Thursday, August 21, 2008

Bill Gross Frustrated the Same Day Russia Stormed Georgia: Coincidence?

This is what Pimco's Bill Gross said: *DJ Gross: Agency Spread Widening Doesn't Make Sense-Bloomberg TV (MORE TO FOLLOW) Dow Jones Newswires August 06, 2008 14:42 ET (18:42 GMT) Copyright (c) 2008 Dow Jones & Company, Inc.- - 02 42 PM EDT 08-06-08 Perhaps Russian investments in the U.S. have more influence in our markets than CNBC talking heads are reporting? POTC thinks so. Just consider the staggering amount of oil profits funneled through Russian hands in the last year with crude breaking through $100/barrel, and realize some of it bought U.S. agency paper, especially FRE and FNM. On August 6th, when Bill Gross said "agency spread widening doesn't make sense", it happened to be the day... ------------- If you would like to receive this and future posts and market analysis, please send an e-mail to Psychologyofthecall@gmail.com and make sure that your e-mail client will not consider messages from that address as spam.

4 comments:

Anonymous said...

I'm slow... anyone care to elaborate on this for me. What does this mean for FRE and FNM?

The Call Team said...

"Overseas central banks dumped nearly $11 billion of agency-related securities during the past month.
Russia, for one, is not planning to rapidly raise or cut exposure to debt issued by Fannie Mae and Freddie Mac, Russia's deputy finance minister said on Wednesday."
(Additional reporting by Patrick Rucker and David Lawder in Washington; Jonathan Stempel, Ellis Mnyandu, Jennifer Ablan and Anastasija Johnson in New York; Toni Vorobyova in Moscow;)

Look at the chart linked below. Look at what happens after Aug. 6th (remember the lag in market response to major events).

http://finance.yahoo.com/q/ta?s=FRE&t=3m&l=on&z=l&q=c&p=&a=&c

Anonymous said...

Some feel Russia, with their invasion of Georgia, would like to see turmoil in U.S. markets, as they know the U.S. military is spread thin. Financial mayhem works well in turning attention, I liked the piece.

Avi

Anonymous said...

I think FRE and FNM cannot go under, agree. I will buy in bits and pieces, the only way I know how to make money lately!
Russia could well have sold a ton, I did look at the chart since August 6th, decent insights!
Joe M.