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Exercises In Supreme Hypocrisy: Bill Gross Edition
In a pathological example of nearly clinical hypocrisy, PIMCO's Bill Gross yesterday dedicated 4 meandering essay pages full of polemical ramblings to the characterization of America's sad political and financial hybrid reality. Yet the billionaire's saddest message is precisely the self-deluded aggrandizement that Gross decries yet willfully takes advantage of every single day. Because after bemoaning the fate of America's broken political system, and ridiculing the Federal Reserve's kleptocratic-friendly ways, it is precisely people like the PIMCO chairman that are most guilty of taking advantage of every single loophole presented to them, even as they criticize just this activity. This, beyond all the petty trivialities that Gross discusses, is precisely what is most wrong with America - at this point everyone, and especially Mr. Gross, knows too well that the wealth transfer from the middle class to the elite 1% of society will not end until such time as America itself defaults. Yet having the very people that benefit the most from this, write non-apologetic letters in which they criticize the very system that lets them walk home every day with an extra zero in their bank account simply due to their special connections within this very broken system, is beyond reproach.
Gross writes:
Our government doesn't work anymore, or perhaps more accurately, when it does, it works for special interests and not the American people... What amazes me most of all is that politicians can be bought so cheaply.
Well, Gross should know all about special interests and bribery. A casual check indicates that the PIMCO boss himself donated $6,900 to future present Barack Obama in 2008, and another $4,000 to the Democratic Senatorial Campaign committee. What was the IRR on that investment Mr. Gross? Just how many special Treasury JVs is PIMCO part of these days, and how much taxpayer money ends up in the Newport Beach bond manager daily, to simply trade side-by-side with the Federal Reserve and front-ru(i)n the broader investing public? Was Obama the cheapest politician you could buy?
We were so appalled with the result of this query that we decided against checking further back in time to see just what the price of bribery for prior presidents was. However, we did check how much of a "special interest" PIMCO itself is - to our (lack of) surprise, Mr. Gross, your company has spent at least $431,101 to curry favor with assorted representatives of the government in precisely the very action whose daily occurrence you lament. In the face of the below table, can you please tell the American public how they are supposed to take you seriously ever again?
At least Gross is not completely naive in his polemic, and realizes the irony of his own message:
If, in 2009, PIMCO recommended shaking hands with the government, we now ponder "which" government , and caution that the days of carefree check writing leading to debt issuance without limit or interest rate consequences may be numbered for all countries.
We are fairly confident that despite your concerns, when it comes to carefree check writing from the perspective of one of the nation's largest "special interests", you will have no problems in figuring out just "which" government you need to lubricate sufficiently in 2010 to guarantee your ongoing middle-class wealth transfer and unprecedented administrative bribery Internal Rate of Return.
Yet the epitome of hypocrisy comes from the following paragraph:
Here's the problem that the U.S. Fed's "exit" poses in simple English: Our fiscal 2009 deficit totaled nearly 12% of GDP and required over $1.5 trillion of new debt to finance it. The Chinese bought a little ($100 billion) of that, other sovereign wealth funds bought some more, but foreign investors as a group bought only 20% of the total - perhaps $300 billion or so. The balance over the past 12 months was substantially purchased by the Federal Reserve. Of course they purchased more 30-year Agency mortgages than Treasuries, but PIMCO and others sold them those mortgages...
We'll stop right there. And while first we want to thank you for paraphrasing almost verbatim Zero Hedge's primary concerns for 2010, we do have some questions. As you point out, PIMCO was all too happy to sell to the US taxpayer the extremely overvalued mortgages whose prices the actions of the Fed brought to a valuation grounded purely in Bernanke's money printer and nowhere in reality. As the chart below highlights, in 2009 your Total Return Fund sold $95 billion of MBS directly to US taxpayers at a price likely far above fair value, with America's citizens eating the difference, and PIMCO profiting handsomely. Since we are discussing what appears to be boundless hypocrisy, would you, Bill, be so kind to indicate just how much of a profit on these transactions you generated, and at what price did you sell these MBS to the Federal Reserve? Because we do find it very ironic of you on one hand to discuss the flaws in the Fed's monetary policy and lament the passing of 2009 generous extra liquidity environment, and on the other hand to make what are likely billions in profits courtesy of what can only be characterized as blatant wealth transfer.
That being said, we are fairly concerned how your $100 billion+ in government bonds will fare in the liquidity-checked environment you discuss. Is your letter merely a shot across the Fed's bow as a warning that the next QE should focus not so much on MBS but on Treasuries once again? Because it would appear to us that you stand to lose the most when the yield curve surges once all the things you prophesy come true.
Lastly, you say:
"Most "carry" trades in credit, duration and currency space may be at risk in the first half of 2010 as the markets readjust to the absence of their "sugar daddy." There's no tellin' where the money went? Not exactly."
You are absolutely right, the money went straight to the bottom line of money special interests such as yourself, which had appropriately goosed the administration apriori. But we can see why you may be nervous. With your fund clearly leaning in one political direction: the one which will likely be the biggest loser (to keep things in terms of trades) in 2010, and loaded to the gills with the securities which if you are correct, will be among the biggest losers in the coming 12 months, we can understand your exasperation. After all, it is unnerving when the heretofore guaranteed smooth sailing between the printer cartridges of the Federal Reserve appears like it may be coming to an end.
Yet if we may suggest something? You say:
The fact is that investors, much like national citizens, need to be vigilant and there has been a decided lack of vigilance in recent years from both camps in the U.S.
Again, we agree, and we vow to be just those "vigilant national citizens" who call you out for your investor letters filled to the brim with unmitigated hypocrisy. Because while your skin-deep polemics on the direction of the economy may sound like sincere concern to the portion of the population you lament has lost its vigilance, we are happy to point out the message between the lines.
Our advice - instead of continuing to write checks to the administration, and perpetuating the act you so despise, how about writing a check to the American people, whom you took for the proverbial ride in 2009? As you point out, Mr. Gross, the winds of change are starting to blow, and what is true in politics is usually true in finance as well. It may behoove you to supplicate the American middle-class while you still have a chance to do so voluntarily, rather than in a few years when you are forced to do so by a jury of your peers. But then again, that would be a very unhypocritical thing to do. Because while writing about it is easy, actually doing something about it is ever so much harder, isn't it Mr. Gross?
