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from Over-Gaffenated:

MORNING BID – Uneasy lies the head that wears the crown

One day before the key jobs report that will likely paint yet another muddled picture of the current economic state, it's the bond market that's gotten more dynamic and interesting than the other asset classes out there. Treasuries are seeing a safe-haven bid on the back of Ebola and protests in Hong Kong, along with a comparison to the still-falling yields in the euro zone. High yield securities are seeing their spreads widen out in a way that's commensurate with previous pullbacks that have later manifested into notable corrections in the stock market (and given the Russell 2000 hit that 10 percent threshold on Wednesday, the answer is yes, this is something to keep watching), and so that's yet another bit to watch for as well.

Some of it can be explained by the sudden departure of a certain fixed income manager in California from the firm he founded a million or so years ago. And while there's a heavy temptation to emulate Bill Gross here by somehow speaking this column out loud as if my rabbit had penned it, we'll be content to note that the Treasury market's selling pretty well snapped back in a couple of days.

But one obstacle is the other, more risky areas of the market that had become so much a part of PIMCO's $220 billion portfolio - along with other funds that the firm manages now and that new execs are desperately trying to promote, saying they make up the lion's share of the firm's assets (nice try, but no cigar on downplaying your founder's contributions, folks.) High yield spreads have notably widened out - the Merrill HY index is now about 105-110 basis points wider than where it was in June - so the concerns people have about risks are being portrayed well here.

We'll be looking a bit more closely at what we can expect out of the bond market going forward now that the Bond King is dead (long live the bond king, be it Jeff Gundlach or other claimants to the throne), and whether the pronounced selling in certain areas will become more dramatic in coming days, weeks, and months. Pimco had a lot of assets, and a lot of securities many investors aren't interested in, and in a sense they were a quasi-guarantor of a lot of supply out there. Keeping a lid on all that at a time when the markets have become addicted to credit issuance is going to be interesting.

from Unstructured Finance:

‘Bond King’ Gross speaks to 700 at Pimco client event in Big Apple

By Jennifer Ablan

Bill Gross did something last week he rarely does -- venture from his Newport Beach, Calif. home to meet with investors twice. 

First in Chicago at the Morningstar Investment Conference where he made waves for donning sunglasses and joking he'd become "a 70-year-old version of Justin Bieber," and then, the next day at a less-publicized event for 700 clients in New York City. 

from Breakingviews:

When denials can be as instructive as the truth

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Denials can be as instructive as truths – and if not, they can be at least more entertaining. On Thursday a fellow fingered as the father of bitcoin rejected a report he founded the crypto-currency. In the shadowy world of virtual money, such confusion may not be so surprising – nor matter. Not so with the bizarre defiance of $2 trillion “Bond King” Bill Gross.

from Unstructured Finance:

Money manager titans who can’t wait until 2014

The year can't end fast enough for some of the world's biggest investors.

Bill Gross, who many like to consider the King of Bonds, lost one of his prized titles last week when his PIMCO Total Return Fund was stripped of its status as the world's largest mutual fund because of lagging performance and a swamp of investor redemptions.

The PIMCO Total Return Fund -- somewhat of a benchmark for many bond fund managers -- had outflows of $4.4 billion in October, marking the fund's sixth straight month of investor withdrawals, and lowered its assets to $248 billion, according to Morningstar.

from The Edgy Optimist:

Bonds are not safe

The old stock market cliché “sell in May, and go away” had so far proved untrue this year. Instead, it is the bond market -- so often perceived as steady, low risk and dependable -- that has bitten investors. In fact, June was one of the worst months for bonds in many years. The declines were steep enough to serve as an acute reminder that nothing, and I do mean nothing, in the financial world is without risk.

Stocks have been rising with volatility for more than four years. Yet money has poured into bonds. That reversed dramatically in June, with investors pulling $28 billion from bond funds, the most since monthly records began in 2007. Pimco, one of the largest bond managers in the world, saw its normally staid and stable Total Return Fund drop by 2.6 percent, and investors yanked $14 billion from Pimco alone.

from Unstructured Finance:

The sultans of swing

Although most investors have been pleased with the steadily rising U.S stock market over the past six months, funds that profit when markets are convulsing are licking their wounds.

With market stress at multi-year lows, volatility hedge funds returned just 1.16 percent in the first quarter, compared with 3.7 percent for the broader hedge fund group.

from Unstructured Finance:

Obama hearts El-Erian

By Sam Forgione and Matthew Goldstein

OK, so it's not a big gig like being nominated to head the Treasury Dept. But President Obama's decision to tap PIMCO's Mohamed El-Erian to head the President's Global Development Council is no insignificant matter.

As the co-chief investment officer of the giant bond shop founded by Bill Gross, El-Erian is seen as the eventual heir apparent to run the Newport Beach, Calif firm. And El-Erian increasingly has become one of PIMCO's most visible faces---maybe even more than Gross himself these days--when it comes to talking about what ails the U.S. and global economies.

from Unstructured Finance:

Gundlach doesn’t whine over his stolen wine

By Jennifer Ablan and Matthew Goldstein

Who said bonds are boring? In recent days, Jeffrey Gundlach, the new king of the fixed-income world, has been dominating headlines with his lengthy CNBC interview on everything from counterparty risk to the market’s love affair with Apple stock to talk in the blogosphere about Gundlach’s pricey Santa Monica, Calif. residence being burglarized of more than $10 million in assets.

Against this backdrop, Gundlach’s firm, DoubleLine, hit a huge milestone this week as well, hitting $45 billion in assets under management.

from Unstructured Finance:

UF Weekend reads – The PIMCO edition

Jenn Ablan likes to tell me that people are always writing about PIMCO and Bill Gross, the long reigning "king of bonds." And when you think of it there's a lot of truth to that assertion.

Gross' mammoth $263 billion Total Return Fund gets endless coverage because--by its very size--it really is the bond market. It's one reason why so much ink is spilled whenever the Total Return Fund has a month where investors pull more money out of the fund than put in.  And it's why there's so much analysis of what Gross & Co. are doing with Treasuries and mortgage-backed securities--and whether they are using lots of leverage and derivatives to boost exposures.

from Unstructured Finance:

UF Weekend Reads

The latest offerings by our Sam Forgione include a little Bridgewater, PIMCO and Jamie.

From National Journal:

Jim Tankersley airs Nick Hanauer's championing of the middle class after Hanauer's TED Talk was pulled.

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