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"You Can't Fire Me, I Quit" - PIMCO Was Preparing To Fire Gross

Tyler Durden's picture




 

With more than $65 billion pulled from PIMCO's funds since May 2013, Bill Gross' firm had been struggling amid spotty performance and it seems, according to The Wall Street Journal, PIMCO (not Allianz) was set to fire the 70-year old bond king this weekend. It seems clear that Mr. Gross move was pre-emptive as sources cite his "increasingly erratic behavior" and ultimatums as factors in the move. Assumptions about Mohamed El-Erian returning to run the company have been denied. Some have estimated PIMCO could see a further 10-30% in fund outflows on the back of Mr. Gross' departure.

As The Wall Street Journal reports,

Pimco has suffered recently as Mr. Gross has seen investors pull more than $65 billion from his fund since May 2013 amid spotty performance.

 

Pacific Investment Management Co. was going to fire its founder, Bill Gross, before he announced his Friday resignation, people familiar with the matter said. Pimco said it would announce a new portfolio-management structure later Friday, those people said.

 

Allianz commented... "While we are grateful for everything Bill contributed to building our firm and delivering value to Pimco's clients, over the course of this year it became increasingly clear that the firm's leadership and Bill have fundamental differences about how to take Pimco forward."

 

...

 

In a separate, joint statement July 7, members of the executive committee said it never took up the matter of Mr. Gross leaving. The committee called Mr. Gross a "vital leader" and "an extraordinary asset for our clients."

Fund outflows to continue... (via Bloomberg)

Gross’s exit shows Allianz not best Pimco owner, too late now for Allianz to do IPO of Pimco and asset outflows of 10%-30% possible, Bernstein says in note after Bill Gross announces move to Janus Capital.

*  *  *

  • *EL ERIAN WON'T BE NAMED TO REPLACE GROSS AT PIMCO: BLOOMBERG TV
 

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Fri, 09/26/2014 - 10:35 | 5259546 FieldingMellish
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Sounds more like a reason to join PIMCO rather than leave... if one were so inclined.

Fri, 09/26/2014 - 10:44 | 5259568 buzzsaw99
buzzsaw99's picture

pimco's clients can't win in this environment because pimco KEEPS ALL THE GAINS FOR ITSELF. the losses on the other hand...

Fri, 09/26/2014 - 10:53 | 5259603 NoDebt
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OK, so let me get this straight.  Yesterday the market "plummets" 250 Dow points and it was probably because some hedge fund let 4 of their traders go and liquidated their holdings (earlier ZH article).  

Now, Gross is out at Pimco and they expect outflows of a further 10-30% of their AUM (on a 2 TRILLION dollar portfolio) which means positions MUST be liquidated to cover the redemptions.  AND, SO..... the effect on the market is, of course, nothing.  Up 60 points.

Somebody's wrong.

Fri, 09/26/2014 - 10:55 | 5259605 FieldingMellish
FieldingMellish's picture

PIMCO is bonds.

Fri, 09/26/2014 - 10:58 | 5259610 TheAnalOG
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Was seeking alpha.... found pink slip instead.

Fri, 09/26/2014 - 11:22 | 5259702 NoDebt
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I know that.  But these things all link together.  And what's the action in the bond market?  Again, nothing.

Fri, 09/26/2014 - 11:30 | 5259729 Dr Strangemember
Dr Strangemember's picture

I'm guessing the FED is buying all of PIMCO's liquidation inventory.  That basically = no market change.

Fri, 09/26/2014 - 10:58 | 5259619 OneTinTrooper
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The article never says whether the outflows are expected to go into other BOND funds.

Fri, 09/26/2014 - 11:29 | 5259724 Dr Strangemember
Dr Strangemember's picture

We're talking fixed income dude, not equities.  (sigh)

Fri, 09/26/2014 - 12:23 | 5259916 ThroxxOfVron
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"OK, so let me get this straight.  Yesterday the market "plummets" 250 Dow points and it was probably because some hedge fund let 4 of their traders go and liquidated their holdings (earlier ZH article).  

Now, Gross is out at Pimco and they expect outflows of a further 10-30% of their AUM (on a 2 TRILLION dollar portfolio) which means positions MUST be liquidated to cover the redemptions.  AND, SO..... the effect on the market is, of course, nothing.  Up 60 points.