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Love It! You go TD. Bam! Knock Out punch with words! Time to Man-Up Billy!
It sounds like Bill Gross is secretly saying something along the lines of a startling plea for help I once overheard while working in a bank. A chronically overdrawn customer was once again sitting across the desk from customer service trying to work out the charges and over drafts. As I was passing by I heard the poor sap plead "Make me stop writing bad checks."
Sounds like Bill Gross doesn't like the party but will still eat and drink with the best of them until the adults arrive to pull the plug. Way to go Bill.
Great piece, except this is a much bigger problem than just Bill Gross. Yes, "every vote counts", but come on, be a realist here.
My anger and frustration does not stem from people like Blankfein, Paulson, and Gross, but instead the complacency of the american populace.
You want the height of hypocrisy, just look at voting statistics and what % of people wrote even a single letter to their elected representatives in the past year.
I'll agree that the average citizen is complacent but highly doubt that voting or letter writing is enough to produce the radical change that is needed.
Gimme a break Anonymous (one who will not be publicly counted). Ever hear of statistical sampling. If 100% of people voted, the end percentages would likely be identical.
You cannot get good results with a broken system. You get liars and criminals in congress and the administration because those are the only ones who can get there. The system needs to be fixed so that the people who attempt to cheat Americans are discovered and expelled from the process automatically, not rewarded and promoted.
First time posting here, so in case this shows up as Anonymous. I am FilmFlam.
Sorry to be a stickler, but Tyler, I think you misused the expression "beyond reproach" at the end of the first paragraph of your post.
"Beyond reproach" means someone's actions do not merit reproach or censure. In other words, their actions are good, if not saintly.
Bill Gross is far from that—you correctly pointed out what a hypocrite he is.
I think the expression you might have wanted to use is "beyond reprehensible"—which would indeed be an accurate description of Gross.
Sorry—don't want to be all nerdy-nerd, but well, I'm a nerdy-nerd about grammar and usage.
Cheers.
That caught me as well; it means so honorable as to be "above criticism". I might also suggest "beneath contempt" as a sub.
While we're on about semantics, you may also want to look into "paraphrase...almost verbatim". I'm not sure it means what you think it means. ;-)
In fairness to Gross, he is not hiding anything. He has been one of the few willing to call it as it is, and he has been dead right all along, while sharing with the public exactly what he planned to do. He told us all early on to follow the heavy hand of gov't and buy what it's buying, and he was right. Now he is saying sell as the USG is ending its buying, and he again appears to be right.
Gross never said that he didn't make political donations. Quite the contrary. He's a smart enough guy to know that all info in that regard is public.
Gross' monthly letters are some of the best reading out there.
That was not TD's point for Christ sake, if you bemoan the system, then change it, do not be a willing participant it is hypocrisy of the highest order.
Good God, get a clue.
No. If someone puts free cash on the table and says, "take it!", what's wrong with taking and, while taking, telling the person who put the money on the table that they're pretty dumb for just giving you the money? Maybe that's better than just taking it and not telling they dummy that they're being dumb. And if it's an issue of the tax payers, who arguably the money really belongs to, well I think we might also have the complacency of the tax payers to blame for putting up with such nonsense.
I'll take a hack at that by re-working your question a little.
If Tony Soprano puts free cash on the table (that he got by selling crack to ten year olds) and says, "take it", what's wrong with taking...?
The closer you find yourself to that scenario, the farther you are from the America where most of us live. Most people (maybe not Wall Street banker-people) would not take that money.
I'll accept your re-working of the question if one accepts that the American populace is the equivalent of 10 year olds.
Most people are the equivalent of 10 year olds when it comes to 1) following the herd, and 2) doing what feels good, and 3) breaking rules that are easy to break and that everyone else is breaking.
Those 3 points sum up the attitudes of most of the American electorate, Main Street operatives, and Wall Street playerz.
The government, via laws and regulations, is supposed to represent the "adult" in the room. But these days government and regulatory agencies are just as bad as the "kids", getting what they can get for themselves and their peeps back home, and screwing the other guy (esp future generations of other guys).
There is no "parenting" happening here. There is no way to recover from this situation.
Game over.
cougar
Ok, I'll hack back!.. Most people would take it.. What do you thing the earned income credit is, for goodness sake man. I know people who remain unmarried, have two children in the same house, and when they file separately, get thousands in earned income credit. That's their money from his work, and your money from your income, and my money too.
the system is broken - i don't blame him - get what you can while you can because the unwind is sending everyone back to 0
Not everyone - just us - the working class
Yup.
That's why it's called "theft". The ones getting it have no right to have it, but they have figured out a way to get it anyway and they are taking it while they can.
No different from figuring out how to jimmy open a door and force open a safe and take the contents.
Future generations will absolutely see it this way. I know my children will.
cougar
But in Amerika, legal precedents outweigh morals. Those who pursue life morally (sp?) will prosper less than those who follow "legal" doctrine.
'Tis a sad time, indeed
Speaking of hypocrisy, has that hypocritic bullshit artist Lloyd Blankfein and GS paid off the government backstopped FDIC TLGP 20+billion yet?
right.....these phucking guys are pieces of shit and irresponsible men.
Being a piece of shit or irresponsible are not violations of law.
However because they are peices of shit and irresponsible they may be violating securities laws or operating Ponzi schemes or laundering money.
In which case they are likely criminals. But that determination will fall to future generations, because the current generation has been cognitively captured by the lure of easy money.
cougar
No. Gross is doing nothing illegal or immoral. The source of the problem is not on the Bill Gross side of the trade. It is 100% awful government who provides ample opportunity for many to transact with them is ways that are stupid. That is the government's fault.
When in college (1980) I took out a student loan at 8% and put it in a money market at 16%. I did not need the money for college (scholarships took care of that). Why in the world is the government lending me money?? Because by definition, they are among the least brightest institution of the land.
So don't scream at Bill Gross or others who have figured this out. Gross is free to call the government out on this -- it is not "hypocritical." Gross was doing precisely what the government wanted him to do. So take ALL of your complaining to your elected official who was on the other side of this trade -- that is where the SOURCE of the problem lies.
Your comment was sufficiently eloquent that I can do little more than to say, "ditto". By contrast, most of the others commenting on this subject appear to be clueless. The government's created a huge mess here and to call someone immoral or a hypocrite for simultaneously stating that fact AND taking advantage of the opportunities it creates demonstrates the kind of ignorance that's put many of our elected officials in office.
