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Mohamed El-Erian Finally Breaks The Silence On Gross' Departure: "I Was Very Surprised"
It has been a week since Bill Gross dropped a tape-bomb on the fixed-income market and walked away from the firm he founded decades ago. Since then the world and their pet rabbit have commented (most notably David Tepper's "who cares?"); but one man has been markedly silent... until now. In an interview on Bloomberg TV, former PIMCO Co-CEO Mohamed Al-Erian told Betty Liu that Bill Gross' "departure - the fact that it happened and how it happened - was a surprise."
Brief interview here:
Full Transcript:
BETTY LIU: Well for more reaction on the jobs data I want to bring in Bloomberg View columnist and former PIMCO CEO, Mohamed El-Erian, who joins us a little jetlagged from London. Mohamed, great to see you this morning. Look, you went through the jobs report yourself. And how do you think the Fed is going to interpret this? Does this at all change Janet Yellen's schedule on interest rates?
MOHAMED EL-ERIAN: I don't think so. It is the mirror image of the report we talked about a month ago. This time around it is the headline numbers that are really encouraging. If you add the job creation plus the revisions you're looking at almost 320,000 new jobs. That's taken the three-month average to 224,000. That's really good. And the unemployment rate is down.
But on the other hand, the internals this time around are less encouraging, particularly long-term unemployment stuck at three million, youth unemployment up to 20 percent, and of course the participation rate is coming down. So net-net this is a mixed report. And the most disappointing aspects, Betty, is one that you've been talking about for the last half hour, which is wage growth. Wage growth simply is not there yet.
LIU: It isn't there yet. And do you have any further clarity or explanation as to why? With the labor market tightening we haven't seen wage growth escape at all.
EL-ERIAN: I think this is a different economy. And I think people are starting to realize that this is a different economy. In addition, little steps that should be taken, the minimum wage, et cetera, are not being taken. And that's part of a bigger problem that we don't have a holistic policy response as yet because of the polarization of Congress.
LIU: And given that, we've seen, Mohamed, more market volatility, right? Do you expect that if we continue to get numbers like this where it kind of shows a mixed picture that this volatility is only going to increase?
EL-ERIAN: I think volatility will increase, Betty, but for a different reason. We are living in a world in which the main policymakers, the central banks, have gone from a multispeed world, where they were doing the same thing but at different speeds, to a multitrack world where they're doing different things. And the result of that is that currencies are on the move. And when currencies move sharply they tend to transmit volatility to other markets. And that's what I think we're going to see more of looking forward.
LIU: And speaking about volatility, Mohamed, if I may change topics for a moment, of course we've seen a lot of volatility at your former firm, PIMCO. This is the first time, Mohamed, that you and I are speaking and you're speaking anywhere really about PIMCO since Bill Gross left a few weeks ago. He started his job at Janus. Were you as shocked as everybody else with Bill Gross leaving PIMCO?
EL-ERIAN: Yes. I was very surprised, but what I wasn't surprised about, Betty, is that they were able to draw on a very deep bench of talented people who have established track records, who have industry awards and who have been part of the process. They've been managing more than 80 percent of the assets at PIMCO.
So Bill's departure, both the fact that it happened and how it happened was a surprise, but what wasn't a surprise was the incredible bench and a very strong team led by Dan Ivacsyn. I've worked with these people. I know them really well. They are superb and Dan Ivacsyn is superb as a leader.
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Everything is approved for public consumption. Surpised my ass. We all know rates are going lower, much lower. El-Erian wants his turn at "bond fund king".
same as it ever was.
as much as I hate to say it....gonna go with Tepper on this one.....primarily because I agree with your assertion of "surprised my ass"
It's a club, and has been for quite some time.
So there you have it. Any topic, any time, any way you want to look at it, things be just grand!
He's just another clueless doofus.
The Hum-ant colony collapse disorder is the result of government actions, not the absence of government actions.
The only possible way for government to fix anything is to wither away and die.