Somebody's wrong. "

 

You have forgoten or are discounting The FED.

The FED will and likely is buying what PimpCo is selling.

IF the movement of the assets cannot be seen in volume on the public exchanges then it is being engineered in the Dark Pools or via nice quiet old-style over the counter sales.

THe LAST thing that the Administration and Congress want is a disorderly liquidation and cascade selling eruptiing just weeks before the fucking mid-term ELECTIONS.

Fri, 09/26/2014 - 14:04 | 5260396 john.smith
john.smith's picture

I'm sure many clients will just transfer their positions

Fri, 09/26/2014 - 10:56 | 5259608 Stoploss
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When they go to this much trouble to demonize him, is a direct indication of the trouble he faced within PIMPCO.

This is a classic run-off situation.

They run him off, to try to cover their asses. 

The FED is behind this and no other...

Fri, 09/26/2014 - 10:52 | 5259600 Berspankme
Berspankme's picture

I smell an Egyptian magician

Fri, 09/26/2014 - 11:32 | 5259736 Dr Strangemember
Dr Strangemember's picture

Ouch, that ain't a good smell!!!!

Fri, 09/26/2014 - 11:06 | 5259647 junction
junction's picture

With first Holder resigning yesterday, then Gross taking a hike today, that means the next person to quit who is even higher up on the food chain should be. . .the Man from Kenya, Barack Obummer. 

Fri, 09/26/2014 - 11:15 | 5259678 FieldingMellish
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If you want to go higher up the chain, POTUS is the wrong direction.

Fri, 09/26/2014 - 11:40 | 5259771 williambanzai7
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Fri, 09/26/2014 - 12:44 | 5260003 Baldrick
Baldrick's picture

I really, really like this one. It is perfection.

Fri, 09/26/2014 - 10:37 | 5259551 buzzsaw99
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pimpco gets 1.5% of aum for underperforming the us 10y. nice work if you can get it. crooked ass pension fund managers. where are the customer's yachts?

Fri, 09/26/2014 - 11:03 | 5259584 greyghost
greyghost's picture

.

Fri, 09/26/2014 - 10:51 | 5259593 Milton Waddams
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"where are the customer's yachts?"

That's one of my favorite stories when I tell people about the rank corruption and avarice on Wall Street.

BUT WHERE ARE ALL THE CUSTOMER'S YACHTS?

Fri, 09/26/2014 - 12:26 | 5259929 ThroxxOfVron
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"pimpco gets 1.5% of aum for underperforming the us 10y. nice work if you can get it. crooked ass pension fund managers. where are the customer's yachts? "

EXACTLY.

Your money?  Looks like it is being held hostage if it is...

 

Now, IF EVERYONE parked in the PimpCo rip-off went for the exits right now today...  

Fri, 09/26/2014 - 10:39 | 5259553 NoDebt
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When your top guy (Gross) goes batshit crazy, you make changes.  

Fri, 09/26/2014 - 10:57 | 5259612 Honey Badger
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Unless you are the U.S.A.

Fri, 09/26/2014 - 10:38 | 5259554 syntaxterror
syntaxterror's picture

Mohamed El-Erian is perceived as Billy's little bitch, so it's doubtful he could ever return.

It's all about power and intimidation amongst the pathological scammer crowd.

Fri, 09/26/2014 - 11:35 | 5259753 Duude
Duude's picture

El-Erian isn't even a bond manager. Equity manager

Fri, 09/26/2014 - 10:42 | 5259565 Downtoolong
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PIMCO Was Preparing To Fire Gross

You didn't need to tell people here. We figured it out. We know.

But, the really sad fact is that most who only read the MSM will never know or figure it out, because, they wi'll never hear it reported there.

 

 

Fri, 09/26/2014 - 10:44 | 5259574 NotApplicable
NotApplicable's picture

Just another conspiracy theory turned fact.

 

Fri, 09/26/2014 - 10:44 | 5259570 Bell's 2 hearted
Bell's 2 hearted's picture

good riddance

 

Gross complete moron when he tried to "short" Treasuries a couple of year ago.

