PIMPCO on "housing nationalization"...

[doom&gloom]

who else but Bill Gross would be looking for "guarantees" on his bond portfolio by the likes of all the taxpayers...

http://noir.bloomberg.com/apps/news?...d=aQrLLpgud3rI

Gross Urges ‘Full Nationalization’ of Housing Finance (Update3)




By Lorraine Woellert and Rebecca Christie




Aug. 17 (Bloomberg) -- Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said the U.S. should consider “full nationalization” of the mortgage- finance system as the Obama administration plots the revival of a market that was at the center of the 2008 credit crisis.
“To suggest that there’s a large place for private financing in the future of housing finance is unrealistic,” Gross said today at a U.S. Treasury Department conference in Washington. “Government is part of our future. We need a government balance sheet. To suggest that the private market come back in is simply impractical. It won’t work.”

*snip*

[reggie]

Re: PIMPCO on "housing nationalization"...

who else but Bill Gross would be looking for "guarantees" on his bond portfolio by the likes of all the taxpayers...

Sometimes it feels that guys like this [PIMP CO] simplly enter the public messaging domain on command, reading script lines just at the right time to keep the public off balance with more outrageousness.

[ThePythonicCow]

Re: PIMPCO on "housing nationalization"...

simply enter the public messaging domain on command

Ah - but at whose command?

[alext]

Re: PIMPCO on "housing nationalization"...

Since Bill GROSS-OUT from PIMP-CO is supposed to be one of the bond "Vigilantes" that all of the Keynesian “economists” (LOL) talk about, what did you expect?

He has been in the pocket of at least the last four presidents and he has been well paid for his bootlicking.

Expect more bullsh*t to spew from the mouth of this lowlife.

[GRG55]

Re: PIMPCO on "housing nationalization"...

Since Bill GROSS-OUT from PIMP-CO is supposed to be one of the bond "Vigilantes" that all of the Keynesian “economists” (LOL) talk about, what did you expect?

He has been in the pocket of at least the last four presidents and he has been well paid for his bootlicking.

Expect more bullsh*t to spew from the mouth of this lowlife.

Setting aside one's personal feelings towards Bill Gross and his company, Pimco, it would seem to me that he's just stating the obvious [obvious to any impartial observer, not necessarily your friendly local Congressperson]:

1. No sane private person would lend money for housing in the current circumstances;
2. The mortgage market, now dominated by Fannie, Freddie, FHM and the Veteran's Administration is already nationalized for all practical purposes;
3. The Fed has no chance of removing ZIRP for a long time to come [this is going to be years, not a few months or quarters];
4. Without the increasingly overt government supports the housing market goes "poof", followed shortly thereafter by the US banking system.

Explicit nationalization would seem baked in the cake...

[karim0028]

Re: PIMPCO on "housing nationalization"...

Setting aside one's personal feelings towards Bill Gross and his company, Pimco, it would seem to me that he's just stating the obvious [obvious to any impartial observer, not necessarily your friendly local Congressperson]:

1. No sane private person would lend money for housing in the current circumstances;
2. The mortgage market, now dominated by Fannie, Freddie, FHM and the Veteran's Administration is already nationalized for all practical purposes;
3. The Fed has no chance of removing ZIRP for a long time to come [this is going to be years, not a few months or quarters];
4. Without the increasingly overt government supports the housing market goes "poof", followed shortly thereafter by the US banking system.

Explicit nationalization would seem baked in the cake...

Very clear, concise response grg.... When you look at it that way, what is the end game? If the private market wont touch it that means it is not profitable at all and in fact loses money... It seems like the end game is a currency collapse or new currency or a debt foregivness and reset.... Govt cant support the market forever, can they?

[we_are_toast]

Re: PIMPCO on "housing nationalization"...

Setting aside one's personal feelings towards Bill Gross and his company, Pimco, it would seem to me that he's just stating the obvious [obvious to any impartial observer, not necessarily your friendly local Congressperson]:

1. No sane private person would lend money for housing in the current circumstances;
2. The mortgage market, now dominated by Fannie, Freddie, FHM and the Veteran's Administration is already nationalized for all practical purposes;
3. The Fed has no chance of removing ZIRP for a long time to come [this is going to be years, not a few months or quarters];
4. Without the increasingly overt government supports the housing market goes "poof", followed shortly thereafter by the US banking system.

Explicit nationalization would seem baked in the cake...

For the first 30 years of it's existence, Fannie was a government agency, then in 1968 it became a GSE. The mistake is not in renationalizing the market, it was in trying to privatize it and letting it be exposed to the corruption of the FIRE economy.

[GRG55]

Re: PIMPCO on "housing nationalization"...

Very clear, concise response grg.... When you look at it that way, what is the end game? If the private market wont touch it that means it is not profitable at all and in fact loses money... It seems like the end game is a currency collapse or new currency or a debt foregivness and reset.... Govt cant support the market forever, can they?

