Of Bonds and Bitchiness

“Alyssa, I’m sorry I called you a gap-toothed bitch. It’s not your fault you’re so gap-toothed.”
– Mean Girls

One of the biggest stories of the week was the ongoing fallout from the Mohamed El-Erian / Bill Gross break-up at PIMCO. In the wake of Greg Zuckerman’s incredible story at the Wall Street Journal, it had become the talk of the industry, forcing many investors to think twice about their allocations to the firm’s products.

My friend Jenn Ablan, a Reuters reporter who covers all the Bond Kings for Reuters came away from a call with Gross that contained some wild accusations about the Zuckerman article and the whole thing just blew wide open the other day.

The question for investors everywhere is whether or not PIMCO is in disarray or if its vaunted decision-making process can be trusted anymore. Institutions, individual investors, professional advisers and money managers of all kinds have allocated hundreds of billions to the firm. The now-public issues about Gross’s ego and monomania have led to a public discussion to this effect.

My own take is that we will never know about all of the dynamics between Gross and El-Erian – both of whom I have a great deal of respect for as investors and thinkers – but that we probably shouldn’t rush to judgment over a few errant quotes and comments during an emotionally charged time for both of them. Also, as others have posited, bull markets don’t end pleasantly – especially bond bull markets that had run on for thirty years. The aftermath at PIMCO could never have been congenial after three decades of downhill marathoning. 

Below are some of the better musings on the topic:

Exclusive: Pimco’s Gross declares El-Erian is ‘trying to undermine me’ (Reuters)

It’s time for Bill Gross to retire (Reuters)

Conflicting claims worry Pimco investors (FT)

PIMCO’s Got Bigger Problems Than The Tabloid Drama We’ve Been Reading About Lately (BusinessInsider)

BTW, Barry and I have promised our employees and ourselves not to split so acrimoniously if, heaven forbid, we ever felt the need to (we don’t, I’m writing this blog post wrapped in his arms at our getaway cottage in New England).