PIMCO's Bill Gross says Bush should bail out homeowners, markets.

I used to think Gross and Steven Roach at Morgan Stanley were different than most talking heads. I still think Roach may be. But I'm not sure about Gross any more.

Gross sounded like a survivalist, run-to-the-hills permabear earlier in the year, moving stocks down with his comments. Now, with a mere 10% correction, he thinks there are all sorts of good values and the worst is over? And now this bail out talk?

If you're going to be a permabear or permabull, at least be consistent--don't change opinions after a rally or pullback that's well within historical norms.

Another talking head, just smarter than most...

 

I get it. Declare for regime change in California. It’s the epicenter of the mortgage meltdown, after all, so send in the troops to make sure those insurgent mortgagors pay the banks. Invade it to keep those CDOs up and remove the risks to our economic security. Only problem: No obvious cover story for the planeloads of cash. Also, Anhold won’t fit in a spider hole.

 

One of the traits of a successfull trader is to switch your position as soon as the facts change. Well, that would explain why he's a very successful trader, now wouldn't it.

 

Not me. I'm gaming out the legislative legal response and dreaming up evil stuff that crushes the Wall Streeters.

The real problem eating the markets is nobody knows who the holders of the ABS are. Plus everyone is lying their ass off to make the other bank think they aren't a bag holder. What if we had a law or reg that you have to make immediate disclosure? These things are big - not like a futs contract. A single one is 500M of loans I recall.

 

Didn't Gross get all beared up on bonds when the 10-yr went to 5.30%?

If so, a depressed RE market from foreclosures would make bonds rally and rates fall. That would put a big dent in his book.

So of course he wants the Gummint to bail everyone out.

BTW, wouldn't it be the REST OF US citizens who ultimately paid the bill for the bail-out?

Sounds like Gross also needs kickin' in the balls just like Congress, the Fed, Bush, on and on...

 

you do this & i guarantee whats next - a rebate for renters "to be fair." you remember when they gave those tax rebate checks for a whopping $300? remember the uproar to give $300 to people who didnt even have a tax liability. if you think chrylser was wrong say so... dont say they should continue b/c they did chrysler. this is a very, very bad trend. people lied on their apps, that used to be loan fraud, now its a fricking crying towel. i mean get real - BTW, a goodly portion of the weakest borrowers in Cali probably arent even citizens - so whats next? send checks directly to Mexico?

stop the bullshit.

 

I understand, and you did a good job. I was jesting in part about the right-wingers' knack and predilection for profit out of ruin. Nothing says calamity quite like a no bid contract. We’ll know they're getting nervous about a mortgage meltdown if Haliburton creates a “Mortgage Emergency Servicing Unit.”

Let’s hope for our fellow ETers that the right-wingers pick their trades better than their politics. They’re both markets you know.

 

I understand, and you did a good job. I was jesting in part about the right-wingers' knack and predilection for profit out of ruin. Nothing says calamity quite like a no bid contract. We’ll know they're getting worked up about a mortgage meltdown if Halliburton creates a “Mortgage Emergency Servicing Unit.”

Let’s hope for our fellow ETers that the right-wingers pick their trades better than their politics. They’re both markets you know.

 

i think the guys w/o exposure are enjoying seeing the others sweat bullets. i think Bear Stearns was the only one not to step up on LTCM. coincidently, they were the first to get squeezed and no one came running to their rescue (kharma + payback). thats seems like a lifetime ago, like 1-2 months at the most?

there will not be a law for full disclosure until this shit gets unwound. these guys are valuing the toxic paper by "marking to model"; what would happen if they were forced to mark to market - the greatest irony is the homemoaners marked their income and NAV to MODEL in the first place. the greedy hedgies levered 9:1 on paper from borrowers levered 19:1 (assuming 95% LTV)... tell me how you legislate stupidity away? leverage is getting unwound - off course asset prices will decline - cant think of any market where it wouldnt?

 

The problem is that Gross is a macro-level bonds guy, not a day or swing trader. Two different animals. Someone with his time horizons doesn't usually switch over 10% rallies or pullbacks. That's for the herd (and short-term traders who can stay a step or two ahead of the herd).