Timmy elsewhere

At the ASI.

When the world\’s largest bond fund holds no US Treasuries, you might want to think about where the bond vigilantes are.

2 thoughts on “Timmy elsewhere”

  1. I find the language bizarre. He’s ‘on strike’? What does that mean? He’s not contractually obliged to buy US govt bonds. I assume he does what he thinks will give him the highest return. When a fund manager decides not to buy BP shares, does that make them on ‘strike’ too? Or a ‘BP’ vigilante?

    I also think you must not pay too much attention to one single manager. His track record is goodish, about 1% a year higher than the benchmark. But it doesn’t mean he is infallible – the price of Treasuries has risen since (presumably) he sold his holdings. And a rise in yields doesn’t necessarily mean disaster for the economy, in fact I would expect them to rise in line with a recovering economy.

  2. but in a world where every policy seems driven by a lobby, it is interesting that the biggest lobbyist for policies such as QE2 (buy the most expensive and liquid asset on the planet to help save the economy. By the way, I have plenty here to sell you) has now sold out. Presumably we will shortly be hearing how QE3 isn’t necessary and that QE2 should stop. Hell, even rates should rise. Then Mr Gross will be happy to buy back those Treasuries with a 5 handle (as they annoyingly say in bond markets)

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