Gaming the markets

Bill Gross, head of PIMCO (the largest bond fund), had a great run until a few years ago, when he started to underperform the Lehman Bond Index. His more recent bearishness cost his clients a lotta dough. He was a bond bull, riding the Greenspan easy money to billionaire-dom. But earlier this summer, he announced that he was bearish on bonds (i.e. he was positioned for interest rates to climb).

I'm not one to theorize in conspiracies much, but when I read this I had to wonder:

Get with it Mr. President and Mr. Treasury Secretary. This is your moment to one-up Barney Frank and the Democrats. Reestablish not the RFC or the RTC, but create an RMC – Reconstruction Mortgage Corporation. If not, make some modifications in the existing FHA program, long discarded as ineffective. Write some checks, bail ‘em out, prevent a destructive housing deflation that Ben Bernanke is unable to do. After all “W”, you’re “the Decider,” aren’t you?

See, if there is a fiscal (Treasury) rather than a monetary (Fed) response, then Bill will not take yet another punch in his bond funds, as interest rates would fall with a Fed cut.

Is it any wonder that he is asking Bush to bailout homeowners, in lieu of a Fed cut of interest rates? I'm not sure who's slimier, Gross or this guy: