Fed Dumps PIMCO, Goldman Sachs for MBS Scam
I of course use the word "scam" with pierced tongue planted firmly in cheek.
The Federal Reserve dropped Pacific Investment Management Co. and Goldman Sachs Group Inc. from the list of firms helping the central bank purchase as much as $1.25 trillion of mortgage securities this year.
The move was disclosed in a statement posted today on the New York Fed’s Web page. Wellington Management Co. and BlackRock Inc., the other two managers hired as part of the unprecedented program that started in January, are being retained, according to the statement.
“These changes are not performance related,” the New York Fed said. The bank “anticipated that it would make adjustments to its use of external investment managers as it gained more experience.”
The change comes amid concern that the Fed’s asset managers may use inside information garnered from their roles in their other businesses. Representative Patrick Murphy, a Pennsylvania Democrat, sought reports to Congress on the potential conflicts earlier this year. The asset managers’ contracts call for a segregation of staff working on the program.
The central bank has bought a net $741.6 billion of securities guaranteed by government-supported Fannie Mae and Freddie Mac or federal agency Ginnie Mae through Aug. 12 under the program, according to data complied by Bloomberg.
Awww, listen, guys, I know a break-up can be difficult but hang in there. My suggestion?
A good breakup playlist
A great pair of CFM boots for when you're ready to start tearing up the town again
(Google that if you're confused, Bill Gross)