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Bill Gross On Doo Doo Economics

Tyler Durden's picture


The latest from the 4th branch of government (pari passu, although junior in ranking, guarantees, subordination, and First Out rights, to Goldman Sachs)


h/t Joel


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Thu, 10/01/2009 - 17:36 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

The Bond God speaks, and the people tremble before Him. His Serene Highness was on Bloomberg Surveillance this week, where the PIMCO coined "New Normal" state of affairs was discussed in BS's typical sometimes-they're realists-sometimes-they're-drinking-the-Kool-Aid-fashion. I have to admit, it was refreshing to hear the sound of those who clearly weren't buying into Cramerican green shoots and the viability of endless Gutenberg operations. Very clinical manner about those PIMCO guys too, like casually discussing cause of death over a corpse in the morgue on an episode of "CSI: Investment Victims Unit."

Thu, 10/01/2009 - 17:47 | Link to Comment Anonymous
Thu, 10/01/2009 - 23:08 | Link to Comment Anonymous
Thu, 10/01/2009 - 17:36 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

What a joke.  I thought the Fed was slowing down MBS purchases?  Going grom 25B net to 20B net?  I GUESS that is a slowdown, but not much of one, when you double the time to make purchases but only cut purchases by 20%.

Thu, 10/01/2009 - 17:50 | Link to Comment Anonymous
Thu, 10/01/2009 - 17:38 | Link to Comment mitack
mitack's picture

Colorful fella, I like his writing style... EEECH...

Thu, 10/01/2009 - 17:42 | Link to Comment Sancho Ponzi
Sancho Ponzi's picture

I'm thinking delusionomics is a more accurate description for our current policies. 

Fri, 10/02/2009 - 08:18 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

++++++10,000.  Brilliant.

"Delusionomics." The best. Kudos.

Thu, 10/01/2009 - 17:46 | Link to Comment Bam_Man
Bam_Man's picture

I like Bill a lot more and take him far more seriously ever since he got rid of that "70's porn-star-look" mustache.

Thu, 10/01/2009 - 20:31 | Link to Comment Anonymous
Thu, 10/01/2009 - 17:45 | Link to Comment Anonymous
Thu, 10/01/2009 - 17:57 | Link to Comment MountainHawk
MountainHawk's picture

Good read... +1

Thu, 10/01/2009 - 18:06 | Link to Comment Stevm30
Stevm30's picture

Bill Gross has had a lot of success in the last year, betting that the federal government will force the people to bail out his bad bets. 

My Fannie Mae preferred are underwater? Don't worry, we'll lobby for, and get, a bailout. (They did)

My GMAC bonds are underwater?  Don't worry, we'll lobby for, and get a bailout. (They did)

Now... Won't Federal Reserve money printing inevitably drive down the price of longer dated treasuries?  Don't worry, the Fed will defend the mortgage/housing market, irrationally, at the cost of every other class of assets... (we'll see)

Bill Gross is as bad as any politician... this man is scum and no taxpayer should respect him... no matter how "cute" or "literary" he makes his epistles. 


Thu, 10/01/2009 - 18:11 | Link to Comment Gubbmint Cheese
Gubbmint Cheese's picture

Stevm30.. Far more eloquent than what I was going to say..I was just going to call him a world class book talking douche bag.

Thu, 10/01/2009 - 18:21 | Link to Comment AN0NYM0US
AN0NYM0US's picture

there's a reason it's called Pimpco

Thu, 10/01/2009 - 18:26 | Link to Comment Green Sharts
Green Sharts's picture

Fannie Mae preferred got bailed out?  Not hardly.


Thu, 10/01/2009 - 18:59 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Preferreds got screwed.

Not sure if BG had any of those, but he did have a LARGE position in the mortgage basis, right before the Fed announced it was going to pull a "Hunt Brothers" and corner the agency MBS market.  He must have made out like a bandit on that trade.

Thu, 10/01/2009 - 18:33 | Link to Comment Rollerball
Rollerball's picture

Agreed.  Another egotistical blivit bag.  We'll see how he smells when the PD's get flushed.    

Thu, 10/01/2009 - 18:58 | Link to Comment Daedal
Daedal's picture

What do you expect him to do, pass up on a free lunch? He might seem like a scumbag with his actions, but he's no more absurd than the people who took advantage of cash for clunkers. The policies themselves are idiotic, no doubt, but you can't blame this Gross bastard from capitalizing on a hand-out trend that's currently rising.

