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Bill Gross Calls Fed "Most Brazen" Of All Ponzi Schemes, Says 30 Year Bond Market Is Ending, Compares US Economy To Black Hole

Tyler Durden's picture


A surprising amount of truth from Bill Gross this morning. Now if only Bill Gross would explain why he has been buying MBS on margin last month (in anticipation of the last move higher in the "Sammy" scheme no doubt) we will call it quits. Oddly enough, Bill Gross, who for the first time confirms everything Zero Hedge has been saying for almost two years now, is not accussed of hyperventilating... yet

Run Turkey, Run from PIMCO

say a country gets the politicians it deserves or perhaps it deserves
the politicians it gets. Whatever the order, America is next in line,
and as we go to the polls in a few short days it’s incumbent upon a
sleepy and befuddled electorate to at least ask ourselves, “What’s going
on here?” Democrat or Republican, Elephant or Donkey, nothing much ever
seems to change. Each party has shown it can add hundreds of billions
of dollars to the national debt with little to show for it or move our
military from one country to the next chasing phantoms instead of
focusing on more serious problems back home. This isn’t a choice between
chocolate and vanilla folks, it’s all rocky road: a few marshmallows to
get you excited before the election, but with a lot of nuts to ruin the

Each party’s campaign tactics remind me of airport terminals pre-9/11
when solicitors only yards apart would compete for the attention and
dollars of travelers. “Save the Whales,” one would demand, while the
other would pose as its evil twin – “Eat Whale Blubber,” the makeshift
sign would read. It didn’t matter which slogan grabbed you, the end of the day’s results always produced a pot of money for them
and the whales were neither saved nor eaten. American politics resemble
an airline terminal with a huckster’s bowl waiting to be filled every
two years.

And the paramount problem is not that we contribute so willingly or
even so cluelessly, but that there are only two bowls to choose from.
Thomas Friedman, the respected author of The World Is Flat, and a weekly New York Times
Op-Ed author, recently suggested “ripping open this two-party duopoly
and having it challenged by a serious third party” unencumbered by
special interest megabucks. “We basically have two bankrupt parties,
bankrupting the country,” was the explicit sentiment of his article, and
I couldn’t agree more – whales or no whales. Was it relevant in 2004
that John Kerry was or was not an admirable “swift boat” commander? Will
the absence of a mosque within several hundred yards of Ground Zero
solve our deficit crisis? Is Christine O’Donnell really a witch? Did Meg
Whitman employ an illegal maid? Who cares! We are being conned, folks;
Democrats and Republicans alike. What have you really heard from either
party that addresses America’s future instead of its prurient overnight
fascination with scandal? Shame on them and of course, shame on us.
We’re getting what we deserve. Vote NO in November – no to both parties.
Vote NO to a two-party system that trades promises for dollars and hope
for power, and leaves the American people high and dry.

There’s another important day next week and it rather coincidentally
occurs on Wednesday – the day after Election Day – when either the
Donkeys or the Elephants will be celebrating a return to power and the
continuation of partisan bickering no matter who is in charge. Wednesday
is the day when the Fed will announce a renewed commitment to
Quantitative Easing – a polite form disguise for “writing checks.” The
market will be interested in the amount (perhaps as much as an initial
$500 billion) as well as the targeted objective (perhaps a muddied
version of “2% inflation or bust!”). The announcement, however, has been
well telegraphed and the market’s reaction is likely to be subdued.
More important will be the answer to the long-term question of “will it
work?” and perhaps its associated twin “will it create a bond market

Whatever the conclusion, not only investors, but the American people
should recognize that Wednesday, even more than Tuesday, represents a
critical inflection point in determining our future prosperity. Of
course we’ve tried it before, most recently in the aftermath of the
Lehman crisis, during which the Fed wrote $1.5 trillion or so in
“checks” to purchase Agency mortgages and a smattering of Treasuries. It
might seem a tad dramatic then, to label QEII as “critical,” sort of
like those airport hucksters, I suppose, that sold whale blubber for a
living. But two years ago, there was the implicit assumption that the
U.S. and its associated G-7 economies needed just an espresso or perhaps
an Adderall or two to get back to normal. Normal just hasn’t happened
yet, and economic historians such as Kenneth Rogoff and Carmen Reinhart
have since alerted us that countries in the throes of delevering can
take many, not several, years to return to a steady state.

The Fed’s second round of QE, therefore, more closely resembles an
attempted hypodermic straight to the economy’s heart than its mood
elevator counterpart of 2009. If QEII cannot reflate capital markets, if
it can’t produce 2% inflation and an assumed reduction of unemployment
rates back towards historical levels, then it will be a long, painful
slog back to prosperity. Perhaps, as a vocal contingent suggests, our
paper-based foundation of wealth deserves to be buried, making a fresh
start from admittedly lower levels. The Fed, on Wednesday, however, will
decide that it is better to keep the patient on life support with an
adrenaline injection and a following morphine drip than to risk its
demise and ultimate rebirth in another form.

We at PIMCO join with Ben Bernanke in this diagnosis, but we will
tell you, as perhaps he cannot, that the outcome is by no means certain.
We are, as even some Fed Governors now publically admit, in a
“liquidity trap,” where interest rates or trillions in QEII asset
purchases may not stimulate borrowing or lending because consumer
demand is just not there. Escaping from a liquidity trap may be
impossible, much like light trapped in a black hole.
Just ask
Japan. Ben Bernanke, however, will try – it is, to be honest, all he can
do. He can’t raise or lower taxes, he can’t direct a fiscal thrust of
infrastructure spending, he can’t change our educational system, he
can’t force the Chinese to revalue their currency – it is all he can do,
and as he proceeds, the dual questions of “will it work” and “will it
create a bond market bubble” will be answered. We at PIMCO are not sure.

Still, while next Wednesday’s announcement will carry our qualified
endorsement, I must admit it may be similar to a Turkey looking forward
to a Thanksgiving Day celebration. Bondholders, while immediate
beneficiaries, will likely eventually be delivered on a platter to more
fortunate celebrants, be they financial asset classes more adaptable to
inflation such as stocks or commodities, or perhaps the average American
on Main Street who might benefit from a hoped-for rise in job growth or
simply a boost in nominal wages, however deceptive the illusion. Check
writing in the trillions is not a bondholder’s friend; it is in fact
inflationary, and, if truth be told, somewhat of a Ponzi scheme. Public
debt, actually, has always had a Ponzi-like characteristic
. Granted,
the U.S. has, at times, paid down its national debt, but there was
always the assumption that as long as creditors could be found to roll
over existing loans – and buy new ones – the game could keep going
forever. Sovereign countries have always implicitly acknowledged that
the existing debt would never be paid off because they would “grow” their way out of the apparent predicament, allowing future’s prosperity to continually pay for today’s finance.

