PIMCO, Bill Gross, Bond Funds???

Today PIMCO's co-chief investment officer Bill Gross came out with these statements:

"The U.S. government needs to start using more of its money to support markets to stem a burgeoning ``financial tsunami,'' "Banks, securities firms and hedge funds are dumping assets, driving down prices of bonds, real estate, stocks and commodities".

``Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami,'' "If we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury.''

See Bloomberg story here, excerpted from the garbage he published on his website.

Does this sound like an adult bond fund manager of apparently the biggest bond fund in the world??? What a whiner-he wants the US Government to help. Since when have Governments made money for private individuals??? Any time they interfere in the markets-it is always for the bad of private individuals. Now Mr. Gross wants the Government to save the leveraged bets. He makes me laugh-he is at the top of the heap of people who know very little, do nothing, and are paid by the foolish public millions of dollars to "manage" a bond fund.

Who the heck created this idea anyway-of actively managing a bond fund? Bond funds are low risk-why pay a manager??? Sounds bizarre. Much like municipal bond insurance salespeople like MBI and ABK, bond funds are another scam of Wall Street. They charge 1% fees for making you 5-8%!!!! At least in a stock fund you can understand paying a manager 2% if you make 20-30%, but a bond fund is a completely silly way to pay someone to do nothing at all.

Any time assets are not very volatile-bonds, developed world currencies against each other---one should not "invest" in funds of those. Manager/Trader skill is in managing volatility to make money for you-and low volatility or low risk markets are not a skill game. Better to buy any random collection of bonds-some AAA, some junk---u know how much we trust those rating agencies....:-). As I mentioned in a post earlier- I dont trust Government bonds-trust corporate bonds more. The academic crap called risk free rates is all backwards-it is written by Nobel Laureates in the US and Developed worlds-Governments who haven't defaulted on their debt in the last few hundred years. That makes them think that Government bonds are "safer" than corporate bonds---that is not true. A diversified portfolio of corporate bonds is less risky, in my opinion, than holding some Government bonds of the USA or a developed country. Of course it is even less risky, relatively speaking, for a developing country-where Government defaults are quite common.
Think of how many bogus Nobel prizes have been awarded in Economics on the concept of risk free rate being equated to Government bonds.


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