Thu, 10/01/2009 - 19:10 | Link to Comment Stevm30
Stevm30's picture

No - he actively promoted, and lobbied for them, knowing exactly what they were - a forced handout of taxpayer dollars into his pocket.  It's clearly unethical. 

Thu, 10/01/2009 - 20:19 | Link to Comment Daedal
Daedal's picture


Thu, 10/01/2009 - 18:17 | Link to Comment buzzsaw99
buzzsaw99's picture

Gross is full of beans:

...capitalism is morphing from its decades-long emphasis on finance and levered risk taking to a more conservative, regulated, production-oriented system...

What planet is he from?

Thu, 10/01/2009 - 22:08 | Link to Comment sgt_doom
sgt_doom's picture

Fully agree, buzzsaw99 Big Guy!

Who do we believe, Gross on drugs, or,

Mr. Fred?

Thu, 10/01/2009 - 22:50 | Link to Comment Booger Smoot
Booger Smoot's picture

I have no idea, but he must have a really good connection for whatever he's smoking.


Does he think that capitalism is just a bunch of guys betting on which way a squiggly line is going to move on a monitor?

Thu, 10/01/2009 - 18:19 | Link to Comment wheaties
wheaties's picture

Wow.  That was just awesome.  Much of my money is tied to Mr. Gross and his new normal.  Glad someone of his stature stood up and spoke out.

Thu, 10/01/2009 - 18:33 | Link to Comment Anonymous
Thu, 10/01/2009 - 18:41 | Link to Comment Anonymous
Thu, 10/01/2009 - 18:47 | Link to Comment Mos
Mos's picture

Long lead in but good commentary.  Gross is out in front of the curve predicting what most readers here have known all along, slow if not stagnating growth and a shift in global leadership in innovation and investment from the US to Asia.  Once all the lemming fund managers wake up to this reality they will have to adjust their valuations and fair value for the market.  The new numbers should lead to some startling revelations and a corresponding "oh shit" moment as they look at the P/E of their portfolio sitting at 25.

Thu, 10/01/2009 - 19:01 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Bond market participants actually understand macroeconomics.  Equity investors are almost to a person mo-mo traders, you have to be.  Fundamental investors were all killed during the dot-com bubble, and never had a chance to re-emerge.

Thu, 10/01/2009 - 19:11 | Link to Comment AN0NYM0US
AN0NYM0US's picture

"Gross is out in front ..."

no truer statement has ever been made

Thu, 10/01/2009 - 18:54 | Link to Comment AN0NYM0US
AN0NYM0US's picture
Pimco's Bill Gross Pays $23 Million in California


Seems he's movin' on up from this dump



Thu, 10/01/2009 - 19:04 | Link to Comment boooyaaaah
boooyaaaah's picture

too bad that the future USA with unionized everything will not be able to compete

Now, if we can only devalue th dollar so much that a union worker making 150 $/hr

Is Equal to a Chinese or Indian worker

Thu, 10/01/2009 - 22:11 | Link to Comment sgt_doom
sgt_doom's picture

Whay planet are you on???  The BLS study in the NY Times biz blog four weeks back demonstrated that NO JOBS have been created in the Private Sector from July 1999 to July 2009. 

Which means we have long ago reached critical mass in the offshoring of American jobs and FDI by American-based multinationals -- which are recepients of that stimulus money!

There are no jobs left, which is why unemployment has been rising for eight consecutive months in all 372 cities the BLS is tracking!  Catch a clue, dood!

Thu, 10/01/2009 - 19:10 | Link to Comment Anonymous
Thu, 10/01/2009 - 19:20 | Link to Comment Michael
Michael's picture

Please explain to me why Senator Jay Rockefeller  is spending 3.4 billion dollars of my money to sequester CO2?


“September 30, 2009


Washington, D.C. – Senator Jay Rockefeller released the following statement regarding climate legislation introduced today by Senators Barbara Boxer and John Kerry:

“The climate legislation proposed today by Senators Boxer and Kerry is a disappointing step in the wrong direction and I am against it.

“Requiring 20 percent emission reductions by 2020 is unrealistic and harmful – it is simply not enough time to deploy the carbon capture and storage (CCS) and energy efficiency technologies we need. Period.

“Our nation cannot survive without energy from coal and any viable climate policy must solidify our future by focusing on technology to make coal cleaner faster.

