< HOME  Friday, December 23, 2005

What's in your wallet?

Remember my earlier post on the increasing number of American workers employed by foreign subsidiaries in the US? Well, post this to the left of that one in your memory bank. I suspect it will be useful in the near future.

Pacific Investment Management Co. LLC (PIMCO), is one of the biggest investors in the U.S. Treasury bond market.

With more than $500 billion in assets under management, [PIMCO] is one of the world's largest bond fund managers. It also oversees mutual funds invested in emerging markets debt, municipal bonds, credit default swaps, mortgage-backed securities, stocks and real estate investment trusts, or REITs.

It seems PIMCO carries a lot of our DEBT in its wallet.
[A] recent tax ruling that would limit [PIMCO's] investments in commodity-linked swaps and related derivatives should not inhibit its operation of an $11 billion commodity fund.

The ruling would cause certain income from commodity-linked swaps in which the PIMCO fund invests to no longer qualify for a favorable tax status after June 30.
The implication being that PIMCO currently has favorable tax status on its income, which seems to be primarily INTEREST.

It's no surprise then that Moody's analyst described PIMCO as "the goose that lays the golden eggs" for Pacific Life Insurance Company in a 2004 analysis (PDF, p. 5) of Pacific Life, while it still had "a beneficial economic interest in PIMCO." It's not clear that they still do.
In May 2000, Allianz AG of Germany bought a majority stake in PIMCO's parent, PIMCO Advisors LP. As of June 30, 2005, the German insurer owned about 97 percent of that entity, now known as Allianz Global Investors of America LP.
So, maybe the question ought to be 'whose wallet holds our DEBT?'


At Friday, December 23, 2005, Anonymous Anonymous said...

Very interesting. Thanks for all the independant reporting =)


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