Last Fall PIMCO chief Bill Gross was on the airwaves raising the alarm bell about how the backlog of toxic mortgage-backed securities were on the brink of crushing the US economy. And he certainly had some unique insight into the problem since over 60% of his firm’s $830 billion in holdings were made up of those mortgage-backed securities. At the time, Gross was on the airwaves (on CNBC in particular) pledging that just out of a sense of patriotic duty he’d be willing to have his firm manage the government bail-out (i.e., government purchase of the crap CDOs) for free. Just for the sake of patriotism.
So now that his firm is one of the four that got a contract to run the program from the Fed, is he following through on the pledge? Doesn’t seem like it. So far we’ve gotten through to three of the four firms, each of which has declined to comment on the fees the four companies are making for administering the program. PIMCO is the only one that hasn’t responded at all. So it’s seeming like the patriotic do-it-for-free plan hasn’t panned out.
Josh Marshall is editor and publisher of TalkingPointsMemo.com.