by Colin Barr on Fortune.com
"Gross, who manages the world's biggest bond fund and has spent recent months jawboning about the dangers of U.S. debt, has placed a $7 billion bet against Treasury bonds, according to the latest statistics released by his Pimco Total Return fund.
Gross made a splash last month by selling all the big bond fund's Treasury holdings and calling the federal budget a Greek tragedy in the making. Now he has gone one better, leaving the $236 billion fund with a short position in U.S government debt for the first time since February 2009 – and putting a third of the fund's assets in cash....
His fund is holding a staggering $73 billion of cash, in an apparent bet that the market recovery is on borrowed time...
Gross hasn't been optimistic that our political class will avert a crisis. His Greek tragedy commentary reasons that unfunded U.S. entitlement spending amounts to five times gross domestic product – a bigger debt burden than the one in bailed-out Greece...
Treasury securities aren't the only bonds Gross is betting against. Gross cut the Total Return Fund's holdings of mortgage securities to 28% of assets from 34%...
All the same, it is clear that it wouldn't take much of a dip in Treasury prices to bring Pimco back to the lot to start kicking the tires again. In spite of his posturing about bond market turkey shoots and the like, Gross told Bloomberg last month he believes U.S. economic growth dictates that the 10-year Treasury should trade "with a 4% type of yield."
http://finance.fortune.cnn.com/2011/04/10/pimcos-gross-betting-against-u-s-debt/
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