Fri, 09/26/2014 - 10:45 | 5259571 NeedleDickTheBu...
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So PIMCO needs a "top" bond guy to replace Gross?  I think the Ben Bernanke is looking for work and he had $4.5 trillion AUM at his last gig.

Fri, 09/26/2014 - 10:48 | 5259586 NotApplicable
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I don't see him pulling off the talk show circuit. That fatal lip quiver dooms the facade.

Fri, 09/26/2014 - 10:47 | 5259578 Spitzer
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Maybe Bill can focus on getting that rag out of his throte now

Fri, 09/26/2014 - 10:51 | 5259580 JustObserving
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Pimco made billions while Greenspan worked for PIMCO.  The performance floundered when Greenspan left.  Fraud is the shortest way to profits in the land of the free:

How Pimco Shook Hands With The Fed — And Made A Killing

http://www.businessinsider.com/how-pimco-shook-hands-with-the-fed--and-m...

Greenspan Helped Pimco Make Billions, Gross Says

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4oMb1upKEYY

Fri, 09/26/2014 - 10:47 | 5259587 Theta_Burn
Theta_Burn's picture

Amazing how some just don't want to enjoy life..

Bill Gross (70yrs. old) probably in the beginning stages of alzheimers, but needs to relocate, and show up at the office every morning. I mean after the first billion, whats the fucking point?

Fri, 09/26/2014 - 10:52 | 5259599 syntaxterror
syntaxterror's picture

Criminals never quit until they're caught.

Fri, 09/26/2014 - 10:59 | 5259615 Milton Waddams
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Right? It must be a sickness. A normal person might hang'em up and become a gardener or something; instead this poor fool, after accumulating what has to be hundreds of millions of dollars, still feels a need to prove himself. Oh well, maybe in the next life, Billy-boy.

Fri, 09/26/2014 - 11:01 | 5259629 Theta_Burn
Theta_Burn's picture

Hes worth almost 3 billion....

Fri, 09/26/2014 - 11:13 | 5259672 syntaxterror
syntaxterror's picture

$3 billion won't last long for Billy's retirement when you gotta CNTL+Print for a $500 trillion derivative implosion.

Fri, 09/26/2014 - 11:24 | 5259700 Theta_Burn
Theta_Burn's picture

Thats his personal wealth..

None of these guys will ever be liable for any implosion whether accidental or criminal...

See Jon Corzine...

WE are the only ones liable..

Fri, 09/26/2014 - 11:32 | 5259738 Duude
Duude's picture

No, Jon Corzine escaped prosecution because he was an active Obama campaign bundler. 

Fri, 09/26/2014 - 11:38 | 5259766 Spitzer
Spitzer's picture

Good point Theta. Bill has no life. He hears that alarm clock and gets his coffe and heads to the office .

Fri, 09/26/2014 - 12:50 | 5260034 Baldrick
Baldrick's picture

he doesn't live, he merely exists.

Fri, 09/26/2014 - 13:07 | 5260117 Dave Thomas
Dave Thomas's picture

HEY, don't knock Billy! He's got one hell of a stamp collection!

Fri, 09/26/2014 - 14:11 | 5260449 Leonardo Fibonacci2
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"Amazing how some just don't want to enjoy life..

Bill Gross (70yrs. old) probably in the beginning stages of alzheimers, but needs to relocate, and show up at the office every morning. I mean after the first billion, whats the fucking point?"

The guy is 70, his wee wee is shrunk and dried up, his prostate is enlarged like a watermellon, he can't fuck anymore unless he takes viagra but he has a weak heart (catch 22),  hookers and blow ain't the same anymore, erectile disfuction haunts him......... that is why he goes to work, so he can take his mind off of the pain!

 

 

Fri, 09/26/2014 - 10:47 | 5259588 SheepDog-One
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Now if we could just apply this to our own political class and media and fire them for their increasingly bizarre behavior.

Fri, 09/26/2014 - 10:48 | 5259592 taketheredpill
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So Long JNS Short AZSEY then? Pimco can only fall and JNS can only rise (assuming even a fraction of aum follows Gross)?