This entire meltdown started as an unholy alliance of anti-regulation Republicans and "Let's let the poor buy houses they can't afford" Democrats. And to blame "greed" is equivalent to blaming gravity for a plane crash. Greed is an omnipresent fact of life. Government's job is to channel and control greed, allowing it to become an engine of social progress. They failed in this case...big time!
What all these comments illustrate best is, the need to always start analysis from fundamentals - assuming you are aware of what "fundamental" means, and why it is crucial.
To begin with, in fact (and in law), the government does not exist. That's simply a fact, for anyone who clearly understands the nature of reality and consciousness. Even fundamental law admits this, which is why it refers to organizations as "fictitious entities". Get it? You know, "fiction", as in "something that you have a mental unit to refer-to, but nothing exists to refer-to". Examples: SantaClaus, ToothFairy, YouGetThePictureNo?
Once we review the fundamentals of the current situations, the conclusion is simple. The country (another fiction, so let's just say "earth", which is not a fiction) has been taken over by predators.
Oh, why do I chose the term "predator"? Because I reckon that's the most fundamental distinction that separates "ethical/moral man" from "wild animals". Before humans learned to "create" AKA "produce", they were like all other animals - they simply grabbed and ate/consumed whatever they needed to life, or wanted "to enjoy". This is a fairly fundamental distinction, is it not? To be a creator/producer versus a destroyer/predator? After all, "to exist" is pretty fundamental, as opposed to "not exist"; sigh. Okay, how about "to be, or not to be - that is the question" (and the answer in this case)? Even the notion that "god" is the standard of "moral" is generally justified by the claim "he created the universe".
I hope that settles that. The distinction that most fundamentally separates what we consider "human/moral/ethical" from "animal/inhuman/immoral/unethical" is in fact "producer versus predator".
As an aside, albeit a very important one, the main tool of a "producer" is honesty. If you deceive yourself about the way reality works, you'll have one hell of a time successfully creating/producting anything of significance, and you're likely to blow yourself up trying too.
But a predator is typically dishonest. They hide behind the bushes to deceive their prey about the safety of the local environment - then they pounce and kill those deceived by their ruse. Is this not exactly what the modern predators do? You know, those folks we call the "powers-that-be"? Those who assign themselves utterly fictitious titles like "president", "congressman", "senator", "judge", etc?
Yup, the whole issue comes down to preditor/liar versus producer/thinker. Unfortunately (and amazingly to those of us you understand reality and consciousness), the predators seem utterly aware they and their institutions are total fabrications, and their game is pure fraud --- while the producers are naive fools who are utterly terrified to momentarily glimpse, much less clearly recognize the very game in which they are the prey.
Wow, what a world we live in. No?
i agree. it's like when people criticize soros for arguing to change the international currency regime from which he has immensely profited--and i'm not talking about his absurd copenhagen sdr proposal. you play the hand you're dealt, especially when you run big money
Your right, Bill is saying
1 We're fucking you
2 That's what we do
3 We do it better than anyone else
4 You should stop us. You really should. It would be good for the country.
5 Oh look over there a shiny thing.
Oh look over there a shiny thing.
LMFAO
Zero says:
by extension the above could be rephrased
Gross says:
could be rephrased
Zero Hedge who accuses Gross of supreme hypocisy is actually accusing those who have invested (directly or indirectly) with Pimco and/or their ilk with the same thing. If Gross is party to the corruption then so too are his enablers.
Next up from ZH, perhaps a discussion on the merits of so called ethical funds.
Rather than ridcule give Gross credit for calling it as he sees it even if he exploits it. The last time I looked he didn't sign his letter Saint William.
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2010/Let%E2%8...
Poisoned well water. Every nook and cranny of the system is so riddled with hypocrisy, fraud, outright lies that every act an economic player causes in the system is polluted with a legion of sins.
There are no clean hands, nor pure hearts in this economic realm anymore. Unless you're Amish, barter only, and have never held or exchanged a FRN. Willingly or unwillingly, we have all been pulled into a conspiratorial circle of iniquity.
In fact, the nation has ripened in it. And as the axe is laid at every root of every tree in warning, so those that bring forth bitter fruit are hewn down and cast into the fire.
This system is too far gone for any sort of redemption.
Dead on analysis of the hypocrisy of Mr. Gross. I am sick to death of all these "national experts"; Buffet included, that are compelled to share their insights while at the same time rape the system of all it has to offer up.
Give Bill a break. His article is spot on.
I don't blame him for selling MBS at an inflated price to the FED or the banks for doing the same. If the FED offered to overpay for my meager holdings, I would sell it to them.
The FED policy is to bail out bad loans. It's bad FED policy. Not bad PIMCO policy.
Of course his analysis is spot-on - the FED is playing from the score he and others like him have written. How could his ex post facto analysis be anything but?
The whining about how broken is our national political and financial systems on the other hand? Well, that just sort of rings more than a little hollow coming from a guy who helped break it, don't you think?
Agreed. This is a well worn script and I consider it PR and legacy polishing. I assume everyone notices that (when and if) the hand wringing comes, it shows up after the big checks have been kited and cashed. Then comes the worries over the immortal soul from the comfort of the multimillion dollar homes and offices.
"Oh dear, this isn't right. Someone must do something about it."
I'm reminded of Bill Clitton getting busted for campaign finance crookery and proclaiming how that really just underscored the need for significant campaign finance reform. And with a straight face too...
Thanks for the bad memory reminder. :>)
Funny how hypocrisy, greed and sloth are only called that when the plebs practice it. Otherwise it's wisdom gained from experience or the fruits of long hours and hard work.
I'm reminded of the old saying that it's derangement when you're poor, senility when you're middle class and eccentric when you're rich. Funny how money washes the vocabulary and soul.
Absolutely. It's only "greed" when the other guy does it. Funny how that works.
Why did he buy these MBS securities if not to gain on a moral hazard trade.
AndyC
Mr. Gross, welcome to the real court of public opinion. Your response sir?
If I were Gross I would respond after ZH decides it can respond to Goldman Sachs' rebuttal.
Insightful.
Fair point.
And so many get away with blaming the free market for our problems.
Let's hope those with the pitchforks round load the right people into the tumbrel.