Now, however, with growth in doubt, it seems that the Fed has taken
Charles Ponzi one step further. Instead of simply paying for maturing
debt with receipts from financial sector creditors – banks, insurance
companies, surplus reserve nations and investment managers, to name the
most significant – the Fed has joined the party itself. Rather than
orchestrating the game from on high, it has jumped into the pond with
the other swimmers. One and one-half trillion in checks were written in
2009, and trillions more lie ahead. The Fed, in effect, is telling the
markets not to worry about our fiscal deficits, it will be the buyer of
first and perhaps last resort. There is no need – as with Charles Ponzi –
to find an increasing amount of future gullibles, they will just write
the check themselves. I ask you: Has there ever been a Ponzi scheme so
brazen? There has not. This one is so unique that it requires a new
name. I call it a Sammy scheme, in honor of Uncle Sam and the
politicians (as well as its citizens) who have brought us to this
critical moment in time. It is not a Bernanke scheme, because this is
his only alternative and he shares no responsibility for its origin. It
is a Sammy scheme – you and I, and the politicians that we elect every
two years – deserve all the blame.

Still, as I’ve indicated, a Sammy scheme is temporarily, but not
ultimately, a bondholder’s friend. It raises bond prices to create the
illusion of high annual returns, but ultimately it reaches a dead-end
where those prices can no longer go up. Having arrived at its
destination, the market then offers near 0% returns and a picking of the
creditor’s pocket via inflation and negative real interest rates.
similar fate, by the way, awaits stockholders, although their ability
to adjust somewhat to rising inflation prevents such a startling
conclusion. Last month I outlined the case for low asset returns in
almost all categories, in part due to the end of the 30-year bull
market in interest rates, a trend accentuated by QEII in which 2- and
3-year Treasury yields approach the 0% bound. Anyone for 1.10% 5-year
Treasuries? Well, the Fed will buy them, but then what, and how
will PIMCO tell the 500 billion investor dollars in the Total Return
strategy and our equally valued 750 billion dollars of other assets that
the Thanksgiving Day axe has finally arrived?

We will tell them this. Certain Turkeys receive a Thanksgiving
pardon or they just run faster than others! We intend PIMCO to be one of
the chosen gobblers.
We haven’t been around for 35+ years and not
figured out a way to avoid the November axe. We are a survivor and our
clients are not going to be Turkeys on a platter. You may not be
strutting around the barnyard as briskly as you used to – those near 10%
annualized yields in stocks and bonds are a thing of the past – but
you’re gonna be around next year, and then the next, and the next.
Interest rates may be rock bottom, but there are other ways – what we
call “safe spread” ways –to beat the axe without taking a lot of risk:
developing/emerging market debt with higher yields and non-dollar
denominations is one way; high quality global corporate bonds are
another. Even U.S. Agency mortgages yielding 200 basis points more than
those 1% Treasuries, qualify as “safe spreads.” While our “safe spread”
terminology offers no guarantees, it is designed to let you sleep at
night with less interest rate volatility. The Fed wants to buy, so come
on, Ben Bernanke, show us your best and perhaps last moves on Wednesday
next. You are doing what you have to do, and it may or may not work. But
either way it will likely signify the end of a great 30-year bull
market in bonds and the necessity for bond managers and, yes, equity
managers to adjust to a new environment.

If a country gets the politicians it deserves, then the same can be
said of an investor – you’re gonna get what you deserve. Vote No to
Republican and Democratic turkeys on Tuesday and Yes to PIMCO on
Wednesday. We hope to be your global investment authority for a new era
of “SAFE spread” with lower interest rate duration and price risk, and
still reasonably high potential returns. For us, and hopefully you,
Turkey Day may have to be postponed indefinitely.

William H. Gross
Managing Director


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Wed, 10/27/2010 - 10:15 | 680336 scratch_and_sniff
scratch_and_sniff's picture

Bill Gross said this, HAAA WTF!

Wed, 10/27/2010 - 10:38 | 680410 1100-TACTICAL-12
1100-TACTICAL-12's picture

Sounds like Bill, has had a Jerry Maguire moment...

Wed, 10/27/2010 - 11:18 | 680447 ZakuKommander
ZakuKommander's picture

Heh, Bill buys crapola thinking there's going to be "shock and awe" next week, then gets the word it's going to be lame.  Hilarity (not to mention bitterness) ensues.

Wed, 10/27/2010 - 12:14 | 680703 chopper read
chopper read's picture

clever observation, Zaku.

Wed, 10/27/2010 - 14:34 | 681082 B9K9
B9K9's picture

Actually, reality is beginning to hit home even for Bill. No, not in the pocket book, but the constant visual assault.

There are plenty of 'for lease' signs in CDM, Fashion Island and along the PCH in W Newport Beach. But the real kicker is the slow progress being made in El Morro.

Bill must be appalled by the view, both out his window, and as he drives north and sees the shambles @ Crystal Cove.

What Bill probably realizes is that nowhere will be safe if even protected coastal enclaves begin to look the leeward side of Oahu. There are already fleets of 'bandit RVs' prowling the beach cities.

Wed, 10/27/2010 - 16:36 | 681464 SWRichmond
SWRichmond's picture

These guys know what the reality is and they just want to have something they can point to and say they're on the right side of history.

Wed, 10/27/2010 - 17:34 | 681608 Dont Taze Me Bro
Dont Taze Me Bro's picture

That's what I think too. 

His article is actually pretty stupid. Similar to a heroin addict saying: I do this shit and it's going to kill me, but I have no choice,  I have to do it. wtf???

Wed, 10/27/2010 - 17:11 | 681567 Wynn
Wynn's picture

Bill loves stamps. Perhaps he dreams of being on one someday. As a tribute to swindlers, or something.

Wed, 10/27/2010 - 12:36 | 680776 MeTarzanUjane
MeTarzanUjane's picture

Bill buys based on promises from the originators.

He gets pissed when the promises are broken and no remedies are made to satisfy the losses.

Wed, 10/27/2010 - 13:04 | 680847 FEDbuster
FEDbuster's picture

No "shock and awe" next week.  They have been too successful with the trickle of POMO on a weekly basis, nudge not shove.  Our demise will be like what is referred to as "Chinese water torture" drip, drip, drip....  Death by a thousand little ($1-10 billion) injections.

Unless they have to bail out the TBTF banksters from Foreclosuregate, then they will boost the balance sheet by whatever it takes to save "the system".

