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HenryTo
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 Posted: Wed Apr 04, 2007 12:56 pm Post subject: PIMCO's Bill Gross Commentary |
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April 2007 commentary from Bill Gross:
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+April+2007.htm
Along the lines of what I wrote in our weekend commentary. The danger is in overregulation and tighter lending standards for months/years to come, not the current/potential losses from higher resets, etc.
| Quote: | | It will not be loan losses that threaten future economic growth, however, but the tightening of credit conditions that are in part a result of those losses ... Bulls and bears argue over websites as to the percentage of all lending that subprime and alternative mortgage loans provide but while important, the argument obscures the critical conclusion that tighter lending standards and increased regulation will change the housing outlook for some years to come. As past marginal buyers are forced to sell their home to prevent foreclosures, so too will future marginal buyers be restricted from buying them. |
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rffrydr
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| Posted: Tue Apr 24, 2007 9:09 am Post subject: |
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Trotted out on Bloomberg today:
Holding to "core" inflation values in forecast for FED cuts. Hedging short end with, yes, mortgages. Bearish on Junk and dollar.
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HenryTo
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rffrydr
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| Posted: Mon May 28, 2007 3:56 pm Post subject: |
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| Quote: | | We will attempt to position ourselves to exploit this secular change in emerging economies, mindful of our roots as well as the inherent risks in the world of levered finance that is flocking to be like Harvard or Yale during a period of rising valuations. |
Not a Yale man, methinks. As a practical matter, the last bear?
The chart of profits relative to GDP is what catches my eye. In this new nirvana that's what you'd expect but within the GDP measure itself is this nirvana. Return to the mean (or even Tech bubble days) is what I see in that chart.
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Last edited by rffrydr on Tue May 29, 2007 6:17 am; edited 1 time in total |
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HenryTo
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| Posted: Mon May 28, 2007 3:58 pm Post subject: |
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| Could be - also, there is nothing new in that commentary which we haven't discussed already. I will discuss this more in tonight's commentary. |
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rffrydr
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HenryTo
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| Posted: Tue Jun 26, 2007 10:53 am Post subject: |
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The bear Bill Gross is back. Following is his July commentary on subprime and housing:
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+July+2007.htm
Take-away points:
1) Bear Stearns is just the tip of the iceberg. One cannot paper over the problem if the physical assets - the houses - are sitting empty with no buyers, thus depressing the rest of the housing market.
2) Mortgage resets will continue to act as a depressant on liquidity into 2008 at least. Not sure of the multiplier effects here, however.
3) AAA not what it used to be. Quote: "But look at it this way: using the current default rate of 7% (3-4% total losses), the holders of some BBB investment grade subprime-based CDOs will lose all of their moolah because of the significant leverage. No need to worry about fictitious 100 cents on the dollar marks here. One hundred percent of nothing equals nothing. If subprime total losses hit 10% then even some single-A tranches face the grim reaper."
4) The continuing subprime problem will create a problem for other riskier asset classes, since hedge funds will need to liquidate other assets in order to stay afloat.
5) Because of all this, the Fed will start cutting rates in six months. |
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rffrydr
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| Posted: Tue Jun 26, 2007 11:37 am Post subject: |
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I generally agree. However one asset Hedge Funds may not liquidate is their HEAVY short positons in what remains of.... subprime!
--Or maybe they will, popping the assets. Irony of ironies!
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rffrydr
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HenryTo
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| Posted: Tue Jun 26, 2007 10:53 pm Post subject: |
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| Great video and interview. I recommend all our readers to view the interview right up to the end (the part where Gross says that the junk bond market has peaked). |
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HenryTo
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| Posted: Tue Jul 24, 2007 3:45 pm Post subject: |
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Bill Gross on income redistribution and the high yield, leverage loan, etc., markets in his latest August 2007 commentary:
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+August+2007.htm
| Quote: | | The U.S. economy in turn will not benefit from this tidal shift and increasing cost of financing. The Fed tightens credit by raising short-term rates but rarely, if ever, have they raised yields by 150 basis points in a month and a half’s time as has occurred in the high yield market. Those that assert that this is merely an isolated subprime crisis should observe very closely the price and terms that lenders are willing to accept with Chrysler finance this week. That more than anything else may wake them, shake them, and tell them that their world has suddenly changed. High yield lenders, perhaps if only in their frozen, frightened passivity, are signifying that the wealth must be redistributed, that the onerous oppressive tax in the form of low yields must change, and that finally enough is enough! |
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rffrydr
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| Posted: Tue Jul 24, 2007 11:36 pm Post subject: |
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I detect more than a note of consternation/relief at the end there--Bill's been holding his breath (and mouth) for quite some time--and just a little past his "capitulation." He should come hide in this message group with me. 
The EEM currencies finally taking a hit today and it looks like he missed buying the the top:
http://stockcharts.com/h-sc/ui?s=TEI&p=DAILY&b=5&g=0&id=p28793474921
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anti
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Joined: 07 Jun 2007
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| Posted: Wed Jul 25, 2007 4:04 am Post subject: |
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Today Fed's Plosser say's he sees no spread from subprime because banks have spread their risk...
Next story: Banks may hold more than half the loans needed to finance the Chrysler deal because of no interest in the market place.....
Hey Mr Plosser.. It's safer to drive when looking out the "Front window" rather than the rearview mirror.... |
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anti
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| Posted: Thu Jul 26, 2007 2:31 pm Post subject: |
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Hey Mr Plosser,
Seems to be spreading now....... |
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HenryTo
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