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« Covering local politics | Main | At the movies »

Jul 31, 2007

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Percy Walker

I do enjoy Gross' monthly "Investment Outlook." Nominees for this month's metaphor-of-the-month:

1. "[E]ven those that swallow their hot dogs whole – Nathan’s Famous Coney Island style – are having a serious bout of indigestion."

2. "Six weeks ago the high yield debt market was humming the Campbell’s soup theme and now, it’s begging for a truckload of Rolaids."

3. "[I]t resembles a constipated owl: absolutely nothing is moving."

4. "Gilded ages come, go, and are reborn on the monsoon cloudbursts of seemingly intangible forces."

5. "That the golden glazed surfboards of the 21st century seem unique with their decals of "private equity" and "hedge finance" is mostly a mirage."

BTW, it's not clear to me that Gross wants his own taxes raised. His badmouthing of my good friend Ken Griffin indicates he favors changing the tax treatment of the profits interests granted hedge fund and private equity managers, but such a change won't affect Gross given the types of investments managed by PIMCO (fixed income) and how PIMCO is compensated (a percentage of assets under management).

Bubba

"Those that assert that this is merely an isolated subprime crisis should observe very closely the price and terms that lenders are willing to accept with Chrysler finance this week. That more than anything else may wake them, shake them, and tell them that their world has suddenly changed."


It's a wake up call, not the End of the Finacial World As We Know It.

The change is not all that radical in the Chrysler deal, and there's a good possibility Goldman Sachs, J.P. Morgan, and their partners may end up doing some restructuring to absorb some of the extra cost.

The Chrysler deal and several others get done with a minimum effect.

All it means is that Cerberus should have been a little quicker to act.

Ed Cone

PW, I'm assuming that some portion of his immense portfolio is invested for capital gains, and that he may also draw a salary.

Percy Walker

I was focusing only on Gross' sympathy for changing the tax treatment of carried interest, which wouldn't affect him any way but positively in that higher carried interest taxes would, like a yak with dysentery floating on monsoon clouds, spray alternative asset managers while the bodyboards with mutual fund decals would be spared like a cheeseburger at a Chestnut-Kobayashi rematch.

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