Wed, 10/27/2010 - 13:26 | 680914 MeTarzanUjane
MeTarzanUjane's picture

I predict a romantic candlelit dinner for two at Moonshadows of Malibu on the PCH. Apologies and promises resurrected.

Taxpayers footing the bill.

Wed, 10/27/2010 - 16:17 | 681409 FEDbuster
FEDbuster's picture

Don't forget a promise to buy all the defective MBSs PIMCO bought on margin at a discount for full face value.  Kiss, kiss, hug, hug...

Wed, 10/27/2010 - 16:22 | 681421 centerline
centerline's picture

Wasn't there already an analogy to a putter?  (As opposed to pulling out the oversized driver).  God forbid.

Wed, 10/27/2010 - 12:48 | 680802 SheepDog-One
SheepDog-One's picture

Agreed Zaku!

Wed, 10/27/2010 - 20:00 | 681936 Fearless Rick
Fearless Rick's picture

Take a break. World Series starts in 3, 2, 1...

Wed, 10/27/2010 - 14:02 | 681001 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Sounds like Bill lit up a big fat one ...

Vote no to everyone and vote yes for PIMCO which supports the FED even though he is telling you it should not, except for the fact that he is frontrunning inside info, so it would be unwise to get off of that gravy train ... hence, vote yes for PIMCO !

Wed, 10/27/2010 - 14:44 | 681117 midtowng
midtowng's picture

Bill Gross is famous for talking his book.

Wed, 10/27/2010 - 10:53 | 680457 Sean7k
Sean7k's picture

What a piece of horseshit. Attempting to absolve the FED, who own the representatives in government, who dictate there every action in the form of legislation, who run treasury from the comfort of the NYFRB, of all blame and placing it on the Parties they control and from whom we have to pick candidates who speak different dogma, but vote in the exact same way.

The same Bill Gross who picked the tranche components of GS for his profits, who got inside info from the FED on his bond purchases before the POMO game started. Now, he attempts to pay them back with this garbage. 

Tyler, I know you try to be fair and perhaps this was just an opportunity to pile on, but what a steamy pile of crap.

Wed, 10/27/2010 - 11:32 | 680570 NumberNone
NumberNone's picture

The Fed does what it does because our government can't stop spending...the drivers behind it all may be up for debate but if the government lived within its means there would be no need for a Ponzi scheme.  

Wed, 10/27/2010 - 12:27 | 680752 MarketTruth
MarketTruth's picture

The Fed wants to be dissolved so the SAME owners can then launch the IMF's SDR. Think of it as folding up your small operations in the USA for enhancing your larger operations that encompass the USA, Europe, etc. Call it a consolidation of power by the same owners.

Wed, 10/27/2010 - 12:37 | 680777 wisefool
wisefool's picture

HoneyPot. Reminds me of the movie "Contact" with Jody foster. They made a huge effort to let everyone know exactly where the launch site was. It is attacked by terrorist. Meanwhile the real launch site was in Japan.

Maybe we should buy Yen?

Wed, 10/27/2010 - 14:53 | 681156 TeamAmerica
TeamAmerica's picture

Not exactly.   There were TWO "launch sites".   The one that was destroyed was not a decoy.


Wed, 10/27/2010 - 15:19 | 681234 wisefool
wisefool's picture

Right. Not splitting hairs, but in IT, honeypots are real computers. Have similar capabilities, costs, maintenance, etc. They just don't have the same mission expectations as the others......

Wed, 10/27/2010 - 13:32 | 680930 Rollerball
Rollerball's picture


Wed, 10/27/2010 - 14:06 | 681009 Monday1929
Monday1929's picture

I've always suspected that the FED would be sacrificed, (after it was loaded up with all the criminalbanks losses), to be re-formed under a different guise. This is the first time I've seen this voiced by another.

Also, does anyone know if it is true that the entire banking system can be called upon to make good the FED's losses, by law?

Wed, 10/27/2010 - 12:45 | 680795 Walter_Sobchak
Walter_Sobchak's picture

mold in a petri dish can't grow forever, neither can our economy.  We might have been able to grow and continue to consume if all the jobs weren't gone, but now that they are, the only way the American worker can compete is to lower himself to chinese slave labor standards.  Growth is gone, people don't want to conspicuously consume anymore.  the old road is rapidly fading.

Wed, 10/27/2010 - 12:46 | 680797 downrodeo
downrodeo's picture

Haha, the government has no means save what we allow it.

Wait, that is wrong.

The government has no means save what it forcefully rips from our wallets at the point of a gun.



i know what you're saying though.

Wed, 10/27/2010 - 10:55 | 680469 DarkMath
DarkMath's picture


Bill Gross is pure bull shit. He's saying the Bond Bubble will end and then saying how it will not end all in the same paragraph. The Bond Bubble will go on for years to come as the Fed continues to print money to purchase Treasury Debt. There's nothing to see here.

What's more interesting to me is Bill Gross's double speak. Why would he say this when he knows he'll continue to make millions  going long US G'ment debt? The answer is simple, just like Greenspan Bill Gross has to make himself right with the History books. Bill Gross has to "find religeon" in print. The fact that he's busy sinning his ass off makes no difference to him. If he really felt this way he'd sell everything in the Pimco Total Return fund and put it all on Gold and Farmland.

Wed, 10/27/2010 - 12:47 | 680799 Troy Ounce
Troy Ounce's picture



+ 31.1035

Wed, 10/27/2010 - 13:15 | 680890 Blano
Blano's picture

That's what I was wondering.  If the SHTF re: bonds, why not just cash out and return the money to shareholders before the blowup??

Wed, 10/27/2010 - 13:26 | 680913 DollarDive
DollarDive's picture

Darkmath - Couldn't agree with you more.  Actions speak louder than words.  He's so full of shit.

Wed, 10/27/2010 - 11:12 | 680525 Dadoomsayer
Dadoomsayer's picture

how do you spell scumbag?  BILL GROSS

tells the fed that if they do not start buying mortgage paper he will dump all his in middle of the crisis, then when they say they will he front runs them and buys more.  this guy should be in jail.

Wed, 10/27/2010 - 12:39 | 680779 MeTarzanUjane
MeTarzanUjane's picture

Actually he has done a lot to raise the tide for all parties involved.

Wed, 10/27/2010 - 11:21 | 680540 theXman
theXman's picture

>> Vote NO in November – no to both parties. Vote NO to a two-party system that trades promises for dollars and hope for power, and leaves the American people high and dry.


Wow, didn't know Bill Gross was a closet TEA bagger. LOL

Glad that he came out. Join the crowd, bro!