Free market? LOLzers
Methinks you have focused your ire on the wrong dude. Bill Gross is not above reproach, but is nowhere near the top of the list of scum out there. Not even close. At least the guy is candid and open with his investors. Everyone that has gotten rich on the street is not a criminal. Love the site but somethimes I think you swerve a bit too far off the road.
Tyler, let's keep it simple. Gross is just talking up his book ... there are no more ethical limits when the Govt WANTS to blow you ...
sorry, being too cute
....the problem is communication, too much communication.....
Truth? You can't handle the truth.
So he steals money that's left out in the open and everybody defends him. What happened to ethics? Or even patriotism?
The Holy Dollar rules everybody's lives...that is the only allegiance we have anymore and that is why our country is coming apart.
Most of the gentlemenly folk have always believed in "every man for himself."
Why, how elese do you get to hang with the gentlemen?
oops
Gross is paid to protect peoples money. Here's my question. What would you have done?
People who believe that fairness and honesty run the world are not naive, they're deluded. Successive politician's since Herbert Walker Bush have sold this country up the river. It only became an issue when we collectively ran out of things to sell.
Now that the country is flat broke, everybody's a genius.
Gross is paid to protect peoples money. Here's my question. What would you have done?
If this missive is the result of a legitimate, conscience crisis within Mr. Gross (which in many ways it appears to be), the answer to your above question is: RETIRE A WEALTHY MAN AND CEASE AND DESIST WITH THE BEHAVIOR RESPONSIBLE FOR YOUR LAMENTATIONS!
"What would I have done?"
I never would have gotten myself in the situation... Instead of prostituting myself... and writing pathetic, adolescent, navel gazing drivel, I would have been doing exactly what I am, and Zerohedge IS DOING... that is: educating people about the evils of the world - not participating in them...
My question for you is: Do you pay Gross to steal for you? Do you condone that? A person who turns a blind eye when one man steals from another, as long as he and the thief benefits, is as bad as the theif, and maybe worse, because he deludes himself that he's not a criminal.
Gross's faux-populism is so....faux. Read nothing into it other than the warning at the end: if dot gov fails to pony up another $2 Trillion, watch out below.
Even that was less a warning and more a threat. "Give us $700B or the world comes to an end" is soooo yesterday's tactic.
Though it will probably work again. I think that is probably Roubini's recent epiphany; that the rules have changed, fundamentals are out the window, democratic process is dead, and we're now bound to flush good money after the bad money either forever or until there is no good money left, whichever comes first.
cougar
Agreed.
He is just pointing out to folks that our government is really stupid. I don't really care if his concern is real or faux -- his point is clear and valid.
I don't know, it kind of reads like a typical white middle-aged male businessman who is having problems with his God, realizes that Geithner is a 48 year old government mule, Bernanke is a psychotic wanna be, and Obama is a type of cookie that goes well with milk.
the least of his worries are the problems with his God. Best have his plan B polished off for when the roaming hoards take to the street.
The much hoped for street justice isn't going to happen. There are some good football games on this weekend and the new season of American Idol starts soon.
You can start looking for roaming hordes in about 2035.
I don't know if I want to hug the man for being so brazenly honest or spit on him.
You can do both, but only in that order.
As I recall, two years ago Gross was pounding the table for interest rate cuts to save America.
As I further recall, as rates drop bond prices rise, and Gross/Pimco holds a mountain of bonds long.
So he created a bond bubble, is selling at the top and calling now for rate hikes!??!
I guess that way he can lather, rinse, repeat.
End the fucking Fed.
Gross should realize that his neighborhood will be ground zero for the upcoming shitstorm that him and his ilk are seeding. In the not too distant future S. Cal will become extremely inhospitable for pale face money men.
PIMPCO
more than honest (or dishonest) in action, Mr. Gross' actions are coherent with his incentives, maybe he's intellecutally honest in that sense...mah...
Gross also has a mountain of cash - are you now going to say that he is a hypocrite for him selling his MBS'es and putting those assets into what y'all term the 'worthless counterfeit fiat dollar'?
And now he is calling for some sort of political sanity which makes him a hypocrite?
Funny, maybe in order to gain approval of this site Gross should substitute some vulgarity, snarky comments, armageddon scenarios, some baseless posturing, and a not even veiled sell of Gold?
At least Gross posts his archives, go back and read them, you might learn something about how this world actually works. Assuming you can somehow get off your knees and remove your lips from Rosie's thigh.
TD, your ramblings are exactly the point here. Such prostitutes are the pimps, running this show …
Looking fwd 2 your ramblings on lil` NY Fedster instructing AIG to disclose diddley before taking over the whole lil` treasury …
his most recent purchase from the U.S. Treasury, Neil CashCarry, insures Gross more insider dope. Maybe the folks at Gsax have convinced him he's also doing "God's work," and personality flukes such as hypocrisy matter little to the appointed.
TD, after having read this (http://www.zerohedge.com/content/zero-hedge-conflictsfull-disclosure-policy), exactly how much of disclosure can ZeroHedge demand of Gross without being hypocritical yourselves? Having said that, superb article.
I wonder what the response to Bill's letter would have been, had it been unsigned.
You know, 'its about the message, not the messenger', kind of thing.
The letter is his conscience talking...there's a syndrome or some kind of psych tell that I can't remember the name of about how sociopaths will frequently kind of crusade against their own behavior. Some kind of internal dissonance in play.
If Gross feels that strongly about all this, he should RETIRE. As it is, he's the equivalent of a mafia don opining to the rest of the family about how godawfully bad the rackets are for the greater society.
It's interesting you say this because a common denominator with sociopaths/psychopaths is their huge ego and their need to proclaim to the world what they've done.
Often it's disguised as a confessional because it allows them to continue to operate in the world, as opposed to blatantly screaming "I screwed every last one of you real good" and then suffering the slings and arrows that sort of proclamation would bring their way.
In a sad sick way, by making it a confessional, they actually garner sympathy and empathy from the very same people they screwed unmercilessly. Part of the evil that must express itself openly and unrepentantly.
[Part of the evil]
Or just part of the GAME.
You gotta wonder if da boyz take ANY of this seriously. It's all a big sandbox when you have that kind of power.
cougar
One possible (my fantasy) scenario:
Bill knows the only way to fix the current system is post catastrophic meltdown. If we just crash the system slowly we're the boiling frog. If we gun the engine till the wings fall off, then push it a little more and bury it in the ground we get a pseudo-revolution / back to basics constitutional realignment. The people take back government, by hook or by crook, and the Dodd's and Barney Frank's are tried for Treason.
