Bill Gross – I’m Not Crazy and Today’s Other Top Stories

In his first interview since moving to Janus Capital Group Inc, Bill Gross the former bond king called press treatment of his highly public soap opera “harsh” and defended his actions, saying he is “not crazy.”

Gross explained that his flowery and expressive blog posts, which became the butt of many jokes, were just the result of him trying to bring a little life to the otherwise dull bond market.

“Bond people are boring sometimes” Gross said “I think the vast majority of the public understands exactly who I am.” When asked about his much publicised move to Janus Gross told CNBC he decided to start over, rather than enjoy retirement, because “it’s a competition… like basketball,” and it’s boring playing against yourself.

Gross appears grateful he is being given the chance to rebuild his reputation after a torrid final year at Pimco “Most people don’t get a chance to start over at 70 years old” he said. The real question is, can Gross prove himself in a vastly different bond market to the in which he built that reputation.

If Gross can master bond market returns in strongly trending markets with both rising and falling bond prices, then he has accomplished something truly royal. And maybe he will be able to reclaim his bond king crown.


Todays Other Top Stories

Learn Bonds

Learn Bonds: – Russian economic trouble may be reaching a crescendo. – Russia is in corner right now (and not just because of sanctions). Investing in a non-diverse economy which is centrally-planned and manipulated can have significant risks. Such economies are like the little girl with the curl. When they are good they are very, very good, but when they are bad they are horrid.


Municipal Bonds

Bernardi Securities: – Diminished or impaired – A historical perspective of Illinois pension legislation and funding. – In part two of our Illinois Public Pension Compendium we take a closer look at the State’s pension funding history over nearly a century.

Bloomberg: – Munis approach cheapest level of 2014 relative to Treasury debt. – Prices in the $3.6 trillion municipal bond market are close to the cheapest relative to Treasuries this year as investors snap up U.S. government debt as a haven from financial turmoil.


Treasury Bonds

Reuters: – Bond investor Gross of Janus Capital says TIPS look ‘great’. – Bill Gross, the closely-watched bond investor, said Monday that Treasury inflation-protected securities looked “great” and that high-yield corporate bonds were not a great bet at the moment.

WSJ: – Benchmark U.S. government bond yield falls to near 2%. – Investors flocked to ultrasafe U.S. government bonds Tuesday, pushing down the yield on the benchmark 10-year note to near 2%, due to fresh signs of faltering global growth and market turmoil in Russia.


High Yield Bonds

Benzinga: – Opportunity In Junk Bond ETFs. – In the current market environment, anyone who has avoided exposure to the havoc that is the energy sector is certainly breathing a sigh of relief. Investors in the high-yield bond market that chose “fallen angels” as opposed the broader market are also feeling relieved. Fallen angels corporate bonds are bonds that were investment grade at one point, but have since fallen to below investment grade.

CNBC: – Energy drives junk bond market. – Amid oil’s selloff, Greg Peters, Prudential senior investment officer, is trimming high-yield energy exposure and finds opportunities elsewhere.

Time Money: – Junk bond selloff is a warning for retirees who reached for yield. – Risky assets have paid off well the past few years. But tremors in the junk bond market signal time for a gut check.

Bloomberg: – Junk market splits U.S. and Europe as Fed-ECB divide spurs trade. – Exuberance for risky debt is moving toward Europe, and away from the U.S. Junk bonds in the U.S. now offer investors the most extra yield relative to European ones on record, according to Bank of America Merrill Lynch index data.

Yahoo Finance: – Three liquidity risks in high yield bonds. – This selloff in energy HY bonds is rational because the ultimate bottoming in the price of oil is far from being determined.  That bottoming process may take months or even years.  As a result, unless a US HY bond issuer has a special or compelling story to mitigate the price of oil (e.g., completely hedged oil sales and costs or massive new wildcat finds) the selloff in oil and gas HY bonds is warranted.

Bloomberg: – Junk-bond firm turmoil shows people trump market-beating profit. – Market-beating returns aren’t always enough to keep investors, as Principal Financial Group Inc. has found.

Income Investing: – One-third of energy junk bonds now distressed as avg yield soars above 10%. – The broad-based rout caused by falling oil prices has brought a new milestone to the high-yield bond market, where the average yield on bonds in the energy sector has risen above 10% for the first time in over two years.

Focus on Funds: – Active junk ETF badly lags as crude sinks high-yield. – The market’s largest high-yield bond exchange-traded funds are falling to fresh two-year lows even as stocks rebound on Tuesday.


Investment Strategy

AllianceBernstein: – Bond investors should watch out for the flavor of the month. – Rising rates and inflation aren’t the biggest risks high-yield bond investors face today. We think the larger concerns are concentration and crowding stemming from low liquidity.

Business Insider: – Bill Gross calls an investment ‘great’ less than a week after Jeff Gundlach says it’s for ‘losers’. – Bill Gross likes TIPS. Jeff Gundlach thinks TIPS are for losers. In an interview with CNBC on Monday, Janus Capital’s Bill Gross said that TIPS, or Treasury Inflation-Protected Securities, are an investment that looks particularly attractive right now.

Money Beat: – Wealth Adviser: The challenge of investing in bonds. For wealth managers, crafting a strategy for bond investing has been, and is likely to remain, a real challenge. “They’re trying to make some strategic decisions here in an environment that’s fluid and in some ways unprecedented,” says Joseph Davis, global chief economist at the Vanguard Group Inc.


Bond Market

WSJ: – Foreign investors pile into bonds. – Foreign investors are snapping up Treasury bonds at the fastest clip in two years, propelling yields to fresh lows even as the U.S. economy gains steam.

Financial News: – Bah humbug – Moody’s Xmas gift to bond markets brings little cheer. – Moody’s Christmas message has brought comfort, but little joy, to the bond markets. Poor liquidity will bring pain to parts of the fixed income market in the year ahead, according to the latest survey from the ratings agency.

FT: – Brokers back new boost to bond liquidity. – Former Salomon Bros trader Ronnie Mateo is starting a new electronic trading platform that he hopes will bring together “sellside” bankers and “buyside” investors to solve what is perceived to be a growing problem of illiquidity in the $7.5tn US corporate bond market.

Bloomberg: – A low-yield bond world everyone loved to hate is ending in tears. – Remember when everyone in the bond market bemoaned living in a low-volatility, low-yield world? Those days are ending. Prices are swinging more than they have on average during the past few years and there’s yield to be had if you have the stomach for risk. Junk bonds and emerging-market debt have been tumbling on concern that plummeting oil prices will impede the ability of borrowers to repay their debt. Yet many don’t seem much happier for it.


Bond Funds

Reuters: – Jeffrey Gundlach, on his year as new ‘king of bonds’. – Excerpts from an hour-long interview – with Jeff Gundlach — about Gundlach’s investment calls (old and news ones),his competitors, the future of fixed income and his firm’s fifth year anniversary which was celebrated on Sunday.

Money Beat: – Bill Gross says Bill Gross isn’t even a little crazy. – Remember those outbursts, cool shades and colorful investor letters? Bill Gross was just trying to put the “fun” back in “bond fund.”

ETF Trends: – This year’s best bond ETFs can do it again in 2015. – With inflation expectations muted heading into 2015, this years best bond ETFs could be in for another strong year.

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