Fri, 09/26/2014 - 10:56 | 5259607 OneTinTrooper
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Bill Gross was one of the few that publically discussed the scale of QE that we were going to see before the MSM even knew what QE was.   I have no problem with Bill Gross.  And I could care less whether he needed to change jobs or not.  

Fri, 09/26/2014 - 10:58 | 5259620 Theta_Burn
Theta_Burn's picture

Agreed..

For somebody that was "in the club" he sure fucked with the club owners alot.

Fri, 09/26/2014 - 11:41 | 5259778 Spitzer
Spitzer's picture

Yup.

Fri, 09/26/2014 - 10:57 | 5259613 Al Huxley
Al Huxley's picture

WTF?  Is today PIMCO/Bill Gross day on ZH?

Fri, 09/26/2014 - 11:01 | 5259634 OneTinTrooper
OneTinTrooper's picture

ZH apparently has a lot of Wall Street wanna be types floating around.  Talking about whose who and what is happening to them.   I really don't give a crap.

Fri, 09/26/2014 - 10:58 | 5259621 Yellowhoard
Yellowhoard's picture

Say what you will, Gross is not crazy.

Suggesting that he is crazy is sleazy beyond belief.

I hope the Germans lose their asses on this one.

Fri, 09/26/2014 - 11:02 | 5259635 Theta_Burn
Theta_Burn's picture

Hes not crazy... hes old.

Fri, 09/26/2014 - 11:17 | 5259688 ajax
ajax's picture

 

 

The death of his beloved but aged cat Bob hit him real hard. Gross hasn't recovered from it yet. As long as he stays at Pimco everything in the office will remind him of Bob.

We respect you Bill and we feel your pain.

signed,

World Cat Lovers

 

Fri, 09/26/2014 - 11:27 | 5259720 Duude
Duude's picture

I seriously doubt Bill Gross was scheduled to be fired. That's absurd! Why? While his total return fund has had a few off years, he's been running it for 44 years and is head and shoulders above his competitors for most of that time. Even Warren Buffet has had a few off years.  While his fund has seen redemptions recently, its had periods of redemptions before. The fund still has over $220B which wasn't built up overnight and wasn't going to redeemed overnight either. Plenty of institutions know fund managers will have dry spells, but the good ones will survive over the long term. No, the big loser here is Allianz. They can now expect to lose tens of billions over the next few months, while Janus Capital is expected to win over some of that redeemed $$$. 

Fri, 09/26/2014 - 12:44 | 5260007 Canucklehead
Canucklehead's picture

All you need to do is look at share price activity for Janus and Allianz. The markets have spoken.

PIMCO's actions (and this article) is an poor attempt at damage control. PIMCO is acting like a spoiled girl who has been jilted. It's the old "I left him, he didn't leave me" story.

Fri, 09/26/2014 - 11:52 | 5259804 LostAtSea
Fri, 09/26/2014 - 12:12 | 5259875 MrVincent
MrVincent's picture

I dont know what happened to Bill Gross over the last few years. I DO know that in the 2006 timeframe he was warning everyone about the housing bubble and nobody would listen.

Fri, 09/26/2014 - 12:26 | 5259924 Iam Yue2
Iam Yue2's picture

May he rest forever on a bed of nitroglycerine.

Fri, 09/26/2014 - 12:45 | 5260016 Seal
Seal's picture

Goethe - “True genius is knowing when to stop.” This dude is too OLD

Fri, 09/26/2014 - 13:56 | 5260356 Cheduba
Cheduba's picture

He started acting erratic...

Does this mean the old school power elite are starting to panic as they realize their power structures are actively crumbling around them as decentralization accelerates?

Fri, 09/26/2014 - 15:18 | 5260814 teslaberry
teslaberry's picture

THE MARKET IS THE FED THAT IS ALL. QE IS NOT OVER. THEY WILL LET THE MARKET CRUSH 10% OR MORE AND BRING QE4. AND THEN PEOPLE WILL BITCH AND MOAN. OR THEY WILL USE A BACKDOOR QE AND BUY THE STOCK MARKET USING THE EUROPEAN 'SHELL COMPANIES'.

IT WILL BE AN OPEN SECRET. A BIG LIE . AND CNBC AND WSJ AND EVERYONE WILL GO ALONG WITH IT AS USUAL.

BLABLABLA....

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