Of course, viewers should always remember that Pimco is the bond division of Allianz, the German insurance company.

The focal point of lawsuits by survivors of Holocaust victims, Allianz is one of the German core corporations and, therefore, under the direct control of the Bormann capital network and Underground Reich.

Recall your earlier contribution, in which Pimco’s Bill Gross is quoted as saying he’s “kind of Ron Paul-ish” in response to the question who he likes for President.

Sort of makes sense, doesn’t it?

People think I’m obsessing when I speak about the topic of the Bormann network.

It is, as one banker quoted in FTR #152 put it, the “largest concentration of money power under a single control in all of world history.”

Looks like they’ve got the U.S. by the short hairs.

I’m proud to follow in the noble, though VERY lonely footsteps of Paul Manning and Edward R. Murrow in covering this topic.

Special report: The twilight of the Bond King

By Jennifer Ablan and Matthew Goldstein

NEWPORT BEACH, California | Thu Feb 9, 2012 3:52pm EST

(Reuters) — He is the man who made bond investing sort of sexy — and now he may pay the price.

Over more than three decades, Bill Gross, co-founder of asset-management giant PIMCO, has made so much money for clients that he has become the barometer by which other bond traders are judged. His West Coast perch, prescient calls on the U.S. economy and devotion to yoga only added to the mystique.

But the very recipe that enabled Gross to dominate his industry may now be conspiring against him.

He’s coming off his worst year in the business after making a huge bet against U.S. Treasuries that backfired. Last year, for the first time in nearly two decades, investors pulled more money out of PIMCO’s flagship fund than they put in.

More troubling, U.S. regulators are now considering whether PIMCO should be deemed a “systemically important financial institution” — that is, too big to fail, and thus subject to tighter regulatory oversight. The concern: The juggernaut manages so much money for pension funds that it could hammer the economy if it ever went under. The firm has doubled in size to $1.36 trillion in assets since the collapse of Lehman Brothers in 2008.

The firm is lobbying hard to fend off the “systemically important” designation, according to regulatory disclosures. Like other financial firms, it also objects to impending rules that could make some of its derivatives trading more costly.

Industry analysts also wonder whether PIMCO’s $250 billion Total Return Fund, the world’s largest bond fund, is such a behemoth that Gross sometimes has to swing for the fences to generate the kind of returns investors have come to expect. Because PIMCO’s flagship fund relies heavily on derivatives to bet on bonds, some analysts say it’s unnecessarily complex and potentially at risk should one of its trading parties fail.

...

POWERFUL PEOPLE

Gross brought in former Fed chairman Alan Greenspan as a consultant in 2007. Also gracing PIMCO’s ranks are former top advisors to the Bush administration: Joshua Bolten, a former White House chief of staff, Richard Clarida, assistant secretary of Treasury, and Neel Kashkari, who ran the Wall Street bailout program better known as TARP.

Currently, Stephen Rodosky, a top portfolio manager at PIMCO, sits on the 13-member Treasury Borrowing Advisory Committee, an important adviser to the government.

PIMCO even came close to getting one of its own on the Federal Reserve. President Obama in 2010 considered Paul McCulley, a portfolio manager and the firm’s defacto Fed watcher, for a Fed governorship. But McCulley didn’t make the final cut. He left PIMCO in December 2010 and is now a director of the Global Interdependence Center public policy group.

Gross bristles at talk among some competitors, financial columnists and bloggers that PIMCO is too close to U.S. monetary policy makers. He says the firm doesn’t get special treatment. In fact, Gross says, the first time he met Treasury Secretary Timothy Geithner “or any of them” in person was October 2010.

“It’s just a suspicion” to characterize PIMCO as being cozy with the government, he added.

The PIMCO subsidiary operations that were helping the Treasury and the Fed buy mortgages and run their commercial paper programs were completely detached from the firm, he added in an interview. “They were in a separate building, and when Mohamed and I wanted to wish (traders) a Merry Christmas, we needed two lawyers and a special key to get in the door,” Gross said.

...

DEVIL IN THE DERIVATIVES

Gross and PIMCO are facing questions from industry analysts over the Total Return Fund’s wide use of derivatives — financial instruments that derive their value from another security — to generate some of the fund’s returns.

For years now, a number of industry experts have warned pension investors that the PIMCO Total Return Fund relies heavily on derivatives to gain exposure to bonds and makes leveraged bets using borrowed money — ones that allow it to buy more bonds with less cash as the fund gets bigger.

“This is a fund that is a real challenge for us, especially when you look at its underlying holdings, because of all the derivatives,” says Todd Rosenbluth, a senior director and analyst with S&P Capital IQ. “They are accessing parts of the market without having to put as much money up.” The catch for investors is that it is difficult to fully fathom the risk of what is in the portfolio.

In a 2009 report, pension consulting firm Ennis Knupp found that the Total Return Fund used hundreds of derivatives, including futures contracts and credit-default swaps — a type of insurance contract written on corporate bonds. The consultants said that by using derivatives, Gross had managed to sometimes outperform competitors.

...