El-Erian: I Was Privileged to Work at Pimco

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April 23 (Bloomberg) -- Bloomberg View Columnist and Former Pimco Co-CEO Mohamed El-Erian discusses why he chose to end his career at Pimco, his new endeavors, and offers his view of the U.S. economy on Bloomberg Television’s “In The Loop.”

House on his second book.

I know that will keep you busy.

Why did you decide to come out now to speak?

First, good morning and thank you for having me on.

Second, it's time for me to interact with you and others.

I have gone through a transition in the last four months after 14 great years at pimco and now i have put together a portfolio of parts on activities that i'm excited about and i am really excited about being able to spend more time with my family and my daughter.

Things have been put in place going forward and who else but you to have my first interview with?

I appreciate that.

When you called me, i was ecstatic you would join me for your first interview.

Are you surprised at how big the news became of your departure?

I was.

I look back to my time at pimco and i think what a great time.

I had the privilege of working with the best of the best in the industry.

I was there for 14 years including six years as the ceo and the co-cio.

I value the acquaintances and what we did in terms of serving our clients and what we did in terms of globalizing the firm and in terms of diversity and inclusion and in terms of the pimco foundation and have a different perspective on life.

After the long hours, the grueling travel schedule, it was just the right time.

Everyone felt the need because it became so public to make a comment or more about your relationship with bill gross.

What has been accurate and what has not been accurate?

The most accurate is that bill is one of the world posses most -- best investors.

I have had the privilege of watching him in action and he is a great investor.

Someone who is very committed to deliver value.

The other thing that is accurate is that he is part of a talent pool, and enormous bench at pimco.

That is key for the firm going forward.

It is absolutely key to what ultimately matters for the clients.

Your relationship with him or the breakdown of your relationship with him, does that contribute to your departure?

It was time for me to do something different.

I have this wonderful portfolio of part-time activities.

Up to 50% of my time is with the corporate parent of timko.

That is an incredible platform to be able to participate in the megatrends going on.

Then i am writing for you on a daily basis.

That keys me involved in the high-frequency economic moving policy moving things.

I have got a periodic column for the financial times, a book that has just been picked up by a u.s. publisher.

I've got the flex ability to spend time with my daughter.

This is a great part-time portfolio.

It is keeping me plenty busy.

I believe you can say who now.

Can we say?

Yes, it is random house in the u.s.. i have been working with andrew and his colleagues and they have been incredibly helpful in helping me navigate through the whole publishing thing.

Do you have a title?

It will be a look at the central banks and what is ahead and very importantly, how to we navigate outcomes, as opposed to what we are familiar with, which is -- i am really looking forward to looking through the lens of the central banks.

You just mentioned about your 14 year career at pimco.

Many people you became friends with and worked with and above all, bill gross.

Has bill gross reached out to you since then?

I will not comment on my private interactions.

I go back to a very simple issue.

I was privileged to work there.

I had a great time.

A lot of friendship would grow over time.

I am really expecting this to go to success.

How critical was this to come to this decision?

It was hard.

When your daughter comes to you as mine did almost a year ago, with a list of 22 things, you realize there are special moments in your children's life.

Every parent knows it.

I was missing too many of these special moments.

It is that simple.

22 specific events that were important to her that i missed, she wrote down.

A realization that the time had come to do something different.

She sounds like a good lawyer.

It came up in the context of me asking her why it is she does not listen to me anymore.

She said, just a minute, and went in and came back.

We went from discussing lot -- why she was not to arouse asking to do, to me defending that i'm not really an awful parent.

She would make a great lawyer.

At pimco, you are working 15, 16, 17 hours a day.

You now have a collection of part-time jobs.

What is your day to day like now versus what it was like at pimco?

I still get up at the same time, really early.

I spend the first two hours looking at what happened.

At about 6:30, i wake up my daughter.

We make up breakfast.

I get the privilege of taking her to school.

Any parent knows that spending half an hour in the car with your child is a great way to connect.

Then i come back and have conference calls for other elements, for the global development council, that i have the honor of sharing.

Then i picked her up at the bus in the afternoon and take her to activities.

It is wonderful.

A wonderful mix of the professional stuff.

The key issue now is i have more flexibility and i travel less.

I travel a lot -- i traveled a lot and now i travel less.

You are getting into social media.

Yes, twitter.

I discovered what an incredible ecosystem that is for being alerted of interesting articles, interesting elements.

I also discovered something else, the incredible excitement when you mix the advances on the online with social media and something else.

We have seen something else being entertainment.

Your business.

It is consequential in terms of the landscape we will look at in five years.

Class when you first send your tweets out, i noticed who you are following.

You were so humble.

You did not know how social media worked.

When you are on it, you are and bart -- bombarded by a lot of news and a lot of pieces of information.

How did you turn off the news, all the media coverage, on your departure from the firm?

I ignored most of it.

One element of trying to focus on going forward and doing what i had to write books, had to write a book proposal.