In all reality though, the thing I fear most is that this doesn't have a clear defining meltdown, and we get a very slow emergency. That wouldn't raise the ire of the people. We'll all move to Switzerland, South America or Asia, or we'll rot and die.
[The people take back government]
Unfortunately the scenario you outline is almost certain to result in American-flavored Fascism.
And yes indeed, PIMCO and the rest of the oligarchs would like that a lot.
cougar
Measure not men by Sundays, without regarding what they do all the week after.
Gross sold his soul long ago and is simply a whiny-ass player of the system. During the crisis he publicly talked his book like a real pro. I used to respect him and PIMCO but no more.
After reading PIMCO's letter, this is by far the best post ever by TD!! BRAVO!!!
to benefit from a system one disagrees with is rational.
Will it be rational for you to pay higher taxes in the future? Will you pay mine? That's rational
No it isn't. It is self-mockery.
Your wrong here Tyler. Bill Gross has told everyone from the beginning (if you have listened to him) that his firm was set to make a killing on the "Uncle Ben" trade. I think he knows more than most where the Fed is heading and he may well be giving all of us a nod as to where things are headed.
He also appears to be a person who does care about America and its future. My guess is that it has become even clearer to him as to how our Nation operates politically and he appears to be appalled by what he knows.
As far as his wealth is concerned, WAY TO GO BILL!
His wealth is not the measure of a man. It hardly measures anything. But his wealth will certainly corrupt him. And then yes, the scope of his corruption is the measure of a man.
cougar
Guess you are saying you are not "wealthy" and therefore not corruptible?? Nonsense.
However, by world standards, most Americans are very wealthy......
RSD - Agreed. +100
RSD +101
Gross selling MBS and buying German bunds is the lance at the leading edge of the war on America's fiscal recklessness. He is raising a red flag on Washington DC.
The sum PIMCO spent on lobbying is a rounding error for most lobbyists--millions on a single issue (like health care) and billions overall.
Moreover, it didn't cram $95 billion in CMBS bond fund sales down anyone's throat. Just because it's "likely" above your assessment of their fair value doesn't mean that it is.
To the limited extent PIMCO lobbied Washington or offered CMBS bonds, it almost certainly has done so within the framework of our highly convoluted and profitable (for pols) laws governing lobbying and securities disclosure.
Indeed, among those with a vested interest in Washington's policy decisions, PIMCO has been admirably restrained. Moreover, it hasn't deliberately misled any of its investors so far as I am aware. To accuse if of hypocrisy when its playing with the cards it has been dealt is, well, a little hypocritical.
Disclosure: I have NO investments with PIMCO nor does anyone I know.
[playing with the cards it has been dealt]
He's been stacking the deck in his favor, and after the deal then playing the cards he is dealt, then after he cashes his chips goes to church and confesses to that form of sin, then stands before the congregation to denounce that sort of dealing, then after church heads back to the card room for another round of the same.
Did I miss anything?
cougar
a cold, shriveled death to naked shorts:
http://dcist.com/2010/01/secret_service_apprehend_naked_jogg.php
Hey Gross it sucks when you aren't the only bidder.
It sucks when you think you've bought someone and later find out they sold to someone else too for so far less it was insulting!
Oh its terrible ain't it!
Wife's 401k is largely in PTRF . So isn't Bill wriring a check back to the middle class?
Wow - you give new meaning to the word "retarded".
"...if you bemoan the system, then change it, do not be a willing participant it is hypocrisy of the highest order."
He can "bemoan" all he wants to as a private citizen. His job is to make and/or save me a load of money, which he has done very well, thank you very much.
You want to talk about real hypocrisy? Let's talk about Warren Buffet. Willing participant, indeed! Now if we're not going to call out that guy, then leave Bill Gross the hell alone!
Nuremberg Defense
Okay, fine! Next week we roast Warrren. Happy?
TD you are my hero.
silly rant about Gross ......... what do you expect him to do ? screw his investors and do things that would hurt his performance / PIMCO ? having watched Gross for over 20 years , he simply does what i would demand he do if i had billions in PIMCO : talk my book and say / do anything that works for my fund's positions .
Gross is not some retiree managing his own loot . He can no more tell you what he really thinks than a typical CEO will tell you what he's really thinking about his company's prospects . Both have to push the agenda they were hired by investors to push . maximize returns .
The real story with Gross is he is getting whacked by market events . He exited GSE mbs at much cheaper levels certain that by now they would be getting destroyed as we approached the end of Fed buying and that has not played out well as GSE mbs at tightest levels in history and Gross is short against his bogies in the best performer .
I bet you'd be one of those guards at the concentration camp who argued at Nuremberg that you were "just following orders." No, it's not a ridiculous analogy.
Poignant to see that this financial episode has brought a heightened sense of right/wrong to every participant. Regardless of belief system, all must acknowledge a basis of good/evil in the society.
The more a cycle of virtue prevails, the greater ease, comfort, and joy the participants realize.
The contrary, though, leaves all players benighted and morose of action. Piles of gold, and all the pretty ribbons in the world will never compensate for the knowledge that your children and grandchildren will have no opportunity but certain slavery. And that we, guardians, failed to bestow upon them the rights, privileges, and freedoms we enjoyed...and destroyed.
Agreed.
Gross is doing precisely what the government you all elected wants him to do. If you don't like it, why did you vote for the folks in DC?
None of this is surprising in any way, as history shows us. Everyone, EVERYONE, acts in their own best interests. The challenge is in understanding where their interests lie and the rest becomes obvious and clear. It is not about doing what is right. It is about doing what is in one's best interest. At some point, it does not matter how many chips you have amassed if the society that gives value to those chips is about to disappear. Interests change - so too does the way people will then act. Follow the money is only part of it. Follow the self-interest is the key.
If I may expand on your thought, of course everyone acts in their own best interest. It could also be called survival. IMHO the real question is, how far beyond your basic needs will you take the pursuit of your self interest.
I've been looking at this question for a long time and once I clear away all the distractions, where I see commonality in those that take their self interest far beyond their basic needs is their view that their current existence, the "here and now" is all there is and thus you play this "game" as hard as you can until you can no longer. That is of course an over simplification but I think you get my point.
