August 24, 2007 (LPAC)--Bill Gross, CEO of the world's biggest bond trading company PIMCO, with a sober reputation for disdain for irrational speculation, calls for a huge Federal bailout of the mortgage industry in an op-ed published in several newspaper Aug. 24--yet uses the name of FDR and the language of the New Deal to describe this indiscriminate bailout of homeowners, speculators, and toxic mortgage-backed securities alike. Gross' op-ed shows the panic gripping credit markets which cannot cope with the frozen or disappearing values of the securities of the 2001-06 hyperinflationary mortgage bubble; he wants those securities revived at immense government expense. But the op-ed also reflects the urgent fact, visible to all, that the mass foreclosure wave in the United States must be stopped.

"Fiscal, not monetary policy should be the preferred remedy, one scaling Rooseveltian proportions emblematic of the RFC [Roosevelt's Reconstruction Finance Corporation], or perhaps, to be more current, the RTC [Resolution Trust Corporation] in the early 1990s when the government absorbed the bad debts of the failing savings and loan industry. Why is it possible to rescue corrupt S&L buccaneers in the early 1990s and provide guidance to levered Wall Street investment bankers during the 1998 LTCM crisis, yet throw 2,000,000 homeowners to the wolves in 2007? If we can bail out Chrysler, why can't we support the American homeowner?... This rescue, which admittedly might bail out speculators who deserve much worse, would support millions of hard-working Americans whose recent hours have become ones of frantic desperation. And ... look at it this way: your stocks and risk-oriented levered investments will spring to life like the wild flowers in Death Valley after a flash flood... Re-establish not the RFC or the RTC, but create an RMC--Reconstruction Mortgage Corporation."