Buying up FDIC backed bonds as quickly as possible along with the senior tiers of bank debt, might just be PIMCOs bottom call. Or looming disaster. Take your pick.
Mohamed El-Erian, co-chief of the powerful money manager Pacific Investment Management Co, on Wednesday said his firm has been buying bonds backed by the Federal Deposit Insurance Corp and senior debt of banks, at a time of near-zero yields on short-term U.S. Treasuries.
Speaking at the Reuters Investment Outlook Summit in New York, El-Erian said Pimco has been finding better return potential on securities that carry the same high credit ratings as ultra-safe government debt, but said it remains premature to buy high-yield debt or U.S. equities.
You will, of course, barely discern the sound of our snickering at phrases like "ultra-safe government debt."
Pimco buying FDIC-backed debt, senior bank debt [Reuters]