This week, bond god Bill Gross just made a super-long bet on the long end of the yield curve, coming right after a historic rally in fixed income. According to the BusinessInsder writeup it was a gigantic shift from his stance earlier this year, when he bet against Treasuries -- a bet that famously worked out badly for him.
The curious thing about this is that his short bet got TONS of attention (including a big story in The Atlantic), whereas his new long bet is only getting a little.
The funny thing about this is that in terms of implication for the economy, the new long bet is much more significant. Going super-long the long end of the curve implies that Gross thinks yields will collapse even more, which would likely happen in a major economic collapse of some sort.
This new bet should be getting tons of attention for what it says: If it pays off, that will be very ominous. Yet it's hardly getting a peep from most people.
Read more: http://www.businessinsider.com/the-irony-of-bill-gross-huge-bet-on-treasuries-2011-10#ixzz1amTSEFsg
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