI’s World Index of stocks rallied 6.6 percent last week, the most in four months. MSCI’s index for Asia and the Pacific excluding Japan rose for a fifth day, gaining 2.3 percent. Today is a holiday in Japan.

Yen, Dollar Fall

The yen and dollar fell to two-week lows versus the euro, reflecting reduced demand for the Japanese and U.S. currencies as a refuge.

The yen dropped to 134.25 versus the euro as of 7:28 a.m. in London from 132.85 in New York last week. The dollar declined to $1.4168 from $1.4102.

Gross kept his allocation to corporate debt unchanged at 18 percent of assets.

Cash comprised negative 6 percent, the most in 2009, rising from negative 14 percent. The fund can hold a so-called negative position by using derivatives, futures or by shorting.

Derivatives are financial obligations whose value is derived from an underlying asset such as debt, equities or commodities. Futures are agreements to buy or sell assets at a later specific price and date. Shorting is borrowing and selling an asset in anticipation of making a profit by buying it back after its price has fallen.

The Total Return Fund returned 10.9 percent in the past year, beating 96 percent of its peers, according to data compiled by Bloomberg. The one-month return is 1.2 percent, outpacing 45 percent of its competitors. Pimco, based in Newport Beach, California, is a unit of Munich-based insurer Allianz SE.
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Re: Bill Gross

Postby winston » Wed Jul 22, 2009 9:10 pm

Bond fund giant Pacific Investment Management Co., whose founder and co-chief investment officer Bill Gross has been persistently bearish on Treasurys, is changing its tune.

In a research report released Monday on its Web site, Pimco said it plans to take exposure in the five- and 10-year portion of the Treasury maturity curve because yields are near the top of the company's expected range.

The change in investment strategy is based on Pimco's view that economic growth in the developed world will be slow, as consumer spending may be hampered by high levels of debt, while deleveraging will weigh on financial institutions. Uncertainty over fiscal policy and protectionism is also contributing to the muted growth outlook, the report said.

Given the weak economic outlook, the Federal Reserve is unlikely to tighten before summer 2010, and policy makers in many countries are likely to "overstay with loose monetary policy."


– Dow Jones Newswires
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Re: Bill Gross

Postby winston » Thu Jul 30, 2009 4:01 pm

Pimco’s Gross Favors ‘Strong’ Company Bonds, Stocks (Update1) By Wes Goodman

July 30 (Bloomberg) -- Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said investors should favor debt and stocks of “strong” companies, and assets in emerging markets with improving economic growth.

Investors in riskier assets will get “haircuts” because U.S. economic growth will be closer to 3 percent than the range of 5 percent to 7 percent for the past 15 years, Gross said. The U.S. economy will begin to recover in the second half of 2009, he wrote in his August investment outlook on Pimco’s Web site.

U.S. corporate bonds are outperforming Treasuries in 2009, the first time in three years, as signs of improvement in the economy led investors to seek higher-yielding assets. Franklin Templeton Investments, a mutual fund company that oversees $450 billion, and JPMorgan Chase & Co., the second-largest U.S. bank, are also recommending company bonds.

“There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields,” Gross wrote. “A journey to 3 percent nominal GDP means default/haircuts for assets on the upper end of the risk spectrum, as well as extremely low yielding returns for government and government-guaranteed assets at the bottom end.”

Gross also favors emerging markets where growth prospects are “tilted upward,” according to the report.

( Every expert has been saying buy Emerging Markets. Do they know Emerging Markets ? Why would emerging markets grow if the developed markets are not going anywhere ? China can continue to forced their banks to continue lending ? China can have three more RMB4t stimulus program ? )

‘Tangible Earnings’

“Stock prices will ultimately depend on tangible earnings growth in the form of increased dividends, not green shoots hope,” Gross wrote. High-risk bonds, commercial real estate and lower-quality municipal bonds “may suffer,” the report said.

Federal Reserve Chairman Ben S. Bernanke used the term “green shoots” in an interview aired March 15 on CBS Corp.’s “60 Minutes” to describe signs of improvement in the economy.

U.S. corporate bonds rated A to AAA by Standard & Poor’s returned 7.3 percent this year, according to indexes compiled by Merrill Lynch & Co. The U.S. Treasury Master Index handed investors a 4.9 percent loss, according to Merrill. MSCI’s World Index of stocks has returned 13 percent so far in 2009.

The Templeton Global Bond Fund is avoiding debt issued by the U.S., the U.K., and Germany and has sold Japanese yen it purchased last year, said John Beck, the company’s co-director of international bonds.

‘Bullish View’

Templeton is favoring U.S. bank debt and municipal bonds, Beck, who is based in London, told reporters on July 27 during a trip to Singapore. The company, which is in San Mateo, California, is also investing in a mix of local-currency and dollar-denominated securities in emerging markets, he said.