That's not what he said, he said
"I wath berry thurprithed!"
Were'nt there three stooges?
El Erian, Gross and..
Who was the third guy again?
You mean Paul McCulley?
Corzine
Ponzi
...and Goonlach. Really, if you met Gross, El Erian and Gundlach at summer BBQ, would you talk to any of them? All a bit odd don't you think?
allah akbar
They have industry awards! So it's gonna be A-OK!
I was a little bit worried before but uncle Mo has given me the reason to sleep soundly again.
I think he laughed a little bit too....and did that Mean Gene the Dancin machine dance around his office
Effing oligarchs...both of them!
I always thought El-Erian was the Israeli national airline :/
The moustache is a Mossad disguise
Aye, laddie. Tis terribly hard gittin' a used a them sheep after the camels, ya, know!
Two kingpin Bond peddlers hit the road for higher ground.
/ sarc
"In addition, little steps that should be taken, the minimum wage, et cetera, are not being taken."
Lower prices help consumers, not higher ones. They all have the idea that higher prices are good. It's good for them. Asset have inflated.
Speaking of two-faced Janus. I like how he talked about the good news, then undermined it completely with the actual details, yet never connected the two.
Especially when he could've summed up the whole problem in one word, "malinvestment."
Why should anyone expect a financialized economy to produce wage growth in non-financial sectors? Let alone these alleged economic geniuses that supposedly understand this shit.
OK, ok, enough about Gross already - can't we get a story here about what's happening with Jay-Z and Beyonce? I mean, fuck, why do I have to search for the important news?
What happened to Beeber..the disco kid....and is Michael Jackson dead?
still dead sir...will there be anything else or should I send in the girls?
"able to draw on a very deep bench"
That old chestnut...does anyone not use this cliché these days?
cliché-- what is the plural, cli-chaise? as in "Relax, everything is going great. Now go take a nap in your chaise."
Words that mean nothing except to convey a pleasant feeling and thought process. Nothing to see here.
Pimco's going to go bust and take the markets with it.
"markets" --- LMFAO...
LOP, you have a lot of Depth.....
Take that to the Next Level:
It is their very Arrogance that "they" can Control "Mr. Market" that will bring it all down.......
"Control" is an Illusion........
"No Man is Bigger than the Market"
"Extraordinary Popular Delusions c. 2014"
This is the "Greed Equilibrium"
The other "Factors" are Incidential and Inclusive.....
"Same as its always been"........
Tell your friends I don't want a lot. Just enough to wet my beak. [/Don Fanucci]
It's Friday. Be honest. Who the fuck cares about these billionaires.
Fart if you do. Fart twice if you don't.
Feel better?
We were all surprised, we're super cereal.
Haven't got time to watch the whole thing..
Anyone know what time to fast-forward to , to see the free-fall collapse of that skyscaper in the background? tia
(Anyone else notice that the video looks uncannily like a thinly disguised Barry O being interviewed by a tarted-up Michelle?)
How much did PimpCo really leverage before they needed to pull the card table, three shells w/pea, and a shoebox full of cash?
Run Forrest Gump, run.
My name is Ed Whitacre, I don't know shit about the car manufacturer business. We have been given a sweet taxpayer bailout to fuck over the bond holders.
Sound familiar?
ren El Erian Finally Breaks Silence...
More like "El Erian Finally Breaks Wind" judging by his pained expression and then look of relief starting at the 11second mark.
el erian ratted gross out for window dressing. he even looks like a rat. they all do this shit. pimco will be the next janus--not relevant. a day of recokining will be coming for the crooked world markets.
Who gives a fuck what this Affirmative Action hire has to say ?
Time to pull the plug on pimpco.
"Sur-prise, mutha fucka!"
It is hard to believe that out of this great nation sh.t heads like El-Erian, Obama, Bidden, Pelosi, Reid, Rangel ... rise to the top.
The only anology I can think of is of scum in a septic tank.
"The New Different" same as the old different and Arby's is different... ergo Different is Good.