There is a large pool of people who don't worry about their own self interest much beyond their basic needs. Instead, much of their life is spent giving to others, such as social workers, volunteers for non profits and of course the vast majority of the men and women toiling away in the religious orders (Mother Teresa as the shining example) whatever sect or belief they might have.
The common denominator for these people is that they believe their time in the "here and now" is just a small part of their overall existence (their soul or conciousness is immortal) and thus the drive for more than you basic needs is immaterial and often self destructive. In my view, and setting any particular religious view aside, we are talking about people who choose to pursue a higher level of consciousness.
It's then interesting to find so many people who initially pursued great material wealth and power begin to give it away in an effort to repair the damage they begin to realise they have done to their (and others) consciousness.
I worked for a short time as a non profit fund raiser and I was trained to appeal to this side of people, to their desire to "make it right" with the God of their choice. For those who had no interest in this path, I was to appeal to their sense of legacy. Either way, I found it distasteful and didn't last long in the field. But again you get my point.
I read a book about Mother Teresa some years ago where she was quoted as saying, in response to a question about why she didn't pursue who own self interest (not the exact word used but similar) she replied that helping others WAS in her self interest. Clearly a better person than I.
Hence your well-expressed point and mine are the same (based on the last paragraph). Well done and Cheers!
good post - thanks.
Interesting thesis.
I am a person who does the right thing because it is the right thing to do. Period.
My self interest in these things is that I can look myself in the mirror and say, You did the right thing cat.
It matters a lot to me that I can say that. It would haunt me if I could not say that. The pain would be real.
That is what Mother Teresa meant.
Does not make her or I better than anyone else. Just more at peace, perhaps. For those engaged in the suffering of the world inner peace is a soul-preserving refuge. And there is no higher self-interest than the preservation of one's soul.
cougar
Love the leftist sentiment that Profit = Evil and Non-Profit = Good. There are great profit seeking people and there are evil self-centered non-profit people. Your simple categorizations of people based on sucess at wealth accumulation is......simple. Wow.
Hoping you have given away all your assets down to world average levels to demonstrate you sincerely feel the way you do.
Mother Teresa demonstrated 3 characteristics she shared with other moral exemplars:
-Certainty - referring to the exemplar's clarity about what he/she believes to be right, as well as personal responsibility to act accordingly
-Positivity - referring to the exemplar's optimistic approach to life and extraordinary pleasure he/she takes in his/her work,
-Unity of self and moral goals - referring to the integration of the examplar's moral stance with his/her conception of his/her identity (the resonance of their personal and moral goals.
So, yes she was guided by her self interest, which was her belief in her interconnectedness to others or morality, if you will.
"Unintended Confessional," by Bill Gross
agree COMPLETELY with Orly on Buffet being a better one to target . Especially with the way the US media plays him as some sort of kind and generous Daddy Warbucks .
That hypocrite pays almost nothing in taxes because he can afford to live like a king off his muni bond interest tax free all the while he calls for Dear leader to raise taxes.
And listen to Buffet pusdh for high estate taxes ....even after he has set up his own estate to flow to Bill Gate's trust completely tax free after he dies .
He is the absolutely worst . Hard money lender during the crisis extracting terms nobody would ever get from GE and GS because they would have the 'Warren Seal of Approval "
agree COMPLETELY with Orly on Buffet being a better one to target . Especially with the way the US media plays him as some sort of kind and generous Daddy Warbucks .
That hypocrite pays almost nothing in taxes because he can afford to live like a king off his muni bond interest tax free all the while he calls for Dear leader to raise taxes.
And listen to Buffet pusdh for high estate taxes ....even after he has set up his own estate to flow to Bill Gate's trust completely tax free after he dies .
He is the absolutely worst . Hard money lender during the crisis extracting terms nobody would ever get from GE and GS because they would have the 'Warren Seal of Approval "
They don't call it PIMPco for nothing.
So enough of the arguing - Is Bill telling us now that things will start going to the crapper again unless BB promises more MBS purchases ? Maybe its good to ride with Bill UNTIL BB switches tracks ?? What do you guys think ??
Every 10 year old knows that things will start going to the crapper again unless BB promises more MBS purchases.
March will be an interesting month.
cougar
I hate Bill Gross. I'm using the word "hate" here.
"if I catch my opponents ever sleeping, I'll just slaughter them where they lie."
http://www.youtube.com/watch?v=UKcZ08yV_-A
I would guess that 80% or more of the people here make their money on the grid....therefore are part of a system of exploitation in some way.
Drink coffee yet today? Wear clothes made in sweatshops? And on and on for all of us. There are no noble blue natives in tune with nature except in the movies
How one makes their money and does their job has nothing to do with their political views or degree of social concern....even when there are more zero's at the end of their balances than most?
Agree 100%...we all have blood all over us.
Watch Sin Nombre or Cidade de Deus. This is the reality of lives elsewhere, but we all picked better wombs than they.
I really don't know what can be done about it, to be honest with you. Nobody seems to accept real solutions. I was in the parking garage having a smoke and the people are talking about $53k BMWs they want to buy and all of that...I mean, is it a good time to be spending that kind of dough on a car? Should one do such a thing? But, what are you going to do? Reality or truth alienate people.
Very true. And that is a sin against nature and self. The road to salvation when one is awash in sins of these kinds is something like this:
1) recognize the sin for what it is
2) condemn it roundly and in no uncertain terms
3) part with it forever
4) GOTO 1
And no, it never stops.
Eventually by degress the human condition is less sinful and nature will stop trying so hard to kill us.
I don't know if we then turn blue and iridescent and feline. But I would really like that. The mere thought is an incentive.
cougar
TD, enjoyed your polemic, but the only really interesting part was included in your conclusion:
This seems to be at conflict with your opening statement which opines:
In short, you can't have it both ways. If we still have a functioning society which provides avenues for legal redress, then by definition, the banksters will have "gotten away with it".
As a person somewhat knowledgeable about history, business, finance & economics, it is hard to reach any other conclusion that the current chapter of the American experience is nearing an end. The only real question at this point is will it be the French version or the (fairly) recent USSR experience?
I rather prefer the Soviet model where they enjoyed a relatively peaceful slow implosion, rather than what the French experienced with an enraged explosion of popular sentiment. However, I guess the main point is that in either scenario, a jury of one's peers was awfully hard to come by.
