When the bailout as originally conceived was first announced, Pimco’s Bill Gross lost no time in putting himself forward as a steward of the $700 billion bailout fund.
Assuming that no second vote succeeds and that the bailout in its present form is toast, the obvious next step is for the government to do something on its own — something which doesn’t require legislative approval. My best guess is that Treasury and the Fed are now going to try to come up with some kind of debt-for-equity swap: a recapitalization proposal which can be implemented through the Fed’s existing powers.
In other words, move over Bill Gross; welcome, Chris Flowers. It’s your expertise we need now.