Bill Gross for President! Gross calls for massive mortgage refinance.

[dkf]

Now this is the kind of smart policy I am looking for.

http://us.mobile.reuters.com/article/topNews/idUSTRE67G51120100817?ca=rdt

WASHINGTON (Reuters) - Influential bond investor Bill Gross dispensed more policy advice than the U.S. Treasury bargained for on Tuesday, calling for a massive program to refinance mortgages at low rates to boost the flagging economy.

Gross, speaking at a Treasury forum on the future of housing finance giants Fannie Mae and Freddie Mac, said a massive refinancing program to slash monthly mortgage payments could boost consumer spending by $50 billion to $60 billion and boost home prices by 5 to 10 percent.

"Policymakers should quickly re-engineer a refinancing opportunity for all mortgagees that are current on payments and are included in GSE-securitized mortgages," said Gross, PIMCO's co-founder and co-chief investment officer.

"The American economy is approaching a cul-de-sac of stimulus, both monetarily and fiscally, which will slow it to a snail's pace incapable of providing sufficient job growth going forward."

Such a program was needed in the next six months, he added.

[MannyGoldstein]

1. Interesting, but inflating house prices even more is trouble

They're already (still) historically very high compared to a median income. Not so bad compared to family income, because now we have two people working per family.

[dkf]

2. If that is one side effect of injecting $50-$60 billion without a cent to the US govt

I can live with that. This could MAKE the November elections. Wowee.