This is a call for a bankers bail out plain and simple.
More accurately, if you look at Pimco’s holding of MBS’s, much of it flirting with sub-prime or in areas where RE valuations will be impacted by sub-prime meltdowns, Gross is asking for a bailout of Pimco.
Trouble is, state legislators in places like NJ and California are talking about exactly this sort of bailout.
Note that Bill Gross’s PIMCO total return fund is heavily, very heavily, invested in mortgage backed securities as well as Fannie May and Freddy Mac. His return has been worse than a savings account. Now he wants his fund bailed out.