Bill Gross wasn't the only one betting against Treasuries this year, but he was by far the most watched. The Bond King created headlines all year predicting a collapse that never came. "PIMCO's Gross Asks: ' Who Will Buy Treasuries When the Fed Doesn't?" read a March 9 headline on Atlantic.com; "Pimco's Gross bets against Treasuries" read an April headline in the Los Angeles Times. "PIMCO's Gross raises bet against US gov't debt" Reuters said in May.
As manager of Pimco's $240-billion Total Return Fund, the world's largest mutual fund, Gross made a grievous error in betting that already inflated Treasuries couldn't rise further amid poor economic news. Instead, Treasury yields fell further (and prices rose) as investors flooded into the market's safest securities. Gross was sounding contrite by year's end. In October he wrote a special note to investors: "I'm just having a bad year," it read.
NEXT: Gold crash
