Thursday, September 11, 2008

Paul Kedrosky: Bill Gross' 1.7B One day gain

"Bill Gross's Pimco may not have just delivered the best one-day gain ever on a trade, but his $1.7-billion gain on Monday was arguably among the best from a risk-return standpoint. He locked himself into the agency mortgage bond market -- more than 60% of his fund was in mortgages by May of this year -- so he was hugely levered to a Fannie/Freddie bailout.
He, of course, didn't leave that to chance, agitating at every opportunity he could for a "new balance sheet -- i.e., taxpayers via Treasury -- to support Fannie and Freddie. That culminated in his primal scream last Thursday, and the bailout on Sunday.
Nicely done, Bill. More here.

1 comment:

Anonymous said...

LEH With the rumors surrounding Lehman Brothers about how they need another 4 billion of capital, you would think coming out to state they have more than 4 times that amount of liquidity would stave a sell-off