Thursday, September 4, 2008

Gross: But not here

PIMCO - Investment Outlook Bill Gross Sept 2008 Bull Market

Investment Outlook
Bill Gross
September 2008

There's a Bull Market Somewhere?

A Depression-era bank robber
named Willie Sutton once said that the reason he robbed banks was
because “that’s where the money is.” Illegal for sure, but close to an
800 SAT score for logic if you were in the business of stealing other
people’s money. And now, while some will compare current government
bailouts to Slick Willie, citing moral hazard, near criminal regulatory
neglect, and further bailouts for Wall Street and the rich, common
sense can lead to no other conclusion: if we are to prevent a
continuing asset and debt liquidation of near historic proportions, we
will require policies that open up the balance sheet of the U.S.
Treasury – not only to Freddie and Fannie but to Mom and Pop on Main
Street U.S.A., via subsidized home loans issued by the FHA and other
government institutions. A 21st century housing-related version of the
RTC such as advocated by Larry Summers amongst others could be another
example of the government wallet or balance sheet that is required
during rare periods when the private sector is unable or unwilling to
step forward.
Mr. Gross is a smart man and a legendary trader of interest rates I hope he finds something to cheer him up soon.

No comments: