The federal goverment's seizure of Fannie Mae hurt a lot of stockholders, but one person who came out ahead was Bill Gross, whose Pimco funds held lots of bonds backed by Fannie Mae. The Wall Street Journal reports this morning that, through a trust, Mr. Gross has bought an 11,000 square foot, nine bedroom, 12 bathroom house for $23 million that he plans to tear down and build a brand-new house to replace in what might be called his own version of the cash for clunkers program. Fannie has taken in about $46 billion in aid from the U.S. Treasury, in addition to backing from the Federal Reserve, this Forbes article reports. In other words, the taxpayers are helping Mr. Gross build his new house. Not a bad deal for Mr. Gross.
Gross's $23 Million Tear-Down