http://www.zerohedge.com/article/pimco-still-short-us-treasurys-changes-reporting-methodology-treasury-exposure-has-85-billio
Poor Bill, what a chump he is. What is most noticeable is not that he is net short now, it's what his exposure was when it peaked in summer of '10, and how he has been relentlessly selling from approaching $300 billion, to net negative. Just relentlessly selling for about a solid year.
During that time treasuries rose spectacularly, sold off spectacularly, and are now rising again spectacularly. Now look at the graph of his selling of his net long position. Relentless selling with no regard whatsoever for whether the market was rising or falling strongly. See? He is playing an exposure game, not a short-term trading game. Like I said, in the long run, he'll
always win, in my opinion.
If his normal exposure is long almost $300 billion, and he's now net short maybe $10 billion, with over a trillion in total assets under management (not in this fund, in total at Pimp-Co), what difference do the current swings in the ZN or ZB matter to him? Less than absolutely zero. Think about it.
Even as a simple calculation (it wouldn't be, he may be doing swaps, there may be leverage involved, and so on ...), if he had $10 bil on $1 tril, that's a 1% position. If the ZN moved 12 full points against him, that's a 10% move. 10% of 1% is 0.1%. Wow, if the ZN smokes up 12 full points against him he may be down 0.1% in total. Whew, I bet he's sweating it big time.
This guy
never loses, overall. And when bonds finally collapse, he won't be thinking about that $10 bil short, he'll be thinking about the near $300 bil exposure he sold into a market that was happy to take it from him.
That's his play of the century. Just my humble opinion.