• "Forever" is a long time;
• What is unsustainable will inevitably come to an end;
• However, as we have discovered from experience, these things can go on longer -much longer- than any of us might imagine possible.

[ThePythonicCow]

Re: PIMPCO on "housing nationalization"...

When you look at it that way, what is the end game?

If the private market wont touch it that means it is not profitable at all and in fact loses money... It seems like the end game is a currency collapse or new currency or a debt foregivness and reset.... Govt cant support the market forever, can they?

I don't think currencies collapse in a vacuum. They collapse against something else. They (TPTB) slap us up one side of the head with more economic hard times and slap us up the other side of the head with a larger war gone badly ... then they "save" us from our deeply indebted, weakened and depressed state with a global monetary system reset that subordinates the Fed and U.S. Treasury to the BIS and IMF. Then the Dollar can collapse, against SDR's or whatever they call them.

[vinoveri]

Re: PIMPCO on "housing nationalization"...

Without the increasingly overt government supports the housing market goes "poof", followed shortly thereafter by the US banking system.

You refer to the sham asset inflated ponzi scheme housing market, right? The housing market does not disappear b/c the government stops supporting it; people still need somewhere to live, and the market (after a painful adjustment down for some folks) will stabilize.

And while I don't agree that the collapse of the banking system necessarily follows from the lack of gov support of the housing market, even assuming folks believe this, is not this the same argument made for TARP, the expressed backstops, and every other scheme since Sep 2008 ... i.e.,?

Reform the banking system in advance or in conjunction with the dismantling of the GSEs is the solution. Oh, I overlooked the fact that the Federal Reserve banking system is superior to the gov ... never mind.

[karim0028]

Re: PIMPCO on "housing nationalization"...

You refer to the sham asset inflated ponzi scheme housing market, right? The housing market does not disappear b/c the government stops supporting it; people still need somewhere to live, and the market (after a painful adjustment down for some folks) will stabilize.

And while I don't agree that the collapse of the banking system necessarily follows from the lack of gov support of the housing market, even assuming folks believe this, is not this the same argument made for TARP, the expressed backstops, and every other scheme since Sep 2008 ... i.e.,?

Reform the banking system in advance or in conjunction with the dismantling of the GSEs is the solution. Oh, I overlooked the fact that the Federal Reserve banking system is superior to the gov ... never mind.

I dont believe he means it disappears, he means it collapses, essentially going to close to cash/carry value... If you cant get a mortgage then it goes to what it would rent for and nothing more, cashflow basis perhaps?

[swgprop]

Re: PIMPCO on "housing nationalization"...

For the first 30 years of it's existence, Fannie was a government agency, then in 1968 it became a GSE. The mistake is not in renationalizing the market, it was in trying to privatize it and letting it be exposed to the corruption of the FIRE economy.

I'd argue that the mistake was semi-privatizing it. Freddie and Fannie as GSE's had implicit government guarantees. If they had been made truly private with a clear message from the government that they were on their own they would have been liquidated by now - at stockholder/bondholder expense rather than that of taxpayers.

Would that have been the end of mortgage lending in the US? No. Disruption certainly. Price adjustments absolutely. But banks and credit unions eventually would fill the void - with a return to sane underwriting standards. And perhaps even a newly formed secondary market (eventually).

[medved]

Re: PIMPCO on "housing nationalization"...

For the first 30 years of it's existence, Fannie was a government agency, then in 1968 it became a GSE. The mistake is not in renationalizing the market, it was in trying to privatize it and letting it be exposed to the corruption of the FIRE economy.

The mistake is in creating it in the first place. We don't need to "promote" home ownership (reminder for the big gov't enthusiasts, this is not "regulation"). Whoever can own a house will own it, whoever can not, will not. Creating yet another overreaching centralized agency is just asking for trouble. It will surely be abused, if not by the sleazy Wall Street, then by the crooked gov't commissars.

[c1ue]

Re: PIMPCO on "housing nationalization"...

The mistake is in creating it in the first place. We don't need to "promote" home ownership (reminder for the big gov't enthusiasts, this is not "regulation"). Whoever can own a house will own it, whoever can not, will not. Creating yet another overreaching centralized agency is just asking for trouble. It will surely be abused, if not by the sleazy Wall Street, then by the crooked gov't commissars.

Agreed.

The private, public-private partnership, or government nature of Fannie/Freddie/alphabet soup is exactly the problem.

While I do agree nationalization is going to happen - it isn't because it is what should occur in order to return the housing market to healthy organic growth.

It is because the banksters will want it.

Bill Gross and Pimco are no different than Goldman Sachs in this regard.

However, I will note that Bill Gross and his co-Pimco-leaer Mohammed El-Erian at least were outspoken in the sense of calling out the abuses in the market.

It is perfectly understandable in this case that Bill would talk his book.