It was interesting reading yesterday in the Wall Street Journal about Bill Gross of the PIMCO bond fund based in Newport Beach, California. He is one of the most successful Bond fund managers in the United States if you look at his record over the past 15-20 years, averaging around 8% profits on a yearly basis, when most other fund managers considered 'successful' average between 4 or 5%.

Well it seems 2006 and so far this year, he has fallen in rank, much to the delight of some other managers.

He did so because he was betting that interest rates would be coming down, so he went long (Owned) bonds. Of course we all know that when bonds go up, yields come down. Well he was wrong with a sizable bet. Now, you know a guy like Bill doesn't put all his eggs in one basket, that's why he still managed a normally profitable year.

The point of all this is that he is still betting on interest rates coming down and knowing him over the long haul, he will be right shortly. If he is, then I don't have to tell you what lower rates will do for the housing market...

Another surprise was that he disclosed that Alan Greenspan would be coming aboard as an adviser to his PIMCO fund... He will most likely be saying good things about the housing market and lower rates shortly too... Nobody likes higher rates in election years...