Friday, September 5, 2008

Bill Gross

Bill Gross, CIO, PIMCO
I guess it goes like this:
- Bet heavily on mortgage-backed securities
- When things get bad, demand that the government protect your bad bet

Calculated Risk:
2007-06-26: BONG HiTS 4 BILL GROSS!

2008-04-04: Bill Gross on a Bailout (CNBC video)

2008-04-10: Ticker Guy 'Savaging' Bill Gross (YouTube Video)

2008-04-10: Pimco's Gross Holds Most Mortgage Debt Since 2000
April 10 (Bloomberg) -- Pacific Investment Management Co.'s Bill Gross lifted holdings of mortgage debt in the world's largest bond fund to the highest since 2000, while putting on the biggest bet against government debt since at least the same year.

The $125.1 billion
Pimco Total Return Fund had 59 percent of assets in mortgage debt in March, up from 52 percent the prior month and 23 percent in March 2007, according to data on the Newport Beach, California-based firm's Web site. The fund's cash position dropped to 32 percent, the lowest since July 2006, from 34 percent in February.

2008-09-04: Bond Fund Manager Demands Bailout to Support His Profits
Bond manager Bill Gross wants to spread the bailout wealth. Gross says in a commentary posted on the Pimco Web site Thursday that the government must “open up the balance sheet of the U.S. Treasury” to support Fannie Mae (FNM), Freddie Mac (FRE) and, in a new twist, “Mom and Pop on Main Street U.S.A.” as well.

Gross has previously said he believes the Treasury will
have to assist Fannie and Freddie in any efforts to raise new capital. His Pimco Total Return bond fund has major positions in mortgage-backed bonds issued by the government-sponsored enterprises, so it’s no surprise that he sees it that way. But now he’s calling on Treasury Secretary Henry Paulson to use federal funds to buy more housing-related assets, in the name of preventing asset-price deflation from spiraling out of control.

Gross writes that the government should be more aggressively issuing subsidized home loans and creating funds to buy distressed properties, to help inject cash into U.S. households and slow the plunge in home prices. He writes that federal assistance is required because the deleveraging sweeping the financial sector has moved from asset liquidiation to debt liquidation - a process, he writes, that “can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami.”

Bill,... FU** You!!
2008-09-07: Pimco’s Gross sees Fannie/Freddie rescue limiting housing losses
Bond guru Bill Gross at Pimco, who’s Newport Beach trading team has come as close as anybody in calling the housing debacle, says that the government rescue of Fannie Mae and Freddie Mac should shave housing losses.

Gross, whose company manages $800 billion in fixed-income assets, says it’s too to early to call a bottom to a horrific housing debacle that’s shaved 15 percent or more off home values nationwide — losses that led to Fannie and Freddie’s downfall.

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