Bill Gross’s Pimco may not have just delivered the best one-day gain ever on a trade, but his $1.7-billion gain on Monday was arguably among the best from a risk-return standpoint. He locked himself into the agency mortgage bond market — more than 60% of his fund was in mortgages by May of this year — so he was hugely levered to a Fannie/Freddie bailout.
He, of course, didn’t leave that to chance, agitating at every opportunity he could for a "new balance sheet — i.e., taxpayers via Treasury — to support Fannie and Freddie. That culminated in his primal scream last Thursday, and the bailout on Sunday.
Nicely done, Bill. More here.