I had to put together the various parts of my new professional activities.

I had to respond to the global development council to my role as do a lot to focus on.

I really did not focus much on what was being written.

I turned the volume on the tv off.

When i wake up in the morning, i have to have the volume low.

The last thing i want to do is wake up everybody else in the house.

Would you consider or ever consider in the future to join another big firm again?

I have had quite for jobs and 31 years.

What i've done, like most other people, is start -- stopped working one on a friday insert the other one on a monday.

I am now in joining -- enjoying the journey.

I will have a whole portfolio of part-time activities and it could go well beyond that.

I have no idea where my third career will be.

My first career was international public policy.

My second career was in international finance, mostly pimco.

I have no idea where my third career is.

I'm enjoying the journey.

I'm not key on getting to my destination because the journey has kept me plenty busy.

I do not know where or when i will land.

I'm just in joining -- enjoying the journey right now.

There are so many interesting things going on right now.

I am so amazed by what is going on and how quickly things are changing.

I just wish i had more time to sort what is out there.

-- absorb what is out there.

Would you ever go into politics?

No, i will stay miles away.

I do not think it speaks to my passion or advantage.

I raised it because one of your former colleagues, and there are many colleagues who have done various things, he is running for governor in california.

The focus on -- the focus on education jobs . he love started from scratch and starting from something he could put together and he is very good at that.

I would rather observe people like neil rather than emulate people like neil.

You are a contributing editor to financial times but you are also writing editorials for bloomberg view.

Your most recent editorial tackle the question of whether the u.s. is leaving this time of sluggish economic growth or whether we are stuck in this for a lot longer.

You said, -- are you a big believer in the new normal here?

It is a really important phenomenon.

We have the shadow of two last decade in japan, take this is a. the second thing, finally the research is catching up to reality.

Catching up to the latest paper to a colleague at brown university that news is we are still waiting for the one explanation that allows us to go forward and i do not think we will get that.

It is very important to address that.

We know they're undermining the growth and job engines of this country and the global economy.

It is sad to see congress bickering still and not moving forward on any of these issues.

The issue is, yes, it is great we are getting more research.

We understand the process that.

We already know enough for actions to be taken so that hopefully we do not get stuck in the new normal for another 5-10 years.

Why don't we get the killer app?

There are three very important phenomenon going on.

One is the lack of demand in the economy and where there is demand, it is in the wrong places.

It is what my friend and former pimco colley says the problem between the will and the wallet.

Where there is a well, there is no wallet and where there is a wallet, there is no will.

You have to do with the responsiveness of the economy and the ability to regenerate and renew in terms of production and jobs.

The third issue, and i wrote about this this morning, is that we still have set overhangs that discourage new investment.

We have these issues that interact.

It is really hard to find a single explanation that catches all three in an elegant way.

That is why it will be hard.

But we know enough to go forward.

That is really important.

Class you cannot target the exact policy descriptives.

Isn't there a huge chance for error?

There is an there is a challenge of learning.

There are two laser approach a challenge.

One is to say, i need to know what a solution looks like exactly and i need to know every step of the way for that solution.

The other is, i will learn as i take these steps and adapt, but i will not wait for the whole journey to be clear because by that time, it will be too late and the challenges will be even bigger.

We are stuck there.

We are stuck in the desire for everything -- to know every step and we will not.

It is important to take the first few steps and be open to learning.

That is a good way.

I go back to what was said in the important speech last week.

The future is unusually uncertain.

The answer to unusual uncertainty is not paralysis.

Let me interrupt you.

You are watching her speech closely and you picked out one key part of the speech that you said resonated with you.

You said -- she said, the past of the economy is uncertain and it must respond to unexpected twist and turn the economy may take.

The fact she said the economy is uncertain, the phrasing caught your ear because it reflected a lot of what ben bernanke had said in the past.


I recommend the speech to everybody.

Every time i have read it, i have taken more away from it.

It is an important speech.

It sets out very clearly the challenges.

It brings said transparency one step further.

It visits, making it very clear we are no longer in a school-based world.

We are in an objectives-based world.

For the markets, the uncertainty premium goes up, which means investors should wish to get paid more for the volatility premium and the liquidity premium.

This is an important event as she puts it in the context from the pivot to qe2 forward guidance.

Very powerful speech and it is one that tells us a lot as to what is ahead of us and why this unusually uncertain outlook is here to stay for a while.

Does that change the mandate of the fed or any central bank for that matter?

No, it does not change the mandate for the fed.

Change how sure the markets can be for effectiveness.

The second issue is collateral damage.

The consequences.

Not just for the other parts of the economy, but also the rest of the world.


yellen is starting to recognize is a lot more than what is happening in the past.

We actually have some sound from janet yellen.

I want to play when the fed could tighten interest rates.

The larger the shortfall of employment from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range the federal funds rate is likely to be maintained.

