PIMpCO Attempts Another Taxpayer ****

Here we go again….

“Having grown accustomed to a housing market aided and abetted by Uncle Sam, the habit cannot be broken by going cold turkey into the camp of private lending,” Gross wrote. “Taxpayers would be protected through tight regulation, adequate down payments, and an insurance fund bolstered by a 50- 75 basis point fee attached to each and every mortgage.”

Uh huh.  And why does Bill Gross think this?  He doesn’t have any sort of personal interest in this in the form of concentration of risk that he bought in front of his recommendation, does he?

Oh wait – he does!

Gross increased the $239.3 billion Total Return Fund’s holdings of mortgage debt to 18 percent in July from 16 percent the month before, the most since September, according to Pimco’s website.

Yep.  Now admittedly, 16 -> 18% isn’t a very big increase.  But why would you own any of these instruments if you think they’re over-priced – and if you think yields would move up 300-400 basis points, or damn near a double, you clearly believe that.

Well the answer to that should be obvious: Bill once again thinks he can strong-arm Treasury and/or Congress into paying him – again – with your money.

Gross wrote the “cost would be enormous in terms of yields,” which could rise 300 basis points to 400 basis points, “crippling any hopes of a housing-led revival to the economy.”

Guess what?  There won’t be any housing-led recovery anyway.  How do I know?  Because the asset class that is in a bubble and pops is never the one that leads the economy back out when things finally turn around. 

The reason for that should be obvious – people aren’t dumb enough to get burned in the same piece of idiocy twice.

(They are, however, stupid enough to get burned with an entirely-different scam, which we see time and time again, all formed from the same fraudulent cloth and sold as “new and improved“!)

Congress and The American People need to tell Bill Gross to go whiz up a rope.

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