....."Managing the Bailout: He’d Do It for Nothing"
"Managing the Bailout: He’d Do It for Nothing," see http://www.nytimes.com/2008/09/25/business/economy/25pimco.html. Who else but Mr. Bonds, Bill Gross. Part of the article is below.
"NEWPORT BEACH, Calif. — One of the chief concerns about the Treasury Department’s $700 billion bailout plan is that the same Wall Street firms that helped create the crisis could make a killing cleaning it up.
William H. Gross, the manager of the country’s largest bond mutual fund, has a solution: he is offering to sort through the toxic assets — free.
“We have a large and brilliant staff that can analyze and has analyzed subprime mortgages that can help the Treasury out,” Mr. Gross, the co-chief investment officer for the Pacific Investment Management Company, said in an interview at the company’s headquarters here.
He added, “And I’d even be willing to say that if the Treasury wanted to use our help, it would come, you know, free and clear.”
Mr. Gross explained his offer as a philanthropic one. With Pimco’s $830 billion under management, “we make fees aplenty,” he said. That could be considered an understatement. Pimco is a behemoth in credit markets, and Mr. Gross talks about them with a confidence that reflects his ability to maneuver in them.
But maneuvering is becoming a lot harder these days. After breathing an initial sigh of relief when the Treasury plan was first announced, credit markets are again showing signs of stress.
Mr. Gross pointed it out on Tuesday morning, standing on Pimco’s trading floor as Henry M. Paulson Jr., the Treasury secretary, and Ben S. Bernanke, the Federal Reserve chairman, testified before a Senate committee.
“Today’s the worst day yet and nobody knows it,” he said. “Everybody is squirreling away cash. Even the big banks are refusing to lend money.”
Bid-ask spreads on bonds in almost every sector of the debt markets stretched to a full point or more. “It’s not a pretty situation today, much worse than last week,” Mr. Gross said.
“Those who just look at the stock market wouldn’t know it,” he added, because the Dow Jones industrial average was down only 126 points at the time. “But the credit markets are doing a pretty good job of freezing up.”
Despite his proposal to offer his talents, gratis, some investment managers say the government should be wary of giving authority for the auction of mortgage securities to anyone in the private sector, particularly someone with as dominant a position in the bond market as Mr. Gross.
Luis Maizel, a senior managing director of LM Capital Group in San Diego, said the government should instead turn to someone like a former official of the Federal Home Loan Bank Board, which is now defunct, or the Federal Reserve.
“They should start with somebody who doesn’t have a conflict,” Mr. Maizel said. “Bill Gross is a good friend of mine, but if you put this in Bill’s hands, Pimco is going to come out great and I don’t know that the government will.”
Mr. Gross says that all he wants in return for helping the Treasury Department is for Pimco “to be recognized for the way we’ve seen this crisis coming, and for the way we’ve talked about what’s required.”
For more than a year, Mr. Gross, whose investment expertise has earned him a net worth estimated at more than $1 billion, according to Forbes, has indeed played the role of the financial markets’ Cassandra. Beginning in July 2007, he warned that the subprime mortgage crisis would become far worse before it would improve.
Other sectors of the financial markets, he predicted, also could seize up if the Federal Reserve and the Treasury did not do something to help keep the markets liquid.
But Mr. Gross and Pimco also attracted criticism when it became clear that the Pimco Total Return fund earned more than $1.7 billion on the day the federal government bailed out Fannie Mae and Freddie Mac."
.......http://www.JoeFRocks.com/
NEM XAU HUI
"NEWPORT BEACH, Calif. — One of the chief concerns about the Treasury Department’s $700 billion bailout plan is that the same Wall Street firms that helped create the crisis could make a killing cleaning it up.
William H. Gross, the manager of the country’s largest bond mutual fund, has a solution: he is offering to sort through the toxic assets — free.
“We have a large and brilliant staff that can analyze and has analyzed subprime mortgages that can help the Treasury out,” Mr. Gross, the co-chief investment officer for the Pacific Investment Management Company, said in an interview at the company’s headquarters here.
He added, “And I’d even be willing to say that if the Treasury wanted to use our help, it would come, you know, free and clear.”
Mr. Gross explained his offer as a philanthropic one. With Pimco’s $830 billion under management, “we make fees aplenty,” he said. That could be considered an understatement. Pimco is a behemoth in credit markets, and Mr. Gross talks about them with a confidence that reflects his ability to maneuver in them.
But maneuvering is becoming a lot harder these days. After breathing an initial sigh of relief when the Treasury plan was first announced, credit markets are again showing signs of stress.
Mr. Gross pointed it out on Tuesday morning, standing on Pimco’s trading floor as Henry M. Paulson Jr., the Treasury secretary, and Ben S. Bernanke, the Federal Reserve chairman, testified before a Senate committee.
“Today’s the worst day yet and nobody knows it,” he said. “Everybody is squirreling away cash. Even the big banks are refusing to lend money.”
Bid-ask spreads on bonds in almost every sector of the debt markets stretched to a full point or more. “It’s not a pretty situation today, much worse than last week,” Mr. Gross said.
“Those who just look at the stock market wouldn’t know it,” he added, because the Dow Jones industrial average was down only 126 points at the time. “But the credit markets are doing a pretty good job of freezing up.”
Despite his proposal to offer his talents, gratis, some investment managers say the government should be wary of giving authority for the auction of mortgage securities to anyone in the private sector, particularly someone with as dominant a position in the bond market as Mr. Gross.
Luis Maizel, a senior managing director of LM Capital Group in San Diego, said the government should instead turn to someone like a former official of the Federal Home Loan Bank Board, which is now defunct, or the Federal Reserve.
“They should start with somebody who doesn’t have a conflict,” Mr. Maizel said. “Bill Gross is a good friend of mine, but if you put this in Bill’s hands, Pimco is going to come out great and I don’t know that the government will.”
Mr. Gross says that all he wants in return for helping the Treasury Department is for Pimco “to be recognized for the way we’ve seen this crisis coming, and for the way we’ve talked about what’s required.”
For more than a year, Mr. Gross, whose investment expertise has earned him a net worth estimated at more than $1 billion, according to Forbes, has indeed played the role of the financial markets’ Cassandra. Beginning in July 2007, he warned that the subprime mortgage crisis would become far worse before it would improve.
Other sectors of the financial markets, he predicted, also could seize up if the Federal Reserve and the Treasury did not do something to help keep the markets liquid.
But Mr. Gross and Pimco also attracted criticism when it became clear that the Pimco Total Return fund earned more than $1.7 billion on the day the federal government bailed out Fannie Mae and Freddie Mac."
.......http://www.JoeFRocks.com/
NEM XAU HUI
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