Gross: Bailout of Wall Street Will Help Main Street
The Treasury’s bailout plan for Wall Street will also benefit Main Street, Bill Gross, founder and chief investment officer of investment management firm Pimco, told CNBC Wednesday.
Gross also said that Pimco would work for no fee to help manage mortgages and assets bought by the federal government under the bailout “if [other firms] worked on the same basis.”
“The package really is a pro-Main Street package," he told CNBC's Erin Burnett. "It’s the first program really where taxpayers will benefit." (See the full interview in the video at left.)
Gross estimated that under the proposal, the average price of distressed mortgages that the Treasury would acquire from “troubled financial institutions” would run 65 cents on the dollar, yielding up to 15 percent.
Gross added that the Treasury's plan will leave it in a position to produce equity returns.
“Financed at 3 to 4 percent via the sale of Treasury bonds, the Treasury will therefore be in a position to earn a positive carry or yield spread of at least 7 to 8 percent,” he wrote in an op-ed column in the Washington Post Wednesday.
Separately on CNBC, Rep. Lloyd Doggett, (D) Texas called for alternative measures.
"I don't think looking at the people that weren't invited to the party to pay for all of it is the right way to do," he said. "We should be looking at how to pay for this in an alternative way than just asking future generations to be paying the interest."