Wed, 10/27/2010 - 13:12 | 680881 AbandonShip
AbandonShip's picture

2 books come to mind:

1. This Time is Different (Rogoff and Reinhardt) which Gross alluded to in the piece above.

2. Dime's Worth of Difference (documents 2 party failure pretty well)



Wed, 10/27/2010 - 15:31 | 681280 chopper read
chopper read's picture

string this fucker up by his ankles and hang him from the Brooklyn Bridge for high treason. 

Wed, 10/27/2010 - 16:37 | 681465 anarkst
anarkst's picture

This guy is one of the most self-serving parasites ever to be hatched on the surface of this planet.

Wed, 10/27/2010 - 10:16 | 680337 jkruffin
jkruffin's picture

Anyone else notice how Reuters issues a PR today regarding the $1 trillion cash that US companies are hoarding?  I guess they have to get the real stories from ZH and BoomBustBlog,  because the media is a dollar late and a dollar short everyday.  ZH had already reported this several times.  Nice Job Tyler and company.

We are you going to get your TV show and put CNBC out of business?

Wed, 10/27/2010 - 10:30 | 680378 lynnybee
lynnybee's picture

I'd love to see CNBC morph back into what they started out as in 1980's, a CONSUMER AFFAIRS channel !   I remember when they had programming aimed at finding bargains & consumer rip-offs     what I wouldn't give to see that damn JOE KERNAN'S smug face gone.   

Wed, 10/27/2010 - 11:00 | 680490 reading
reading's picture

Personally, I hope they turn it into a home shopping channel...

Wed, 10/27/2010 - 12:05 | 680676 FEDbuster
FEDbuster's picture

It isn't already?

Wed, 10/27/2010 - 13:00 | 680842 Unlawful Justice
Unlawful Justice's picture

Selling only toilet paper for there own brand of commode.

Wed, 10/27/2010 - 13:14 | 680886 RockyRacoon
RockyRacoon's picture

It already is like HSN.   Touts overpriced baubles with a guarantee of being a great investment.  Trouble is, like HSN, they are not liable for their libel.

Wed, 10/27/2010 - 12:43 | 680793 mrhonkytonk1948
mrhonkytonk1948's picture

Kudlow makes me vomit in my mouth.

Wed, 10/27/2010 - 14:12 | 681026 Monday1929
Monday1929's picture

Kudlow is pure CIA plant.

Wed, 10/27/2010 - 13:03 | 680848 wisefool
wisefool's picture

They (CNBC) are struggling hard today. And it is not just the market drop. Last night Pento was on Kudlow. Nothing new or radical but Kudlow let him talk. That might have been what got Gross going for whatever motive he is trying to play out with this piece. It will probably be cleared up when we see him talk today.

Wed, 10/27/2010 - 21:30 | 682134 Fearless Rick
Fearless Rick's picture

I am so with you on that. To see Kernan's smug, Republican-ass-licking, I'm-so-with-it grill underneath Les Monves' thumb would be worth double his weight in gold. And that's a lot of gold.

Wed, 10/27/2010 - 10:35 | 680401 Rahm
Rahm's picture

Agree, except the media is $2mm short and 2years late.

Wed, 10/27/2010 - 10:46 | 680439 huntergvl
huntergvl's picture

I saw that too, Jk, and had exactly the same thoughts.....There was no mention of the almost $4 Trillion in debt. Thanks mucho, Zerohedge. My thinking also is that if the corporations do have favorable debt terms and can actually put some of that $1 Trillion excess to use, it sure as hell won't be in US markets. More money heading OUT of US markets. Gross says this in his essay as well.

I am still holding PTRAX as it has been very good to me for a few years now, but once stocks capitulate (sometime before May 1st 2011), and the run to safety boosts PIMCO one more time, I will likely be a seller, eschewing 3-4% returns from PIMCO for attractive valuations in hard asset stocks for the long term. I particularly like Transocean, especially if the lawsuits drive the price down further. 2011 will be a great year, again!!!

Wed, 10/27/2010 - 11:13 | 680527 Caviar Emptor
Caviar Emptor's picture


Wed, 10/27/2010 - 10:19 | 680342 Robslob
Robslob's picture

Someone piss in Bill's Wheaties or what?

Wed, 10/27/2010 - 10:28 | 680371 Charlie Bravo
Charlie Bravo's picture


Charlie Bravo

Wed, 10/27/2010 - 11:40 | 680594 Dr. Engali
Dr. Engali's picture

He know's the fed's plan will give him a short term gain but crush him in the long run.

Wed, 10/27/2010 - 13:16 | 680892 RockyRacoon
RockyRacoon's picture

The Fed probably thought it best to stop giving PIMCO pre-market information.

That surely pissed ole Bill off.   He sure carries a grudge!

Wed, 10/27/2010 - 10:19 | 680343 Machiavelli1
Machiavelli1's picture

Go Bill Go!!!

nice post zh

Wed, 10/27/2010 - 10:19 | 680344 LeBalance
LeBalance's picture

I think Bill has called a Vince Foster on his own ass.

Wed, 10/27/2010 - 10:34 | 680372 Cognitive Dissonance
Cognitive Dissonance's picture

I think "we" are being set up for a major disappointment from the Fed. Has anyone else noticed the number of "respected" money men who over the past few months have declared that the Fed is the Wicked Witch of the West?

Just speculating here but if I wanted to back off the printing press (for whatever reason) and the market was "expecting" me to keep the pedal to the metal, I would need lots of cover in order to back off. Gross is just the latest of the Feds "in my pocket stooges" that is suddenly speaking ill of the Fed.

I smell a "surprise" come Nov 3rd.

Reminds me of a conversation I overheard in a bank I worked for many years ago. "Make me stop writing bad checks."

Wed, 10/27/2010 - 10:37 | 680403 NOTW777
NOTW777's picture

time to run from pimco

Wed, 10/27/2010 - 13:44 | 680962 chopper read
chopper read's picture

right.  promising future returns with small amounts of logic as the basis is a 'hail mary' from the bond capital of the world. 

Wed, 10/27/2010 - 10:40 | 680419 Ratscam
Ratscam's picture


count me in!

Wed, 10/27/2010 - 10:48 | 680421 IBelieveInMagic
IBelieveInMagic's picture

Or it could just be cover that this devaluation is being done against Bill's enlightened side, but what the hell he will go ahead and enjoy the benefits anyways! WTF, PIMCO has been buying MBS on the margin per ZH's reports recently! Watch the money trail...


Wed, 10/27/2010 - 13:35 | 680937 King_of_simpletons
King_of_simpletons's picture

These moneymen don't come out and speak "the truth" to the masses, which the masses already know BTW, unless there is something sinister going on...something more profitable to them brewing.

