Bill Gross Update – “Life and Death Proposition”

Mr. Gross is out again with one of his sure to be well read and quoted letters.  The title alone will probably make a few headlines.

This time he must have written his piece looking out over the Pacific from his office (yes, Newport Beach, CA is a nice place for a headquarters), as he gets a little existential, starting with quotes from Virginia Woolf (see below).

His thoughts and those of his colleagues at PIMCO do get a lot of press and can sometimes move markets.  They are always worth a read.

Enjoy!

  • ​Recent central bank behavior, including that of the U.S. Fed, provides assurances that short and intermediate yields will not change, and therefore bond prices are not likely threatened on the downside.
  • Most short to intermediate Treasury yields are dangerously close to the zero-bound which imply limited potential room, if any, for price appreciation.
  • We can’t put $100 trillion of credit in a system-wide mattress, but we can move in that direction by delevering and refusing to extend maturities and duration.

​Where do we go when we die?
We go back to where we came from
And where was that?
I don’t know, I can’t remember
             Virginia Woolf, “The Hours”

 

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