Federal Reserve Rains Money On Corporate America -- But Main Street Left High And Dry
Asked Thursday how he did "so well in the past 18 months," Gross, who runs PIMCO's $252.2 billion Total Return Fund, told Bloomberg Television that in addition to a variety of other investments he's made money "from mortgages, yes, in terms of buying them in front of the Fed and selling them to the Fed over the six- to 12-month period of time." Translation: the man who runs the world's biggest bond fund is profiting from buying securities he knows the Fed will eventually want, and then selling them to the Fed at a premium.
Meanwhile, families are being devastated by historic unemployment and record home foreclosure rates. Households and small businesses can't get credit. A quarter of homeowners with a mortgage owe more on that debt than the home is worth. Borrowers are declaring bankruptcy in near-record numbers.
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