Wed, 10/27/2010 - 10:57 | 680478 huntergvl
huntergvl's picture

I disagree on the 'surprise,' Cog. Bernanke doesn't have to tell the truth and he won't. I feel they are gauging sentiment, and leaking numbers to get a feel for what will do the least harm and keep the all important DOW above 11,000.

The FED is going to be QEing his ass off, regardless of what is said next Wednesday. They have to mollify China first and foremost with 'strong' rhetoric, and throw a bone to the US markets, but POMO will continue, FED backroom purchases of just about any and all assets will continue.

I think their might be a slight deviation from what the market expects either positive or negative, but my belief is, none of what is said Wednesday amounts to spit. QE is the last tool in the bag and the question of whether it will work has already been answered, but how its spun, wrapped, and presented, still has effect, if only for days.

Wed, 10/27/2010 - 11:03 | 680499 Cognitive Dissonance
Cognitive Dissonance's picture

I didn't say or imply the Fed wasn't going to POMO. I said I felt they were going to disappoint.

The maket expects them to put the pedal to the metal. They may not want to do so now, maybe because it's not That would be a (major) disappointment.

Wed, 10/27/2010 - 11:16 | 680534 Caviar Emptor
Caviar Emptor's picture

Short term disappointment, that's part of the plan.

Wed, 10/27/2010 - 16:45 | 681490 Hook Line and S...
Hook Line and Sphincter's picture

Feels like we are on the green mile walk, but right before we get to the end, it suddenly stretches out another mile, and so on and so and so on.....

Wed, 10/27/2010 - 11:37 | 680585 LeBalance
LeBalance's picture

I don't think the Fed can disappoint me.  It is a long road, and sometimes I too get caught up in the "pedal to the metal rush."  We are already pedal to the metal right now, in our frog boiling pot we are just not able to appreciate a counter society run without the buy-buy-buy inflation-induced psyche. How can we?

Given the incessant leakage of information (WSJ, Fed speeches, etc) I think that the EE have outlined their position for a high QE 2 response.  I am prepared for "boring!" but I am also prepared for a major event driven response (Foreclosure Detonation[Death'o'MBS]>>MAX(TARP)[QE(N)]) :: Confidence Crash)

At some point confidence does crash, it is just a matter of whether the EE wish it to be 11/3 or not.

This is all general stuff that everyone here knows.

Wed, 10/27/2010 - 13:46 | 680966 DosZap
DosZap's picture



If they shoot the entire wad, and it doesn't stick, their really fkd.

By POMO in incrementalism, it shows "restraint", to a degree.

And, unlike a HUGE turd, a smaller one draws less flies(public infuriation).

This just makes sense for THEM, it D_R_A_W_S it out, and gives them more time.

They know whatever they do will not help,but J6P does not, and it buy's them time, and that allows them to milk us for more,not piss off Ching Dow as much as a major dump.

If they had half a brain, they would send thousands of dollars to consumers directly.It would hit the markets, and economy like a sledge hammer,might not last long, but it would buy time,and time is what they do not have.

Plus it would damn sure STIMULATE what needs stimulation.

Wed, 10/27/2010 - 11:22 | 680533 Problem Is
Problem Is's picture

"Has anyone else noticed the number of "respected" money men who over the past few months have declared that the Fed is the Wicked Witch of the West?"

WillB7... Order Up
Bennie Bernank-ster in a black dress and witch (or which) hat in a Fed/Wall St. version of the Lizard of Oz...

  1. Dimon as the Coward (Lion)...
  2. Obummer as the Strawman...
  3. Lloyd Blank-dick-fein as the Tin (no heart) man...
  4. Barney Frank as the "Good" Witch...
  5. Dodd as "The" Flying Monkey... and

Timmay as Dorothy...

Wed, 10/27/2010 - 11:46 | 680615 Cognitive Dissonance
Cognitive Dissonance's picture

You had me laughing out loud at the "Lizard of Oz" part.

Wed, 10/27/2010 - 11:56 | 680649 Problem Is
Problem Is's picture

I just thought "What would WillB7 do?"

I liked Dodd and Timmay myself... I insulted so many with that post, it is hard to tell who would junk me...

Being <junk>ed is like losing my virginity...

Wed, 10/27/2010 - 13:31 | 680929 MeTarzanUjane
MeTarzanUjane's picture

Uh huh, like a 18 yo Thai girl. ??????

Wed, 10/27/2010 - 14:45 | 681121 the rookie cynic
the rookie cynic's picture

Only fitting that the wizard was trying to leave Oz, do you a balloon!


Wed, 10/27/2010 - 12:21 | 680730 A_MacLaren
A_MacLaren's picture

"Make me stop writing bad checks."


That line reminds me of the theme of a party I attended years ago in SillyCon Valley which was;

"Beat me, whip me, make me write bad checks."

Wed, 10/27/2010 - 12:30 | 680759 Cognitive Dissonance
Cognitive Dissonance's picture


In your case, someone is begging to be forced to write bad checks.

In my case, the customer was begging the customer service rep to stop him from writing bad checks.

PS: The customer rep closed his account, effectively making him stop writing bad checks. Considering how long he did so at my bank and how bad his "record" was (which is shared among banks) he wasn't able to open another checking account at some other bank. Problem solved. :>)

Wed, 10/27/2010 - 13:05 | 680855 Troy Ounce
Troy Ounce's picture

CD, you could be right. I noticed the same. But does the Fed have an alternative, other than perhaps a bank holiday for a week and the devaluation of the US$ with 50-60%?

Wed, 10/27/2010 - 14:54 | 681157 RockyRacoon
RockyRacoon's picture

Mark their gold to market.

Wed, 10/27/2010 - 16:40 | 681480 nuinut
nuinut's picture

... physical only.

CB physical reserves at MTM free physical market valuations solve the problems by definition.

Wed, 10/27/2010 - 17:08 | 681554 tip e. canoe
tip e. canoe's picture

not sure where i read this but it was talking about how FED can't MTM the gold on their balance sheet because it's listed as 'gold certificates' issued by Treasury.   do you know anything about this nuinut?

Wed, 10/27/2010 - 17:43 | 681643 RockyRacoon
RockyRacoon's picture

The gold certificates have denominations in dollars, payable in gold. 

They'll just have to work that shit out somehow.   Details, details.