Class everyone says, let me try to figure this out, when will the fed raise interest rates.


Not for a while.

What you heard there was important.

It was a focus on outcomes and, in particular, holistic outcomes.

We have transitioned in the forward policy guidance.

It got calendar based and then it got linked to one objective.

It has now moved to a much more holistic way.

It is a bigger view of the labor market.

Particularly the inflation may be to know -- too low.

It is important to transition to something more holistic in terms of out approach.

Before, it was a school-based approach.

We have clarity on that.

Given the secular stagnation argument, given china's slowing down, giving europe and everything else, they will not raise rates for a while.

The market is going to romance different path because we have become outcome based as opposed to school-based.

That is important as to how much you as an investor would be rewarded.

How is it some fed officials believe we could see a tightening by the end of the year and early next year?

There are different views of how the economy functions.

People believe we are close to lift off.

Certainly, the u.s. economy is healing and getting better.

People believe we are nearing a critical mass.

If we get there and you trigger all of the cash, for it to come in as investment in equipment and hiring, you can get there.

Those who believe we are very close to that happen to also be in the fed, and those who believe, no, we are not, we are not there.

We are getting better but not getting liftoff.

You'll hear all sorts of views.

The reality is no one knows for sure and we will have to look at the data closely.

We spoke earlier with venture, the chairman and ceo of dow chemical, who has been very last this yell of a public company, that china -- the slowdown will continue in china.

He is out -- not optimistic quite yet.

You wrote a recent bloomberg view column as well.

He said focusing on gp is not a good way to look at the of.

It is intermediate objective and not final.

The gdp number is too partial.

Second, it is not very accurate.

It does not capture what is going on the ground.

It tells us very little about what is going on.

The number that was printed, 7.4%, is the lowest in a year and a half.

Two reactions, those who are bearish on china qc china is slowing down.

Those bullish on china, uc china is soft landing.

That is what you need.

The number itself does not tell you much.

Both are looking for slowdowns.

You are looking for a slowdown.

The question is, does it stabilize or go further down because there are imbalances, especially on the credit side.

We need more data to be definitive about that.

Class how to we figure out what policymakers will do if it is not looking at gdp?

They look at a whole range of indicators, whole range.

They continuously learn on china and one of the things they written about is how to make the decision-making process explained.

It takes place through anonymous -- enormous learning.

Over there, policymaking is very dynamic in terms of the data coming in.

Believe me, i expect they look at a lot more than just gdp.

They have a whole range of numbers that go into their decision-making numbers.

Class you saw gdp numbers worse than expected, it might actually turn out to be a positive for china?

This economy is soft landing, forget the nine percent growth rate.

It is only because the size of the economy is so much longer that over time, history shows as it gets larger, the growth rate tends to go down.

The critical thing is for them to deal with some of the imbalances particularly on the credit side.

They know they have to pivot from an old and increasingly exhausted growth model based on exports to a new model based on domestic demand.

That new model will generate less growth.

Hang on.

We will be back with you in a few moments.

Back with some final thoughts.

? we are back with mohammed, his first television interview since leaving the firm.

You were saying earlier to us it was time for you to leave pimco anyone who's for other opportunities.

You mentioned you just signed a book deal with random house and are continuing to roll as the chief economic advisor.

One of the things, you mentioned how it is something you do not pay as much attention to.

I'm not talking about social media.

You are now discussing how task -- how tech can disrupt the industry.

It is by quintess.

It happened that a local tech entrepreneur, his daughter is with my daughter in a theater group.

He was talking to me about what was -- he was doing and i got interested.

It is exciting.

Combining entrepreneurship with behavior finance, with finance experts.

They're trying to improve the financial experience, especially for those who are not well served by the firms.

Basically means lending clubs, battle came -- better payments, what they're trying to do is democratize finance for low-income people and reduce the massive margins people face.

I realize it was the same thing on the media.

You get the technology disrupted that creates new platforms, that reduces axis -- access barriers and lowers costs.

It can either go a good way or that way.

As we saw 10 years ago.

It is an exciting element and something new to me.

His firm payoff is incredible.

I've learned a tremendous amount about how technology can improve the consumer experience for the return -- research sector.

I am excited about what they're doing in learning more about that world.

I have wonderful discussions with the titans in this world.

They are just opening up my eyes to a world i should have known more about and i did not.

It is exciting element of having more time and more flexibility.

Class have you fielded offers for people, to be their advisors at all?

I will not comment on that.

The critical issues all the people out there that have incredible ideas, i find it interesting to combine these different elements.

This is an exciting time.

A very unsettling time if you happen to the media but an exciting time for the consumer and also the producer because platforms are being democratize and that is really important.

I have made all sorts of silly mistakes on twitter.

I love when people reach out to me and say, why did you use a #? people have been really helpful.

Thank you so much for joining us.

The former pimco ceo and chief economic advisor.


This text has been automatically generated. It may not be 100% accurate.


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