“I will continue studying the bill and all of its implications for our state and the coal industry. This is by no means the defining word on climate legislation in the Senate.

“I remain adamant in my conviction not to support any bill that might threaten the economy, workers or families across West Virginia.

“We should take the time to approach these issues with absolute care and diligence – they require nothing less.”


At least six Senate committees, including the Senate Committee on Commerce, Science, and Transportation, which Rockefeller chairs, have jurisdiction over climate legislation and could offer their own versions – which would ultimately have to be incorporated into one bill before being considered on the Senate floor.

Rockefeller has consistently pushed to make CCS technologies part of the solution in making the United States more energy independent. He fought to make sure funding for CCS technologies was part of the American Recovery and Reinvestment Act – and as a result, $3.4 billion was secured for low carbon coal and carbon sequestration projects.

As discussions surrounding climate legislation move forward in the Senate, Rockefeller is fighting for even stronger investments in the technologies needed to secure a confident future for West Virginia coal.

Thu, 10/01/2009 - 19:44 | Link to Comment Anonymous
Thu, 10/01/2009 - 22:40 | Link to Comment Hephasteus
Hephasteus's picture

I'd go with a bag of skin filled with shit but that's what's great about america is our freedom of adjective usage. I wonder if you lit him on fire and put him on the steps of a church if anyone would stomp it out?

Thu, 10/01/2009 - 19:22 | Link to Comment rhinotrader
rhinotrader's picture

I love Bill! (If out to lunch , talk about stamps) I am concerned as the mkt sold off on no volume (I am Short). What do the ZH"ers think? Will we rip up tomorrow after #'S?

Thu, 10/01/2009 - 20:01 | Link to Comment chindit13
chindit13's picture

We are at a critical point because the exact opposite of everything that supported the rally from March is lining up to take command.  The longs are comforting themselves with the hope that either the employment number will be good or there are still lots of folks waiting to buy the dips.  Sadly---or maybe not---cash levels of natural buyers are near market peak levels.  Severe disappointment is possible.

Imagine you are a fund manager who is either up substantially on the year---or better---has beaten your benchmark for the year.  As you put your head on the pillow tonight you start thinking that maybe it might be a good time to take some of the gains off the table and try to lock in outperformance.  The memory of last year's embarrassing defeat is still fresh;  the wound is still a scab.

On the way up you (fund manager) were forced to buy because the index was running away from you.  Your continued employment depended on being in the market.  Once in, you just sat back enjoying the pain of the shorts, many of whom had their 2008 in 2009.  The continually rising market made you both happy and complacent.

During the rise you began to think your year was over.  You had already beaten the market, and so long as your indexing skills (or stock picking) was good, outperformance was locked in no matter what the market did from here on out.

Suddenly that does not seem good enough.  The possibility of a rapid decline has you thinking about being a hero, that is, getting out before the fall and REALLY beating your benchmark.  Your finger is now on the trigger (just like it was in October 1987 when you were going to "just sell a few hundred thousand S&P's as portfolio insurance").

If the rout begins, you'll pull the trigger.  If not, you'll hold tight.

A bad employment number could start the rout, because it will encourage the non fund manager (i.e., someone for whom "plus for the year" rather than "beating the benchmark" is more important) to sell.

Sleep well.

Thu, 10/01/2009 - 20:12 | Link to Comment Anonymous
Thu, 10/01/2009 - 20:27 | Link to Comment Miles Kendig
Miles Kendig's picture

Hate to say it, but the fourth branch does a far better job of wielding the reigns of power and communications than any of the other three or their capo, GS.

Thu, 10/01/2009 - 21:34 | Link to Comment Anonymous
Fri, 10/02/2009 - 09:00 | Link to Comment bonddude
bonddude's picture

Late to the party? Really?

Not if you look at the US stock market. Up,up,up.

This guy has consistently managed some of the biggest money around and still

beats the market. There are WAY to many people on the inflation/gold trade.

That conclusion is way to early for an economy with a $12 Trillion hole hole in it.

In fact, I bet the market goes down all through the restocking period (3% Q3 GROWTH?).


Fri, 10/02/2009 - 08:44 | Link to Comment Anonymous
Fri, 10/02/2009 - 09:03 | Link to Comment bonddude
bonddude's picture

Steve Leisman "temporary workers" less bad. The "one good thing in a bad report" .

He looks scared.

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