OMG!!! … Bill Gross: Bush needs to rescue homeowners

[hipmatt]

http://biz.yahoo.com/cnnm/070823/082307_gross_homeowners.html?.v=1

Famed bond fund manager Bill Gross said the White House should bail out the millions of American homeowners who face the dreaded prospect of foreclosure this year.

“If we can bail out Chrysler, why can’t we support the American homeowner?” Gross wrote in his monthly investment outlook on PIMCO’s Web site.

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With nearly 2 million homeowners at risk of losing their homes this year and with housing prices rapidly receding, Gross said President Bush, not the Federal Reserve, is the best hope for “almost homeless homeowners.”

“This rescue, which admittedly might bail out speculators who deserve much worse, would support millions of hard-working Americans whose recent hours have become ones of frantic desperation,” said Gross, a founder of the fixed-income investment firm PIMCO and a columnist for Fortune.

“Write some checks, bail ’em out, prevent a destructive housing deflation that (Fed Chairman) Ben Bernanke is unable to do. After all ‘W’, you’re ‘the Decider,’ aren’t you?” Gross wrote.

Many have called on the Federal Reserve for help with the worsening state of the housing market, including cutting short-term interest rates. While the central bank has been reluctant to do so, Gross warned that such a move would not necessarily guarantee that adjustable-rate mortgages would not keep climbing or that mortgage lenders would relax their lending standards.

More and more troubling news has emerged from the already battered housing market recently as foreclosures nearly doubled during the month of July from last year, RealtyTrac reported earlier this week.

Home prices have also been hard hit recently, falling 1.5 percent during the second quarter, according to the National Association of Realtors. While falling home prices “might be healthy”, the decline could represent an asset depreciation not seen since the Great Depression, warned Gross.

The bond manager noted a homeowner bailout wouldn’t be the first time the U.S. government has come to the rescue when the economy has faced a crisis.

In the 1990s, the government rescued the savings and loan industry by absorbing its bad debt and late in that decade the Federal Reserve stepped in to restore calm after the collapse of a hedge fund, Long Term Capital Management.

Gross made a handful of policy recommendations for the White House, including creating an agency to coordinate bailouts or aid for homeowners and making adjustments in the government’s Federal Housing Authority program.

He argued that action by the White House would not only help homeowners who might lose their home. Wall Street, which created, marketed and invested in complex securities backed by subprime mortgages over the years, could benefit as well.

“Your stocks and risk-oriented levered investments will spring to life like the wild flowers in Death Valley after a flash flood,” Gross wrote.

[Anonymous]

He argued that action by the White House would not only help homeowners who might lose their home. Wall Street, which created, marketed and invested in complex securities backed by subprime mortgages over the years, could benefit as well.

“Your stocks and risk-oriented levered investments will spring to life like the wild flowers in Death Valley after a flash flood,” Gross wrote.

Aha – there is the real reason why he wants this. It would be the indirect bailout to over-levered investors.

Write some checks, bail ’em out, prevent a destructive housing deflation

Cool, just so long as they write checks to all the savers out there as well…you know, maybe a 20-40% of the cost of a house check that will cover what the prices should have fallen to.

[Anonymous]

He argued that action by the White House would not only help homeowners who might lose their home. Wall Street, which created, marketed and invested in complex securities backed by subprime mortgages over the years, could benefit as well.

“Your stocks and risk-oriented levered investments will spring to life like the wild flowers in Death Valley after a flash flood,” Gross wrote.

Aha – there is the real reason why he wants this. It would be the indirect bailout to over-levered investors.

Write some checks, bail ’em out, prevent a destructive housing deflation

Cool, just so long as they write checks to all the savers out there as well…you know, maybe a 20-40% of the cost of a house check that will cover what the prices should have fallen to.

[Anonymous]

He argued that action by the White House would not only help homeowners who might lose their home. Wall Street, which created, marketed and invested in complex securities backed by subprime mortgages over the years, could benefit as well.

“Your stocks and risk-oriented levered investments will spring to life like the wild flowers in Death Valley after a flash flood,” Gross wrote.

Aha – there is the real reason why he wants this. It would be the indirect bailout to over-levered investors.

Write some checks, bail ’em out, prevent a destructive housing deflation

Cool, just so long as they write checks to all the savers out there as well…you know, maybe a 20-40% of the cost of a house check that will cover what the prices should have fallen to.

[falcon_eyes]

to Alex_angel, Gross has granted your wish today. You should be thankful to Pimco group soon by sending the bouquet 1-800-Flowers gift.

[falcon_eyes]

to Alex_angel, Gross has granted your wish today. You should be thankful to Pimco group soon by sending the bouquet 1-800-Flowers gift.

[falcon_eyes]

to Alex_angel, Gross has granted your wish today. You should be thankful to Pimco group soon by sending the bouquet 1-800-Flowers gift.

[bsrsharma]

What do you think of a bailout plan like this:

Anyone can sell a house to a (new US Govt funded) RTC for, say, $100,000 max and $100/sqft max etc.,. Govt will convert them into public housing (through HUD) or sell when market improves. This provides a buyer of last resort when prices plummet.

[bsrsharma]

What do you think of a bailout plan like this:

Anyone can sell a house to a (new US Govt funded) RTC for, say, $100,000 max and $100/sqft max etc.,. Govt will convert them into public housing (through HUD) or sell when market improves. This provides a buyer of last resort when prices plummet.

[bsrsharma]

What do you think of a bailout plan like this:

Anyone can sell a house to a (new US Govt funded) RTC for, say, $100,000 max and $100/sqft max etc.,. Govt will convert them into public housing (through HUD) or sell when market improves. This provides a buyer of last resort when prices plummet.

[no_such_reality]

My gut says the bond market is about to hand him is behind.

[no_such_reality]

My gut says the bond market is about to hand him is behind.

[no_such_reality]

My gut says the bond market is about to hand him is behind.

[donaldduckmoore]

A clue that the FEd will not do anything, then they steer to our president. Maybe our president will nod his head, but he has already created a handful of debt from the war.

But that strategy may work because when republican and some democrats agree to bail out, then there will be a bailout. It is a basket full of idiots in our leadership anyway!!!

[donaldduckmoore]

A clue that the FEd will not do anything, then they steer to our president. Maybe our president will nod his head, but he has already created a handful of debt from the war.

But that strategy may work because when republican and some democrats agree to bail out, then there will be a bailout. It is a basket full of idiots in our leadership anyway!!!

[Author]

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