Pimco's Gross says bailout plan will help Main Street
NEW YORK, Sept 28 (Reuters) - The revised plan to shore up the financial system agreed to by U.S. congressional leaders and the Bush administration will get credit markets moving again and help average Americans, not just Wall Street's elite, the head of the world's biggest bond fund said on Sunday.
"Importantly this is a bill that will benefit Main Street and the U.S. economy," Bill Gross, chief investment officer of Pacific Investment Management Co, told Reuters.
"The $700 billion-dollar program will help to unclog the hundreds of billions of subprime mortgages within the banking system, allowing for future lending to take place in housing, credit cards, car loans, student loans, and a host of other categories," Gross said.
"In addition, the ability of the Treasury to make a profit will be enhanced by the issuance of warrants as well as oversight of the purchase price of these assets via reverse auction," he said.
"Last, and critically, once these loans are purchased by the Treasury they will have the ability to reduce interest rates and modify the terms on all of the mortgages," Gross said. "Main Street, the U.S. economy and the financial markets in turn will all benefit in this triple-win program." (Reporting by Jennifer Ablan, Writing by Dan Burns, Editing by Maureen Bavdek)