In some cases the USSR gambit is more dangerous, for the simple fact that once troops (and body guards - cough - Xe) cannot be paid, there tends to be a flood of arms on the market as they attempt to scare up cash. It's one thing to have an angry mob armed with small arms; quite another to be dealing former agents equipped with some pretty interesting "warez".
You've got it all wrong. Gross is being straight with us, "do what the government is doing", that was good advice. He is also tells you what his firm is doing, (did Goldman tell you they were shorting MBS, does Goldman tell you anything?) Secondly this is a bond fund, it's not like they're gaming the system, through software trading platforms, at the expense of your 401K.
But it raises an interesting problem and that would be, just how forthright should the government be while conducting its business, to prevent speculators from gaming their policy moves? Gross is honest, I don't expect him to be a martyr, and I have a strong feeling that some day soon, he will be Fed Chief, or perhaps Treasury Secretary, although I propose that Hillary Clinton will get the job, after Obama realizes he can't pander to Wall Street AND keep the Democrats in control of the Congress.
The reasons for Gross are pretty easy. The era of stocks, and the stock market is over. Once the investor demographic looks at their returns 2010, they will go into bonds for the duration, and that will mark a seismic shift in investment strategy, from stocks to bonds. for decades at least. Since few investors understand bonds, it's going to be tough for us personally, but Gross is the guy to lead us when the shift happens. Personally I put him way ahead of either Greenspan or Bernanke in terms of transparency, and being a bond guy he will be concerned directly about the savers in this country. How about poll about most trusted leaders in the financial industry?
Gross (in passing), Kashkari & Geithner......
@govTwits Daily Highlights
http://outsidethe-cardboard-box.tumblr.com/post/320504177/govtwits-daily-highlights
You put into words the exact sentiment that I had when I read this last night. PIMCO made out like bandits (literally) in this whole QE, not to mention in the bailout of bondholders of GSEs among others.
But 2010 being an election year, I think its quite likely that any exit plan the Fed is making will be cut short when the market rolls over. Or more likely, we'll get more "stimulus" from Congress
The twisted aspect to this story is that Gross may not be a hypocrite in the strict sense of the term. Thanks to the shareholder-rights movement, Mr. Gross might be held liable if he seriously follows through on his bemoanings except through retirement.
But I don't want to spoil the party, so I'll pretend to be Bill Gross:
"Follow through on my musings? Dear God, the unitholders all-but have my most private parts in the proverbial vise! From where do you get that quaint notion that I am in charge?
"The unitholders made me do it!"
["The unitholders made me do it!"]
When someone accused of a crime says "The devil made me do it!" we rightly point out the primacy of free will. The law and courts are based on nothing less. Otherwise appeals to the devil would prevail and there would be no possible justice.
In the case where one is truly in thrall to an exterior evil ... well then for what price was your soul sold into chattel? And what did the rest of us get in the bargain other than your thieving and your excuse that the devil made you do it?
cougar
Fuck Bill Gross, I always wondered why Bill and PIMCO has this clean image while GS takes all the heat. As FOFOA says, Bill Grosses profit can be gauged by turning the federal funds rate chart upside down. I hope they lose their asses in the next 10 years.
Amen. Great post. It's pathological with these guys.
The leaders on Wall Street know the bullcrap that has been going on before and after the collapse, but they're all convinced they weren't involved in any way.
Note that some 85% of bank execs are still there. "Yeah it's a damn shame what happened. What? No, not me. I didn't have any idea what was going on."
I wonder just how many of the commentors actually read the Gross letter. My take: Invest in German bonds like PIMPCO and we'll all be well in 2010.
As for TD's analysis: It is hypocrisy to rant from your high horse while doing what you rant against. Points made, and well. Thanks TD.
Maybe I have my ethics messed up, but it seems much better to exploit a loophole while simultaneously calling for it to be closed than to exploit a loophole and send money to politicians to keep it open. Maybe Bill is doing both by sending money to the Obama administration, but $6,900 when we're talking about billions hardly seems like he's "Buying" politics.
Yes your ethics are messed up.
Loopholes are there to subvert the will of the people. Also, one does not steal candy from children, or lie to one's mother, or abuse small animals.
Anything else I can clear up? ;)
cougar
Guess Kashkari can come out of his Cabin in the Sierra Nevadas he has since found himself at Pimco. Jeremiah Johnson he is not.
Virgil:
It's "Cash-Carry", not "Kashkari"
Instead of blaming PIMCO you should blame the FED and the Treasury for allowing them to unload their crap on the taxpayers. The Treasury should be working in the interest of the people and the FED should be working towards the stabilization of the economy;whereas, PIMCO is in business to make money.
Here's another idea: Blame them all.
One hangs all hang, sez I.
cougar
This is a useless discussion on assignment of blame, ie. blaming the system vs. its participants. The current system, a Democratic Republic, is what is in place. Either vote for change within the parameters of the current system or change the system. Good luck with changing the system.
The participants are all acting in their own self interest. Arguing the rich should repay the middle class is the cry of individuals in the middle class acting on their own self interest.
A Utopian system has yet to be realized and I doubt any of us will live long enough to see one. You have to get what you can while you can and use your talents to your advantage in doing so. God Bless America!
This discussion is not useless. Your comment was.
It's not a Utopian system we're desiring. It's a just system that observes existing laws.
You are dangerously deluded by greed and situational ethics. Get thee to a monastery or a convent, according to your qualifications. Steer clear of all forms of earthly power if you are not already hopelessly corrupted. That is my advice.
cougar
This is a useless discussion on assignment of blame, ie. blaming the system vs. its participants. The current system, a Democratic Republic, is what is in place. Either vote for change within the parameters of the current system or change the system. Good luck with changing the system.
The participants are all acting in their own self interest. Arguing the rich should repay the middle class is the cry of individuals in the middle class acting on their own self interest.
A Utopian system has yet to be realized and I doubt any of us will live long enough to see one. You have to get what you can while you can and use your talents to your advantage in doing so. God Bless America!
I've always been curious as to why the PIMCO gang never had to disclose their positions when dispensing advise in the various media. It always seemed (to me, at least) self-serving.
Sorry Folks - I have to jump in here.
Before we castigate Bill Gross for his "misdeeds", less take a look at what he and PIMCO actually do.
