Bill Gross and Pimco reportedly made a profit of eight billion dollars in one day on the bailout of Fannie Mae and Freddie Mac by speculating on their bonds. This was a wealth transfer from holders of US dollars to Pimco and did nothing on net for the real economy, except to drain valuable resources and mindshare.
At least Soros made his one billion in currency arbitrage by actually opposing a government financial fiction rather than encouraging it when he pounded sterling.
Bill was on CNBC today touting the attractiveness of these instruments for general consumption. Time to book profits and find a new wealth transfer angle to play Bill?