A new type of gold certificate, series of 1934, in denominations of $100, $1,000, $10,000, and $100,000, was issued only to Federal Reserve banks against certain credits established with the Treasurer of the United States.  These certificates are not paid out by Federal Reserve banks and do not appear in circulation.  They bear on their face the wording:  "This is to certify that there is on deposit in the Treasury of the United States of America dollars in gold, payable to bearer on demand as authorized by law."  Gold certificates, however, have not been printed since January, 1935.  Under the Gold Reserve Act of January 30, 1934, all gold held by the Federal Reserve banks was transferred to the U.S. Treasury, in accordance with Presidential Proclamation of January 31, 1934, the former receiving the gold certificate credits on the books of the Treasury at the former statutory price for gold $20.67 per ounce.  Gold assets were valued at $35 per fine troy ounce, giving effect to the devaluation January 31, 1934, until May 8, 1972, when they were revalued at $38 pursuant to the Par Value Modification Act, P.L. 92-268, approved March 31, 1972.  The increment amounted to $822 million.  Gold assets were subsequently revalued at $42.22 pursuant to the amendment of Section 2 of the Par Value Modification Act, P.L. 93-110, approved September 21, 1973.  This increment amounted to $1,157 million.  All of the U.S. Treasury's monetary gold stock valuation, including the preceding revaluation increments, has been monetized by the U.S. Treasury by the issuance to the Federal Reserve banks of $11,160,104,000 for their gold certificate account (total as of close of 1980).  In addition, the U.S. Treasury monetized $2,518 million (as of close of 1980) of the U.S. special drawing rights by issuance to the Federal Reserve banks for their special drawing rights certificate account.

Wed, 10/27/2010 - 18:00 | 681679 nuinut
nuinut's picture

The Fed can get some back from the Treasury... if gold is revalued, those certificates aren't going to buy much of it back, are they?

Inflation cuts both ways...

Thu, 10/28/2010 - 07:06 | 682779 tip e. canoe
tip e. canoe's picture

great point, anyone speculating on the FED's future chess moves should always keep this variable in the back of one's mind imo.

thanks for the clarification rock.

Thu, 10/28/2010 - 07:18 | 682785 tip e. canoe
tip e. canoe's picture


Wed, 10/27/2010 - 10:20 | 680345 primefool
primefool's picture

All the high and mighty are slowly going insane. There is only so much cognitive dissonance a human mind can take. Well deserved I might add!!

Wed, 10/27/2010 - 10:25 | 680363 jus_lite_reading
jus_lite_reading's picture

Either Bill is having a monumental moment of clarity, or he is throwing in the towel and saying farewell before he moves into his underground bunker.

Wed, 10/27/2010 - 10:30 | 680380 Big Corked Boots
Big Corked Boots's picture

The pressure is getting to 'em. Some handle it better than others... the ones who handle it best are the ones who have thier hand on the levers.

Wed, 10/27/2010 - 10:32 | 680390 Cognitive Dissonance
Cognitive Dissonance's picture

There is only so much cognitive dissonance a human mind can take.

Did someone ring my bell? :>)

May I rephrase your excellent statement? "There is only so much cognitive dissonance a conditioned human mind can take."

A mind mostly free from the conditioning and manipulation doesn't usually experience many cognitive dissonances.

Wed, 10/27/2010 - 10:33 | 680397 jus_lite_reading
jus_lite_reading's picture

Case in point: Nazi soldiers.

Wed, 10/27/2010 - 12:11 | 680696 Lets Hang Parliament
Lets Hang Parliament's picture

A long long time ago PIMCO's outpourings were educational but as they grew and got too pally with big Gov they just became another mouthpiece but too many were already conditioned and haven't made the connection; or should I say they haven't disconnected?

This latest piece is a classic example of hidden agendas and is sending the CD reading off the scale! Where has a lot of the money from retail equity mutual funds gone? Bonds. He is conditioning his fund holders for a "litle bit of pain". It wont hurt! Honest!

Wed, 10/27/2010 - 12:28 | 680755 Unlawful Justice
Unlawful Justice's picture

Tortured in silence from unconscious defenses used to ward off buried feelings of worthlessness and shame.  Image is not reality.  Objective truth is the brutal master of everything.  

Wed, 10/27/2010 - 12:35 | 680774 Cognitive Dissonance
Cognitive Dissonance's picture

Tortured in silence from unconscious defenses used to ward off buried feelings of worthlessness and shame

Very nice.

We as a culture and a country have become so neurotic, yet people will vehemently dispute this. Consider the epidemic of obesity that grips the USA. How many people are trying to drown out the inner screams with food, drugs and the welcome mindless oblivion achieved through their TeeVee.

Wed, 10/27/2010 - 12:56 | 680816 Walter_Sobchak
Walter_Sobchak's picture

I find Horror Movies to do the trick, see some screen screams to quiet the inner screams. The whole thing is just a conspiracy to cure the obesity epidemic, amateurs.

Wed, 10/27/2010 - 16:47 | 681501 nuinut
nuinut's picture

A mind mostly free from the conditioning and manipulation doesn't usually experience many cognitive dissonances.

Except when attempting dialogue with those less free from said conditioning.

Wed, 10/27/2010 - 17:09 | 681559 Apocalicious
Apocalicious's picture

+100. You get called a pessimist, a quack, a debby downer, grumpy, a conspiract nut, perenially unhappy, etc. when in fact you are none of those things, merely audacious enough to point out reality. That definitively dissonances my cognition...

Wed, 10/27/2010 - 18:04 | 681690 nuinut
nuinut's picture

LOL. Just as well we know it doesn't matter.

Wed, 10/27/2010 - 16:51 | 681510 Hook Line and S...
Hook Line and Sphincter's picture

Senor Cognitive Dissonance,

Have you checked out Derren Brown, NLP practitioner extraordinaire?

In many ways, he is a lot like Ben Bernanke and friends.

Wed, 10/27/2010 - 10:21 | 680347 lizzy36
lizzy36's picture

You are never going to be able to "call it quits". NEVER.



Wed, 10/27/2010 - 10:22 | 680352 Swing Trader
Swing Trader's picture

Bill does these papers monthly and have always been a must read.  You can also get it via audio podcast.

Wed, 10/27/2010 - 10:31 | 680382 Charlie Bravo
Charlie Bravo's picture

You can find his commentary on PIMCO's website.

They are hilarious...

Charlie Bravo 

Wed, 10/27/2010 - 10:23 | 680353 jus_lite_reading
jus_lite_reading's picture

I have never, ever, in all my years have seen this level of honesty from anyone in a position of power. Thank you Bill for this great letter. Although I have already been aware of this for two years, seeing it in writing from a person of your stature tops the cake. Now, if you can please expose the corrupt banks and their fraudulent practices, you will have the attention of the world.