They are one of the world's largest investment houses specializing in fixed income - which, despite your preferences, does include dealing in Treasuries and other issues (Agencies, etc.).
He is being more than fair and open with his investors and everyone else by going public with his concerns, which might be summarily stated that the MORAL HAZARD in our financial markets is creating very serious ethical conflicts for him.
With respect to his dealings in Treasuries and Agency MBS's, if Bubble Ben and his Merry Men offer him the opportunity to cash out handsomely on behalf of his clients, well, if I were a PIMCO investor, that is what I expect him to do.
That's what I pay him for. If he has moral qualms about that, that's his problem, not mine.
And on his "political contributions", if he's not paying off the thieves and charlatans who represent us in Congress, then I'm not going to invest with him because he's not doing what is necessary to protect my interests as an investor.
And as for recognizing that the "markets" (I mean the casinos) represent nothing so much as moral hazard as far as the eye can see I think I and almost everyone else here couldn't agree with him more.
And, I think that ethically, he's in nowhere near the same league as the slimeballs Lloyd The BlankArchFiend, Angelo Mozillo, Chris Dodd, or that aging drag queen Bawney Fwank.
I have no doubt that someday soon, all of the above will get a taste of "People's Justice" a la France 1789.
KptLt. laughing swordfish
9er Unterseeboote Flotille
[That's what I pay him for. If he has moral qualms about that, that's his problem, not mine.]
You probably don't realize it, but you just cast all "anonymous investors" as degenerate amoral swine.
Well played. Paying someone else to financially (least of all literally) rape the weak on your behalf is ... well let's just say fraught with all kinds problems.
Far better to have no black-ops investments at all. Invest locally, or invest in your mattress.
cougar
Coug:
Excuse me, I forgot to mention, I am not a PIMCO investor.
But that's only b/c fixed income is a small part of my portfolio and I'm happy with the guy I got (Gabelli).
The balance of my portfolio is 40% stocks of companies I know something about (from my DOD days), 40% PHYSICAL GOLD, and 15% is in my trading account with which I supplement my income reasonably well.
The point here is that I am not "paying someone to rape the weak on my behalf".
I'm doing it myself by making my own investment decisions and being willing to accept the results be they good or bad.
Oh and BTW I'm one of those gubmint pensioners (Navy E-8) so many of you guys complain about.
Regards,
KptLt. laughing swordfish
9er Unterseeboote Flotille
Have to agree. A good example are the athletes in the Olympics. They are forced to use steroids and other muscle enhancing drugs to be competitive. If you are the only one not taking them you are sure to have a disappointing performance compared to the other athletes that are. What reward is there for being honest and having integrity when the playing field isn't level. Do you blame the athletes or the system? To level the playing field isn't impossible but highly unlikely. I could see the athletes not liking their situation and maybe complaining about it, but still using the drugs to be competitive.
Bill Gross should heed the following words:
Happiness is when what you think, what you say, and what you do are in harmony. - Mahatma Ghandi
Gross is saying "stop me before I kill again."
There's just never a bell tower around when you need one.
First of all, you bitch him out for playing the game and playing it well. A clear case of player hating.
Unfortunately I read this too late or I would have been SO FUCKING QUICK TO POINT OUT YOUR HYPOCRISY -
the balance over the past 12 months was substantially purchased by the Federal Reserve. Of course they purchased more 30-year Agency mortgages than Treasuries, but PIMCO and others sold them those mortgages...We'll stop right there.
Why did you stop? Well let me finish it for you TD, MS and whoever the hell you are because you have clearly become biased. I was concerned when you were out looking for money, those who need or want money can be bought out. Clearly you have.
The sentence finishes...
the balance over the past 12 months was substantially purchased by the Federal Reserve. Of course they purchased more 30-year Agency mortgages than Treasuries, but PIMCO and others sold them those mortgages and bought – you guessed it – Treasuries with the proceeds.
Stop right there indeed.
I have now lost all respect for Zero Hedge in what has become a clearly biased campaign that is apparently funded by some banking interest, which one, I don't know. But the truth is, I no longer care.
I'll be around to make sure to report the other half of the truths you spread. I'm sure I'll be banned, but fortunately you're not moderating items yet and I can become Anonymous. Time for me to start rotating my ip address.
You're not Tyler Durden anymore, you're Anonymous. And that breaks my heart.
phaesed
I am pretty sure that Tyler can defend himself, but your post sucks to high heaven, and what are your points other than "nuh-uh". The old "neiner-neiner" defense.
""""""""""""""
"I was concerned when you were out looking for money, those who need or want money can be bought out. Clearly you have."
I guess with baseless accusations so can you then. Many lurkers like you here on Zerohedge are the pissed off people whom are getting caught with pants down and dinger in the cookie jars.
Sorry chumply, but this site has saved me lots of losses, and most all of their even outrageous concepts are backed up with data, data that is referenced.
Take for instance ZH breaking the BLS lies. Did you notice the market does not take the UI numbers coming from the Bureau of Lies seriously anymore, picked up by Yahoo, and other news services and Finvis.
How about the Geitner emails??? You sound like a "connected treasury wonk" or SEC regulator that can't get shit taken care of. That story went viral and it is backed up with Geitner's own words.
I am putting this information together and a request for a RICO Investigation will be tendered sometime in the next 2 weeks to the FBI, for Paulsen and his corruption, and collusion with Bernake and Geitner for manipulating the markets in an intentional racketeering scam. Addto that a concerted effort by the DOL Sec. Solis for fudging the numbers of the BLS to make the market look like it was going well.
You fit the pieces together and this is the biggest scandal in the United States History.
So go fuck yourself and the rest of you pukes.
You will soon be in a room with all your consorts and co-conspirators and there will be one man asking you all questions, and outside that building all your cars will be under survillance, and the man in the room will close his portfolio and explain to all of you:
"Either you are are going to federal prison, or some of you are. You are now going to decide who is going."
That is when the floor will hit you pricks in the face.
There are areas of government and law enforcement that still has the ethics and standards to "do the right thing".
Some of those steps have already been taken by groups all across this nation, and reporting on those in power.
Some of your communications are mot probably already bugged for at least a month, and your assets and email watched as well.
This "+big government" control is a double edge sword.
The left hand often times does not know what the right hand is doing.
Sometimes they are actually cutting off the others foot, unknowingly.