How Will Pimco Drama Play Out With Investors?

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March 10 (Bloomberg) -- Bloomberg Contributing Editor Bill Cohan examines the aftermath of Mohamed El-Erian’s departure from Pimco on Bloomberg Television’s “Market Makers.”

To look at mohammed's hand.

What is going on here?

You read the story in reuters and you think bill has gone off the deep end.

Erik, i think finding a successor for bill gross has been a decades long endeavor for many people.

Not quite like finding a successor at berkshire hathaway.

It has been in intrigue for a long time.

When you have somebody that was that accomplished and that successful, to find a successor is not easy.

Especially when he controls so much of the corporation.

You get mom it a lot --mohamed el-erian.

Then you have a major falling out.

That makes investors very nervous.

People get angry about how they are perceived in the media.

Connect to you how i feel?

Two weeks ago, when this began, i felt that for bill gross.

He is this giant guy.

You cannot necessarily expect him to be on his best behavior.

If you took a snapshot of george soros, the way these guys have made the money they have -- demo, bill ackman -- not by being friendly.

You know that going in.

Two weeks ago, i understood this.

Since then, bill continues to put us up in the media.

What is he doing?

Why doesn't he pulled back?

He does not need to put himself out there.

He can say i am bill gross, look at the business i made.

Or i said what i'm going to say and i'm moving on.

It is pr 101. i never understand why these high-powered successful businessman make a mistake when it comes to pr 101. this is clearly an opportunity where less is more and he should have stopped talking about it.

Let their statements stand.

Even though it may or may not have been true, there was an article that was very good in the wall street journal.

I begin to show that there was more intrigue to the split.

Who cares if it was true?

That is not true.

The consultants, the mandarins of the pension fund industry -- they're looking for something to write about.

They advise on asset allocations.

They're telling them, do i invest with pimco or blackrock?

If they get turned off by this, if they believe that what is going on at pimco undermined gross' or the firm's ability to deliver returns -- if he is delivering great returns, they will not care.

One issue is that there does need to be a successor to bill gross.

When you have somebody of mel -- mohamed el-erian's caliber , someone of that caliber --than they have a falling out, that bothers people.

That makes tubal morass.

Number two, the bond market is headed for a rocky period.

When quantitative easing is starting to end, when they're pulling back that demand from the bond market, prices have one place to go.

That is down.

If you are a big on the master, how do you mitigate those gold?

I agree with you all heartedly.

We found something we can agree on.

It is the result of the potential for bad results that have people spooked.

That, on top of, bill gross probably will not live forever.

If the bond market is headed for such a bad road, stop having interviews with everybody and their brother and go back to work.

Because bill wants to persuade the world that he has figured out how to continue being the bond market.

He has the best record in the bond market all through the bull market treasuries.

With help from the fed.

Major-league help from the fed.

Now he has to figure that out.

I agree.

He wants people to agree that he has the secret.

Why doesn't he keep it a sicker?

-- secret?

People do a lot of advertising.

Alliance owns pimco.

They should tell him to tone it down.

He should know to tone it down.

He should know to figure that out.

Whatever reason, people get their egos involved and they want tit for tat.

These are difficult times.

I would think so.

Hold on, as far as sympathy -- i just try to explain his behavior.

It is tough.

He will continue to be well paid.

How he navigates, will be very telling.

It is not a time for anybody to focus solely on the bond market.

He has been in a very special position, running pimco.

He could run that place anyway he wants.

If you want to live in newport beach, california and he went to be in the investment world, that is one of the only places you can go to work.

. no one is going to cry tears for bill gross.

He has a wonderful life and a wonderful job in a wonderful business.

He just has to figure out how to get a successor in there to navigate.

Sorry your bosses mean to sunday's. stop talking to the media.

We agree.

Your glasses look great.

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


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