Although Bill Gross, managing director at Pimco and one of the most famous and successful fund managers in the industry, recently said that the U.S. will experience a mild recession in 2008, he now believes the downturn began this month. The good news is that he only expects it will last four to five months, the Financial Times reports.

And as he expects GDP growth of a mere 1% in 2008, he is calling on the Federal Reserve to bring interest rates down to 3% and for the Bush administration and Congress to “take some rather unperceived and un-forecasted measures in terms of fiscal stimulation.”

“If I had to be bold, I’d say we began a recession in December,” Gross said. And if the government doesn’t step in to effectively jumpstart the economy, the recession could last longer.

So far, Gross said, he has not been satisfied with the government’s attempts to stabilize credit markets. “What needs to be done is something fairly radical compared to Republican orthodoxy, which means spend money and absorb the deficit, as opposed to pretending that you’re fiscally conservative.”

Gross also lambasted hedge funds, calling them nothing more than a “con, an unregulated bank. It’s been a con on the government in terms of their unwillingness to regulate the industry.”

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