The book has all kinds of details such as the information discussed during their 2003 secular forum; the logic behind the way different types of news are processed; the people at PIMCO; the proportion of short treasuries, long treasuries, high-quality corporates, junk bunds, developed world debt, emerging markets debt and TIPS in a portfolio when rates are declining, raising or stable. The book also talk about the gamblers, speculators and financiers who have inspired Gross. Most of these details have no bearing on us derivate traders until one of them becomes particularly pertinent such as the news mentioned yesterday and today by Bloomberg that Lehman is adding more long treasuries to it's bond index. After reading the book, it is easier to understand why one should expect a lot of bond managers to buy long treasuries right now. The most value I found is in the examples of how Gross was responding to changes in Fed policies and economic developments abroad, and how data and analyses are separated between secular and cyclical forecasts. Sometimes I get all tangled up between bullish and bearish signals, and being able at times (not all the time) to separate my signals between long-term and short-term movements helps me manage conflicting information.
Tough to call an end to the flattener, Smith Barney has sold 17,000 x 10,000 in the NOB (selling tens to buy thirties). Massive steepening this morning across the curve, but big guys decide to do flatteners into it, very interesting.
A bank or hedge fund was actually unwinding cash flatteners in 10/30's, on the order of 4 billion by 2 billion, so the futures play was obviously a hedge. Starting to stabilize in 30's as that has run its course.
Gold is going up (and oil is about to follow); the stock market has been going higher on strong economic data; so we might have some inflationary concerns building up.
Been watching the CRB index. It's close to a breakdown point. It will need oil/gold rising to avoid that...
Make sure you keep an eye on when comments from the Fed are scheduled to be issued (none this week at my knowledge) because if 30 yrs or 10 yrs drop 2 ticks this week and then they say they're confident inflation is not a problem for the time being, bonds will bounce back and rally on a strong non-inflationary data, with overseas money flowing in -- providing that oil is not above $66 at that point of time.