A mere fortnight ago Bill Gross, who manages the world's largest bond fund PIMCO, was singing the praises of the Treasury Department's newly-unveiled Public Private Investment Program in the media, which the media in turn credited for the stock market rally that immediately followed. But in any event, Gross's endorsement of the plan hardly a surprise, since 1. PIMCO holds more than $118 billion in mortgage-backed securities 2. including one fund that has lost 34% of its value since its 2007 inception and 3. oh yeah, the plan was in part Bill Gross's idea. By the time the week was out PIMCO was being dubbed the fourth branch of government.

Now PIMCO is not very subtly distancing itself from the PPIP, which has only gotten less popular as its details have emerged. This morning, on the heels of yesterday's stock market selloff that accompanied the Treasury Department announcement that it was extending the deadline for PPIP applications and clarifying that applicants would be considered "holistically" (i.e. that demonstrated ability to raise $500 million requirement is now more like a rule of thumb) PIMCO Chief Investment Officer Mohammed Al-Arian went on Squawk Box to talk markets with celebrated (by CNBC anyway) stock picker Mario Gabelli, who couldn't resist getting in a dig at PIMCO for the plan's self-defeating "competitive restraint." The fun starts about 7:54 in, transcript after the jump.

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