Daily Reading – Thursday, March 10, 2011

Zero Hedge: Exclusive: Bill Gross Dumps All Treasuries, Brings Total “Government Related” Holdings To Zero, Flees To Cash – No QE3?

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).

self-evident: Reading comprehension quiz

Multiple choice: What can we learn from this month’s Investment Outlook?

(a) Bill Gross thinks he’s Paul Bunyan because he stiffed a waitress 40 years ago.
(b) Bill Gross’s son Nick is at least as much of an ass as his father.
(c) PIMCO dumped all of its Treasury holdings on or before March 1, 2011.
(d) All of the above.

Zero Hedge: Nomura Commodity Desk Liquidation Blamed For Commodity Weakness

Reuters is reporting that Nomura is “downsizing” its commodities trading desk, resulting in some “job losses” – that is a modest euphemism. According to an insider, virtually the entire London commodity desk at Nomura was shown the door over the past several days, with deep cuts globally. This process however did not start today, and has been going on for a few days. As a result market expectations emerged earlier that there are commodity-related liquidations originating at Nomura. These are now likely very much unfounded, yet per two traders, the weakness in commodities is driven on expectations there is an legacy position unwind bottleneck.

Macro Man: Yours!

Another warning light that has been flashing amber, has been the 5y5y forward US Real Rate (see chart below – white line), which tends to lead changes in Economist consensus expectations by a couple of weeks (orange line). It looks to TMM as though economists have gotten ahead of themselves given the peak in this metric… TMM also note that this measure peaked in early-April 2010 before plunging lower as the Eurozone crisis escalated and US economic data disappointed. TMM suspect that economists will start to lower their 2011 GDP forecasts in the coming weeks.

FT Alphaville: More proof the Chinese have been using copper as collateral

Let’s just say it’s a bit like living off a loan taken out against your house. The loan won’t be a problem because you believe the price of your house will only go up.

FT Alphaville: Carry trade as canary in the coalmine

One of the more noticeable features of the “carry trade” is that the attraction of low yielding currencies as funding vehicles frequently leads to them proving initially unresponsive to impending crises.

The Big Picture: The End of QE: Part II

The first impact of the end of QE/ZIRP will be a rise in the US Dollar versus a basket of currencies. Some people have pointed out that the Yen never suffered during Japan’s multi-decade ZIRP policy. But Japan is a major exporter, and buyers of Japanese good must buy Yen to purchase Japanese goods. Perhaps their trade surplus helps explain why the Yen has not been pressured as the dollar was.

The Independent: World’s sixth mass extinction may be underway – study

Mankind may have unleashed the sixth known mass extinction in Earth’s history, according to a paper released on Wednesday by the science journal Nature.


This entry was posted on Thursday, March 10th, 2011 at 9:36 am and is filed under Daily Reading. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Comments are closed.


Get Adobe Flash player