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U.S. Must Buy Assets to Prevent `Tsunami,’ Gross Says
Jody Shenn
BLOOMBERG
Thursday, September 4, 2008
Sept. 4 (Bloomberg) — The U.S. government needs to start using more of its money to support markets to stem a burgeoning “financial tsunami,” according to Bill Gross, manager of the world’s biggest bond fund.
Banks, securities firms and hedge funds are dumping assets, driving down prices of bonds, real estate, stocks and commodities, Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., said in commentary posted on the firm’s Web site today. Since financial markets seized up a year ago as the subprime-mortgage market collapsed, the Standard & Poor’s 500 Index has fallen 13 percent and home prices are down more than 15 percent.
“Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami,” Gross said. “If we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury.”
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The government needs to replace private investors who either don’t have the money to buy new assets or have been burned by losses, Gross said. Pimco, sovereign wealth funds and central banks are growing reluctant to fund financial firms after losses on investments they made to support the companies, Gross said. The world’s biggest banks and brokers are retreating after more than $500 billion in writedowns and credit losses since the start of 2007 and have raised $364.4 billion in new capital.
Yields on investment-grade corporate bonds, debt backed by commercial mortgages as well as credit cards reached record highs last month relative to benchmark rates.
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9 Responses to “U.S. Must Buy Assets to Prevent `Tsunami,’ Gross Says”
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September 4th, 2008 at 11:17 am
… And I quote…
Gross said. “If we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury.”
…Smells like bullshit to me…
More government spending and intervention, that’s just what we need…NOT.
idiot
September 4th, 2008 at 2:31 pm
The U.S. government needs to start using more of its money to support markets to stem a burgeoning “financial tsunami,” according to Bill Gross, manager of the world’s biggest bond fund.
Another thief calling for some more blow back. He should known that Paulson’s Plunge Protection Team has been doing exactly that for many years now. They print yet more worthless paper federal notes (dollars) to buy up falling stock and thus prop up the financial indexes. They must do this secretly or otherwise people will notice what a scam and fraud the broke U.S. economy really is.
It is like watering down the soup. There arrives a moment when people will refuse to eat it anymore. The same with the unlimited printing of dollars. The real buying value of one dollar is probably more like one dollar cent.
September 4th, 2008 at 3:02 pm
from Mish’s Global Economic Analysis
http://globaleconomicanalysis.blogspot.com
“Bill gross is a shill. He runs a massive bond fund long MBS and agency paper. OF course he wants the treasury to open up the balance sheet. But the treasury balance sheet is subject to the generiosity of FCBs, namely China. See article in IHT today on china Central bank worrying over low yields in treasuries but unable to act as a result of dollar weakness. So PIMCO is basically saying the FCB don’t have an option. Also he fully ignores that the projected US tax receipts based on inflated growth expectations and lower cost structures still leaves the US with massive budget deficits years into the future, notwithstanding contingent liabilities. So the US is basically Chrysler with the China Central Bank as lender of last resort. A month ago or so PIMCO was calling for bulldozers to come out. Bill Gross comments should be used as the new implodometer. With every new word penned, the level of desperation gets ratched up. Check out the WFC and BBT issues just coming to market 8-9 handles. How exactly do you make money at these levels other than jamming down deposit rates lower?
September 4th, 2008 at 5:05 pm
Bill Gross is the grandaddy of the bond mutual fund managers. PIMCO manages the largest pile of bonds in the solar system. It is only too obvious why Gross wants the Feds to save PIMCO – and every other “too big to fail” Wall Street firm – from the consequences of their own greedy actions. Gross is usually a “voice of reason” in that group of Wall Street shills. But I think that the situation is so dire now that the very existence of PIMCO is threatened and Gross is not shy about calling for a bail-out. The problem with bailing out everyone and everything is that of “moral hazard”. Can’t fail? The Feds will bail us out! That’s an open invitation of the wildest speculation bar none. Once bailed-out how does Gross propose to keep these same rascals and thieves from robbing again? By giving them a “haircut”? Some haircut! They wind up making billions and they “fine” them a few million! What a joke! If financial collapse be our fate, then I say bring it on! The sooner the better. This will only hasten the revolution and increase the value of my gold and silver holdings.
September 4th, 2008 at 6:51 pm
Well said Uhlijohn.
“Financial Collapse? Bring it on.”
I second that motion.
September 5th, 2008 at 6:29 am
10 years ago many market pundits decried the federal reserve loose money policy and the proceeding tightening, one was Bill Gross. When Bill Gross speaks it’s the American economy talking.
already any penny minted before 1982 is worth 2 cents. commodities
look at pre-64 us coins and their melt values. google it. look at the value of our current coins. see how kennedy was going to protect you with silver backed currency ? now what is a dollar really worth ?
September 5th, 2008 at 7:34 am
Lend ‘n Spend
The new murikkkanomics…
September 5th, 2008 at 9:42 am
Open up the U.S. Treasury? There’s nothing in there but cobwebs and I.O.U.’s from Christ knows who. Let the house of cards fall, hang every goddamned Wall Street broker, International Investment banker, et al. Let ‘em swing then keep them up there till the buzzards have eaten their worthless livers.
September 5th, 2008 at 5:33 pm
- Sept. 4 (Bloomberg) — The U.S. government needs to start using more of its money to support markets to stem a burgeoning “financial tsunami,” according to Bill Gross, manager of the world’s biggest bond fund…
HA! Even Bill Gross, the manager of the world’s biggest bond fund hasn’t figured it out: the United States can’t “start using more of its money” because its OUT OF MONEY. There, now you know what most of the people who have to work for a living have known for years.
- Banks, securities firms and hedge funds are dumping assets, driving down prices of bonds, real estate, stocks and commodities, Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., said in commentary posted on the firm’s Web site today…
- Yeah, Mr. Gross AKA THE RETARD is a little late on this one also. Many people on planet earth figured out that a massive wealth redistribution was successfully being managed years ago. Oh wait, you weren’t talking to the “people” – those words were for your corporate investors. Sorry.
- “Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami,” Gross said. “If we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury.”…
Typical American corporate arrogance…without even a second thought, the very ones who helped the financial crisis evolve into the beast it is are now the ones proclaiming they can “prevent” its continuation by opening up another artery of free money courtesy American taxpayers.
- The government needs to replace private investors who either don’t have the money to buy new assets or have been burned by losses, Gross said…
Replace private investors? No, they should be shot, not replaced. These words just mean more government intervention and free bailouts when things sour further.
- Pimco, sovereign wealth funds and central banks are growing reluctant to fund financial firms after losses on investments they made to support the companies, Gross said. The world’s biggest banks and brokers are retreating after more than $500 billion in writedowns and credit losses since the start of 2007 and have raised $364.4 billion in new capital…
So basically in only a years time they managed to lose $500 billion and raise $364.4 billion which equates to 72.88% GET IN LINE YOU FUCKING SCUMBAGS. Have a talk with a real person who lives in the real world and they’d most likely shove a stick up your ass for complaining you only have roughly three quarters of your assets.