Gross on Funny Money Loans, Plankton Theory, and Why The Fed Will Rescue Housing

As I have written before, I plead guilty to being a member of the Bill Gross Fan Club. His writings about the economy are as clear and engaging as anything you'll find, but he also gives you some heart and soul and history. Can you name another economist (or another person in all of corporate America) who has published his personal thoughts about the Iraq war? Seriously, if you can, I'd like to hear it.

If you missed it, Gross' economic column last month began by quoting the great anti-war anthem "War" by Edwin Starr:"I can only conclude from personal experience in Viet Nam, and redundant renderings of history books that Motown singer Edwin Starr was right – war is good for absolutely nothing."

But I digress; this is about real estate. Click here to find video of Gross on CNBC explaining the following: Why houses are 20% overvalued, why subprime loans are dinosaurs, why the Plankton theory applies to housing, and why a series of Fed rate cuts is coming later this year to save the housing market from disaster.

I find the Plankton theory particularly relevant, so I'll do a separate post about it later this morning.

Thoughts? Comments? Insights?