PIMCO's Total Return Fund had its most profitable single day ever the day the Fannie Mae/Freddie Mac bail-out was announced by Treasury Secretary Paulson. Mortgages owned by the fund surged in value after the Federal government extended its guarantee over the mortgage giants.
Bill Gross, CEO of PIMCO, indicated that he would buy more of the mortgages with the expectation that the government's guarantee would also make them more valuable. Just last week, Gross indicated that he would boycott buying any more of Fannie and Freddie's mortage paper unless the government stepped in and took over the two companies. He also called for the Federal government to do just that. Apparently, Mr. Gross sees the takeover of Fannie and Freddie as a green light to buy more of the securities now. Bill Gross is a billionaire and is one of the Forbes 400 wealthiest Americans, with a net worth of $1.37 billion. Now, thanks to America's taxpayers, he'll be worth much more!
This is proof that Wall Street is the chief beneficiary of the bail-out, not the American people. What a sad day for our Republic that a coal miner in Pennsylvania, a farmer in Minnesota, and a nurse in Seattle are forced to accept the debt obligations of huge corporations so that America's billionaires on Wall Street can make even more money at their expense. I believe this is nothing short of criminal!
