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Last month bond giant PIMCO officially abandoned Treasuries completely.In the meantime, its chief Bill Gross has been warning of a US debt default, while wondering who would stick around to buy Treasuries following the end of QE2.
Well, now the firm is getting even more aggressive with its stance.
It’s gone short the Treasury market, according to its latest holdings (via Zero Hedge). Specifically, 3% of its portfolio is bet against Treasuries.
Given how vocally negative Gross has been on Treasuries, this stance can’t be a huge surprise. Still, the fact that the world’s largest bond manager — which has made a fortune riding the great bond bull over the years — is short US bonds is a huge turn. That this comes amid such anxiety over the Federal debt also raises the stakes.