JPMorgan has a “bullish view” on high-grade corporate bonds, it said in a report July 24.

“Money continues to be allocated to the high-grade bond asset class,” said the report by JPMorgan analysts including Eric Beinstein, co-head of U.S. credit strategy, in New York.

For the week ended July 22, high-grade bond funds drew $1.4 billion, above the 13-week average of $1 billion, the report said.

The Federal Reserve said yesterday that most of its 12 regional banks detected a slower pace of economic decline in June and July, further signs the worst U.S. downturn in at least five decades is closer to an end.

U.S. Contraction

The financial crisis, which started with the collapse of the U.S. property market in 2007, has triggered $1.52 trillion of writedowns and credit losses at banks and other institutions and sent the global economy into its first recession since World War II.

The U.S. economy shrank 1.5 percent in the second quarter according to the median forecast in a Bloomberg News survey of economists before the Commerce Department reports the figure tomorrow. The first-quarter contraction was 5.5 percent.

Gross’ $161 billion Total Return Fund returned 10.9 percent in the past year, beating 96 percent of its peers, according to data compiled by Bloomberg. Pimco, based in Newport Beach, California, is a unit of Munich-based insurer Allianz SE.
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Re: Bill Gross

Postby winston » Thu Sep 10, 2009 10:24 pm

Bond King Bill Gross released his September investment outlook...

He says deleveraging, deglobalization, and reregulation ("DDR") will lead us to a sustained period of slow growth, or the "New Normal"...

Gross says DDR will permanently change business and economic models we take for granted... The rest of the world will no longer produce goods for the U.S. in return for our printed money. And unless other world powers develop a consumer ethic of their own, this will lead to slow growth.

Gross says his firm, PIMCO, has drawn the following conclusions:
1) Short-term interest rates will remain low for an extended period of time.
2) Following government stimulus efforts and guarantees are "keys to future investment returns."
3) Asia and "Asian-connected" economies will dominate future growth.
4) The dollar is vulnerable in the long term.

Source: S&A Research
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Re: Bill Gross

Postby winston » Fri Sep 11, 2009 9:06 am

Forget Housing, Says Bill Gross by Matthew Craft

Don't be misled by better housing numbers, Gross says. The economy is in for a slog.

If you have taken solace in recent housing figures, thinking that once prices recover your investments will take off, Bill Gross suggests you think again.

http://www.forbes.com/2009/09/08/bill-g ... =dailycrux
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Re: Bill Gross

Postby winston » Wed Oct 28, 2009 8:03 am

Sounds like Marc Faber just before the Financial Tsunami ...

BILL GROSS: “ALMOST ALL ASSETS APPEAR TO BE OVERVALUED”

Bill Gross, arguably the most powerful money manager in the world, has joined the ranks of Jeremy Grantham in saying stocks have risen due to artificial influences and are now substantially overvalued.

In his latest monthly outlook Gross says “almost all assets appear to be overvalued on a long-term basis”.

http://pragcap.com/bill-gross-almost-al ... overvalued
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Re: Bill Gross

Postby kennynah » Wed Oct 28, 2009 8:33 am

“almost all assets appear to be overvalued on a long-term basis”.

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Re: Bill Gross

Postby winston » Tue Nov 03, 2009 8:16 am

Gross: Dollar Will Keep Falling October 30, 2009 ; By: Dan Weil

Bond manager superstar Bill Gross says the dollar will keep falling.

That’s because it protects U.S. trade by pushing down our export prices and pushing up our import prices.

"I think the dollar is an over-owned currency,” he told CNBC. “The Chinese, the Asians have basically owned too many dollars for too long."

The U.S. government favors the dollar’s decline, Gross says. "Let's face it, a lower dollar is basically a protectionist barrier."

To be sure, the Chinese aren’t so happy about the drop.

“Let's face it, they (the Chinese government) are earning zero percent on their Treasury bills or close to it, and they're suffering a depreciating currency at the same time. So their assets are going down by 5 percent to 10 percent a year," Gross said.

Gross reiterated his view that the economy is in a “new normal,” with slower growth.

As a result, debt will be slashed, he said. "The new normal basically recognizes that we're in an economy that's de-levering and that we'll move at some point to an average level of leverage that's much lower than before."

Not everyone agrees with Gross about the dollar. Investment legend Jim Rogers says the currency is due for an upward correction before it falls again.

“Whenever you have everybody on the same side of a boat, you know it’s time to move to the other side for a while. We may have a rally in the dollar,” he told Bloomberg.

Source: Newsmax

http://moneynews.newsmax.com/streettalk ... 79378.html
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Re: Bill Gross

Postby millionairemind » Sun Nov 08, 2009 2:49 pm

Investment Outlook By Bill Gross, November 2009
The six-month rally in risk assets – while still continuously supported by policymakers – is likely at its pinnacle.
http://www.pimco.com/LeftNav/Featured+M ... vember.htm
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