Episode summary
Pimco CEO Manny Roman on Japanese Bonds and the Sell America Trade | Odd Lots
Odd Lots
· · 51 min · Hosts: Tracy Alloway, Joe Weisenthal · Guests: Manny Roman
Summary
Manny Roman said the recent move in bonds and stocks was real but not dramatic enough to be an “earthquake,” arguing that the U.S. selloff reflected a mix of Japan spillover and geopolitical risk rather than a decisive regime change. He emphasized that the dollar barely moved, which supports his view that de-dollarization is still a secular theme rather than a panic trade, and that long-end rates are moving within bounded ranges rather than breaking out.
Roman was notably more constructive on Japan. He said the country is seeing the first meaningful inflation in years, a tighter labor market, more shareholder activism, and a stronger equity backdrop, even as demographics remain a long-term problem. On Japanese debt, he argued that sustainability looks different when viewed against household savings and future taxing power rather than debt-to-GDP alone.
He also said Pimco is finding attractive opportunities in mortgages, structured products, and data center financing tied to AI, while being selective on other areas like gold and crypto, which he said he does not “understand.” On geopolitics, he stressed humility: Pimco tries to manage around macro and policy shifts, but not to build positions on politics alone.
Key takeaways
- Roman said the recent U.S. bond-and-stock move was a mix of Japan effects and geopolitics, but not yet a market panic.
- He argued the dollar’s small move suggests the sell-America theme is still more of a secular diversification trend than an acute shock.
- Roman sees Japan as structurally more inflationary and more investable now, with tighter labor markets, activism, and a stronger equity story.
- He said Pimco likes mortgages and structured credit because long rates are high and the market offers attractive entry points.
- Roman said AI-linked data center financing is creating large, scalable credit opportunities, especially where issuers have strong market caps or cash flow.
- He said wealth taxes can trigger capital flight, citing France as an example, and argued state taxing power matters more than headline debt ratios.
Notable quotes
“When you look at how much the market reacted, they didn't react that much”
“the dollar remains the reserve currency of the world”
“Japan is a very, specific situation. I just came back from Japan last week”
“We do like volatility because we see volatility comes out of far right”
“I am honestly, there's things where I just give up. And I said, really? And I said, I don't understand. That's one of them”
How the episode opens
When you look at how much the market reacted, they didn't react that much. I mean, bond yields went up 5 or 6 bips yesterday on the ten year. And the stock market is is down 2%.
I mean, it's it's it's, it's not exactly right. An earthquake. And so I do think that, the market is very rational and essentially discount a lot of the nose and look through it.
The day where, the market is really concerned about something. The second point, I think, is the currency barely move. I mean, I was looking at euro in sterling this morning.
I mean, we, we we flat as a pancake. And so the move away from the dollar. Yes.
As, as a secular trend, the fact that you want to diversify away from the dollar mix makes sense. And you want to have other currency on the dollar, but the dollar remains the reserve currency of the world. Hello, and welcome to another episode of the Odd Lots podcast.
I'm Tracy Alloway and I'm Joe Weisenthal. Joe. It's back.
What's back? It's back. What's back?
They're back. No, it was South America trade. Oh, the sell America.
Yeah. Various flavors of what the comeback could have been, but all seem to be converging at one. Yeah, I should have been more clear.
So we are recording this on January 21st, and this comes a day after we saw a pretty big sell off in the market. What was interesting about that sell off is it was a trifecta of U.S. assets.
So you have the S&P 500 down, bond yields up and the dollar index down. Yeah as well. And so obviously people are talking about is this the start or the restart of the sell America trade.
All of this is coming in the context of Trump's threats against Greenland.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- sell america trade
- japanese bonds
- u.s. treasury yields
- dollar weakness
- pimco ai and investment philosophy
Companies and tickers mentioned
- PIMCO
Watch the episode
Watch “Pimco CEO Manny Roman on Japanese Bonds and the Sell America Trade | Odd Lots” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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