Even more ironically, after eight full years of dopium, the last major Central Bank confirms taper:
"Speculation the Bank of Japan may wind back its monetary stimulus this year gripped markets on Tuesday after the central bank trimmed the amount of its purchases of Japanese government bonds."
Japan hasn't asked for its money back since Lehman:
Meanwhile...
Gross is of course just the latest (last?) money manager forced to believe in fake reflation, solely due to the misallocation of capital. He cites the breaking of the 25 year bond yield trend line. Never mind that bond yields are being forced higher as part and parcel of the late cycle rotation out of bonds into stocks. Ironically, it's the last holdouts capitulating who give the melt-up its final burst of momentum, thereby "confirming" the trade, if only momentarily. The same momentum that led long-time bear Jeremy Grantham to capitulate a few weeks ago. The momentum of his own money entering the risk markets.
Be that as it may, what goes in fast, comes out faster, as bulltards will learn via the high beta rotation:
The Fed is driving this con job
Gross apparently trusts the Fed more than he trusts the yield curve. The Fed is generating the deflation that makes a long-term rise in bond yields impossible:
The stock/bond ratio is in melt-up mode:
We learned yesterday via Ameritarde that dumb money asset allocations are the highest ever.
Which means that Billy Gross just threw in his lot with the dumb money.
Too bad. I thought he was a bright guy, certainly smarter than the rest.
Which is apparently how this had to end.
Doh!
