Beware of the 'Bond Bears:' Nothing But Gray Skies
by AL MARTIN (AL MARTIN RAW)
(10-3-12) "Bond bears" are essentially those who consistently pooh-pooh US bonds, particularly long-dated Treasuries -- from the 10 to the 30 year "paper." This is a self-serving shill.
Everyone who has an interest in the financial industry -- from the brokerage houses to the financial media -- has a vested interest in pooh-poohing the bonds. Why? Because there isn't any money in bonds from a brokerage firm's perspective.
The real money, from a brokerage's standpoint -- the commission revenue comes from equities and commodities -- not from bonds.
The bond fund managers, like PIMCO's Bill Gross, become so-called "bond bears" when they start shorting the bonds. Why? Because everybody "talks their book," when you appear on financial media. This means you "talk up" or promote your own positions. Just as retail house touts are always long the equities.
It should be noted that only 14% of all equity funds can even sell short.
In other words, if you're going to sell to Joe Six Pack, you say -- you shouldn't be shorting because your liabilities are unlimited and it's unpatriotic to short stocks.
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