Wed, 10/27/2010 - 10:39 | 680415 Central Wanker
Central Wanker's picture

Gross has been aware of this crap for at least two years as well. Why he is suddenly "telling the truth"?

Wed, 10/27/2010 - 10:53 | 680458 jus_lite_reading
jus_lite_reading's picture

Honestly, I believe he did not realize this could occur so rapidly. He was conditioned to believe the system can simply never end: that is, until something recent in his life occurred.  What that was, I do not know. I do know, this letter was written like a suicide note. It's very heavy, filled with regret.

Wed, 10/27/2010 - 17:07 | 681552 Translational Lift
Translational Lift's picture

Eventually the Fed will F*ck over everyone..............

Wed, 10/27/2010 - 11:01 | 680494 kaiserhoff
kaiserhoff's picture

Good question.  I read this that Bill has finally succeeded in hedging his toxic rubbish 5 times over with AIG, aka the American taxpayers.  Kaching!

Wed, 10/27/2010 - 11:04 | 680503 Rainman
Rainman's picture waiting for water to boil, evidence of policy failure typically takes time. Ask the Japanese.

Wed, 10/27/2010 - 11:27 | 680550 Rogerwilco
Rogerwilco's picture


Gross has been aware of and warning about this building shit storm for over two decades. That knowledge of impending doom hasn't stopped him from making a nickel here and there. PIMCO's strategy for the past two years is to figure out (cough, cough) what the Fed will be buying next, and then to buy it first. He's made his nut and probably doesn't give a shit, so outside of helping a friend now and then, his comments probably contain more wisdom than what we hear from book-talking assholes like Soros and Buffet.

Wed, 10/27/2010 - 14:58 | 681169 chopper read
chopper read's picture

book-talking assholes like Soros and Buffet.

ain't this the truth.  that said, Gross talks his book on CNBC all of the time.  His "honesty" comes at a time where there is no more book-talking possible.  In other words, when every other option is no longer a possibility, Bill Gross does the "right thing".

so we can all say that this billionaire insider "sure is a man of the people". 

this is about Bill Gross's version of Bill Gross's legacy in the history books, and his blatant attempt to manipulate us with a "word of candor" that has come far too little too late.

...just my two cents.  

Wed, 10/27/2010 - 14:58 | 681171 RockyRacoon
RockyRacoon's picture

That's too logical.  Entertain this thought:  Timmy put his limp little wrist around Bill's neck but was rebuffed.  You know how bitchy one can get and engender a feud.

Wed, 10/27/2010 - 16:53 | 681515 Hook Line and S...
Hook Line and Sphincter's picture

The best of those adept at deceit always use truck loads of truth to achieve their goals.

Wed, 10/27/2010 - 10:24 | 680355 primefool
primefool's picture

Its just too taxing on the human mind and on human systems to carry on a fraud of epic proportions. The stress will take out all but a few pathological types. There is a reason non-fraudulent systems just work better - its less stressful.

Wed, 10/27/2010 - 10:33 | 680392 jus_lite_reading
jus_lite_reading's picture

As the Titanic was sinking, "The Powers That Were" (TPTW) commanded that the music continued to play til the very end. Some dissidents, broke away under their guilt and helped the people get off before it was too late. The majory of TPTW however, continued on their defiant path, calling for calm and order- "Everything is fine" they chanted. "Do not look at the man behind the curtain!" they shouted as they packed their own belongings and boarded boats. Who was one of the first to get off?

The parallels to this global financial system are too numerous to mention.

Wed, 10/27/2010 - 10:55 | 680467 Wynn
Wynn's picture

Fear can cause men to do the unspeakable. 

Buckle up.

Wed, 10/27/2010 - 12:47 | 680801 mrhonkytonk1948
mrhonkytonk1948's picture

I can already hear the strains of "Nearer My God to Thee".

Wed, 10/27/2010 - 13:42 | 680950 Wynn
Wynn's picture


Wed, 10/27/2010 - 14:09 | 681015 High Plains Drifter
High Plains Drifter's picture

Some of the richest men in the world, went downstairs and put on their best suits and then joined the band and listened to the music as the ship sunk and they all died. Not far away was a trawler , which was illegally fishing in the area, and when the sos went out, it refused to answer the call, because it was not supposed to be in that area, and it slowly sailed away while the Titanic sunk.

Wed, 10/27/2010 - 17:00 | 681529 centerline
centerline's picture

I'm locked in the lower decks.  Can't even hear the music.  This sucks.

Wed, 10/27/2010 - 10:46 | 680438 DaveyJones
DaveyJones's picture

As somebody said last week, it may be one of the few products the US still exports: pathologically strong financial instruments 

Wed, 10/27/2010 - 10:26 | 680356 frankTHE COIN
frankTHE COIN's picture

Thanksgiving is turkey Holocaust and QE2 is the host.

Wed, 10/27/2010 - 10:24 | 680358 Ragnarok
Ragnarok's picture

He's fucking with us. It sounds like a psychologist wrote this.

Wed, 10/27/2010 - 10:35 | 680402 umop episdn
umop episdn's picture

""Whatever the conclusion, not only investors, but the American people should recognize that Wednesday, even more than Tuesday, represents a critical inflection point in determining our future prosperity.""

"" It is a Sammy scheme – you and I, and the politicians that we elect every two years – deserve all the blame.""


Wed, 10/27/2010 - 11:41 | 680595 macholatte
macholatte's picture


you left one out

Still, while next Wednesday’s announcement will carry our qualified endorsement, I must admit it may be similar to a Turkey looking forward to a Thanksgiving Day celebration.


this is "don't blame me, I didn't do it. It looked like a good idea at the time" CYA blather. Then it will be "nobody could have forseen the terrible consequences so nobody is to blame" government endorsement and official "Get Out of Jail Free Card".


Wed, 10/27/2010 - 15:02 | 681180 chopper read
chopper read's picture

he's a nazi collaborator turned friend to the allied forces as the winds of revolution blow ever stronger.  he is the ultimate wall street insider turned wall street outsider with his expose.  ...i don't think so, Bill.   

Wed, 10/27/2010 - 10:56 | 680475 Blues Traveler
Blues Traveler's picture


Wed, 10/27/2010 - 10:25 | 680360 High Plains Drifter
High Plains Drifter's picture

Abandoning ship Mr Gross?  Wasn't this the same pinhead  that told everyone that the 700B dollar stimulus was needed in 2008?  Bastard.....

Wed, 10/27/2010 - 10:54 | 680412 jus_lite_reading
jus_lite_reading's picture

"Wasn't this the same pinhead  that told everyone that the 700B dollar stimulus was needed in 2008?"

