Bill Gross: Bailout Good For Main Street, Wall Street, And Economy
Monday, September 29th, 2008While a good number of Americans do not support the proposed government bailout of the U.S. financial system, PIMCO’s Bill Gross does not count himself in this group. In fact, the “King of Bonds” is highly-supportive of the $700 billion scheme. Reuters’ Jennifer Ablan wrote yesterday:
“Importantly this is a bill that will benefit Main Street and the U.S. economy,” Bill Gross, chief investment officer of Pacific Investment Management Co, told Reuters.
“The $700 billion-dollar program will help to unclog the hundreds of billions of subprime mortgages within the banking system, allowing for future lending to take place in housing, credit cards, car loans, student loans, and a host of other categories,” Gross said.
“In addition, the ability of the Treasury to make a profit will be enhanced by the issuance of warrants as well as oversight of the purchase price of these assets via reverse auction,” he said.
“Last, and critically, once these loans are purchased by the Treasury they will have the ability to reduce interest rates and modify the terms on all of the mortgages,” Gross said. “Main Street, the U.S. economy and the financial markets in turn will all benefit in this triple-win program.”
Source:
“Pimco’s Gross says bailout plan will help Main Street”
Jennifer Ablan
Reuters, September 28, 2008




