The Mother of All Bankruptcies

The budget problem that the country faces isn’t merely big.
It isn’t even really, really big.

It’s much bigger, and more dangerous, in actual fact, than politicians are willing to acknowledge.

Bill Gross: Without A Gigantic Reform Of Entitlements, America Will Default

 

PIMCO boss Bill Gross has been warning against Treasuries for awhile, and recently he abandoned them completely.

In his latest investment outlook, he warns that America will default, thanks to trillions in entitlement obligations:

Should We Be Alarmed That The Biggest Bond Fund In The World Has Dumped All Of Their U.S. Treasury Bonds?

Bill Gross, the manager of the biggest bond fund in the world, has forgotten more about bonds than most of us will ever learn. That is why the big move that PIMCO has just made is so unsettling.  At one time PIMCO held more U.S. government debt than any other bond fund on the globe, but now news has come out that they have gotten rid of all their U.S. government-related securities.  So should we be alarmed? 

Bill Gross Dumps All Treasuries, Brings Total "Government Related" Holdings To Zero, Flees To Cash - No QE3?

And many thought Bill Gross (managing director and co-CIO at Pacific Investment Management Co.) 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).