On the contrary, if no stimulus was approved, the collpase we are about to experience very shortly, would have already occurred. Kicking the can down the road is all they have done. It bought TPTB some time to prepare.

Wed, 10/27/2010 - 11:03 | 680500 robertocarlos
robertocarlos's picture

The truth got junked. 

Wed, 10/27/2010 - 11:59 | 680660 jus_lite_reading
jus_lite_reading's picture

No rebuttal? Simply a 'junk?' Typical liberal.

Wed, 10/27/2010 - 12:14 | 680712 robertocarlos
robertocarlos's picture

I didn't junk you. I stated you wrote the truth and it got junked. Perhaps i miscommunicated because my junker believed I did junk you also. Sorry.

The 700 billion was a big mistake but I'm glad it passed now because it bought me time to prepare as well. 

Wed, 10/27/2010 - 12:38 | 680778 jus_lite_reading
jus_lite_reading's picture

Fair enough. I don't use the junk button but someone seems to have it out for me.

In any event, I didn't say I agreed WITH the stimulus; I simply stated that it bought some time (for the powers that be and those prudent enough to recognize what is occurring)

In my estimation, the TARP was a failure because it failed to root out the core problem- fraudulent banks, CEO's and rampant corruption- from Wall Street all the way to Capital Hill.

That being said, I am glad they "stimulated" the economy long enough for me liquidate my assets and use them to purchase tangible items needed for everyday life. Every stage was planned accordingly- from buying and selling of Treasuries, to using the proceeds to buy physical gold and supplies.

GL to you.

Wed, 10/27/2010 - 13:01 | 680845 Walter_Sobchak
Walter_Sobchak's picture

We should all thank Chairman Bernanke for forcing us to wake up lol

Wed, 10/27/2010 - 15:01 | 681179 RockyRacoon
RockyRacoon's picture

No rebuttal? Simply a 'junk?' Typical liberal.

You were junked for being a political kool-aid drinker.

Wed, 10/27/2010 - 11:13 | 680529 Wynn
Wynn's picture

just junking your junker


tyler, dump the junk app. it was cute at first, but now its just a bore. thumbs up/down can not be improved upon.

Wed, 10/27/2010 - 11:28 | 680552 Almost Solvent
Almost Solvent's picture


The JUNK button should only remove the comment from your view screen logged under your account, that way everyone can see the comment for him or her self no matter how many JUNKS beforehand.


OR, such as on other social network sites, allow users to block other users so you would never see another post from that blocked user again, unless you unblock in the future.

Wed, 10/27/2010 - 11:53 | 680553 Problem Is
Problem Is's picture

Thumbs up or down on comments... just don't let the CAPTCHA server handle it.

Now, I <junk> you Wynn...

UPDATE: Some one else junked you... I was kidding...

Wed, 10/27/2010 - 13:19 | 680897 SheepDog-One
SheepDog-One's picture

I dont get why that would have got junked. The zerohedge permabull crowd getting nervous?

Wed, 10/27/2010 - 12:47 | 680800 SheepDog-One
SheepDog-One's picture

Of course now all the rats are now abandoning the Titanic, its goin down!

Wed, 10/27/2010 - 15:02 | 681183 chopper read
chopper read's picture

high treason which should not be forgotten. 

Wed, 10/27/2010 - 10:25 | 680361 Cyan Lite
Cyan Lite's picture

Bill Gross is officially off the reservation.  I'm sure we won't see him on CNBC any time soon...

Wed, 10/27/2010 - 10:26 | 680362 NOTW777
NOTW777's picture

any more proof needed that liberalism is a mental disease?  now he claims to be against everything HE has been promoting.

of course he finds zero blame for ben

Wed, 10/27/2010 - 10:28 | 680373 NOTW777
NOTW777's picture

classic lib break down. he completely promotes and supports obama and all the dems and now that his guys have failed, he falls back to the old mantra of blaming both parties.

how can a guy this unstable be entrusted with billions?

Wed, 10/27/2010 - 11:29 | 680559 Almost Solvent
Almost Solvent's picture

I would not trust anyone (politician, banker, CEO) with billions.


Look around, they are all unstable.

Wed, 10/27/2010 - 15:03 | 681188 RockyRacoon
RockyRacoon's picture

"liberal" ??

You confine yourself to a political prison and expect to be taken seriously?

Wed, 10/27/2010 - 11:51 | 680367 Widowmaker
Widowmaker's picture

Gross is feeding the suckers exactly what they want to hear.

Wed, 10/27/2010 - 13:54 | 680988 Minion
Minion's picture

My cynical side seems to think you're on to something.......

Wed, 10/27/2010 - 10:28 | 680369 The Answer Is 42
The Answer Is 42's picture

Holy Sammy, this is one of the best diatribes I've read, ever! Gross has my respect now.

Wed, 10/27/2010 - 10:29 | 680374 John McCloy
John McCloy's picture

Why would he write this?
I do not think he was too happy with people starting to perceive him as a crook profiting off the plight of the retirees and middle class. Perhaps he is saying
"listen folks I know what is going on and I believe it to be criminal. Do not equate me to be complicit in this but understand I have to make money and will go where the returns our currently whilst Ben pummels the citizenship but I will at least do the right think and speak up and call it for what it is a dirty ponzi destined to ruin our nation"

I also do not think he liked ZH beginning to place him under the magnifier regarding his motives in past weeks.

Wed, 10/27/2010 - 10:51 | 680405 Widowmaker
Widowmaker's picture

He is a fucking crook interested in one thing -- bailout.  If you think he's not getting top-shelf treatment you're an idiot.  He's as complacent as any bank taking advantage of the systemic fraud from top to bottom.

Gross is talking his book, and will be first in line with his hands out after he seeks forgiveness.

Wed, 10/27/2010 - 10:41 | 680423 Cognitive Dissonance
Cognitive Dissonance's picture

Or he's giving the Fed an out to "disappoint" on Nov 3rd. I believe this to be the case. See my comment elsewhere on this thread.

Or he just doesn't see a profitable future to be made in this madness near term (1 3 years) and he's conditioning his shareholders to be disappointed.

Wed, 10/27/2010 - 10:54 | 680464 MJ
MJ's picture

"Or he just doesn't see a profitable future to be made in this madness near term"

He wouldn't be the first big name investor to come to this conclusion...

Wed, 10/27/2010 - 11:49 | 680633 tip e. canoe
tip e. canoe's picture

agreed he's providing air cover for BB

"It is not a Bernanke scheme, because this is his only alternative and he shares no responsibility for its origin. It is a Sammy scheme – you and I, and the politicians that we elect every two years – deserve all the blame."

Do NOT follow this link or you will be banned from the site!