This is what I love about markets: Bill Gross tells @CNBCClosingBell @PIMCO is buying what @Fidelity is selling. Big boys placing bets.

— Richard Steinberg (@SGSelect) October 9, 2013

On the heels of news that Fidelity has cut out its exposure to short-term Treasury bills due around the time the U.S. could breach its debt ceiling, Pimco’s bond guru Bill Gross told CNBC this:

Were doing exactly the opposite actually… probably buying what Fidelity is selling, Gross, manager of the worlds largest bond fund, said in an interview after the market closed on Wednesday.

However, Gross says both companies are probably doing the right thing:

I appreciate the problem that they have with their money market funds… If, for instance, there’s a technical default of a day or even a couple of hours, then a money-market fund possibly has to mark down that debt to zero, and it breaks the buck. So… a Fidelity money-market fund might want to avoid that situation. Pimco doesn’t have that problem.

Our asset values go up and down every day, and breaking the buck hopefully on the upside as opposed to the downside is really our situation. So when we see a Treasury bill of a 30-day nature or a 15-day nature at a yield of 35 or 40 basis points instead of 3 basis points, which is where it was a few days ago, then we become a buyer certainly not a seller.”

Breaking the buck  occurs when the net asset value of a money-market fund drops below $1, and can happen when a money-market funds investment income doesnt cover operating expenses or investment losses.

Treasury bills are an integral part of money-market funds, and the yield on 1-month Treasury bills /quotes/zigman/4868265/delayed 1_MONTH has been spiking higher on mounting fears that lawmakers will not be able to reach a deal on raising the nations debt ceiling by the deadline of October 17.

Gross told CNBC that chances are 1 in a million that the U.S. will default on its debt, though that doesn’t mean markets aren’t going to fret about it. Stock futures were pointing to a strong open for Wall Street on Thursday, amid some glimmers of hope linked to a meeting between President Obama and a core group of Republicans  later in the day.

Investors pulled $5.4 billion out of Pimco’s flagship Total Return Fund in September, making for the fifth-straight month of outflows for the fund. Bond funds like these have been suffering as yields have risen on expectations the Fed will be shifting its monetary policy. Some are now saying that Janet Yellen’s likely replacement of Ben Bernanke as chair of the Fed means the central banks easy-money policy will stay in place.

Gross told CNBC that Yellens nomination means the Fed probably won’t end its quantitative-easing policy within the next year, and that outside of the “money-market problem, we think it’s no problem whatsoever.”

Barbara Kollmeyer

Follow this reporter @bkollmeyer

Follow The Tell blog @thetellblog