All the King’s Horses

"Bond King" Bill Gross abdicated the throne of the empire he built to avoid a revolution. Gross' behavior has tilted toward the odd since the peak in Fed QE/LSAP activity. The ElErian departure was only Act II.

Rumors are now flying that the Stamp Collecting Cat Lover will take the other side of PIMCO's massive positions for his new firm. The reality is most traders that find themselves in new employ, or trading their PA, reload the position that got them into trouble - often with great result.  Just ask Jon Corzine.

We predicted early in 2014 that the King's reign was over and a fall was coming. Obviously, we thought it would be Mr. Market that would lead the revolt. Instead, it was a series of weird communications and office jag-offity. We don't see the Janus job working out. The next headline is the exiled Bond King takes his massive wealth, his bonds and his new cat to the beach and retires.

One thought on “All the King’s Horses

  1. michael swyter

    Meh. Rumors after the fact would make me think twice about keeping money at Pimco. El Erian is a really smart guy who made his name at Harvard when it was frankly easy to make money. There are a lot of smart guys who aren’t good traders, and his over reliance on tv (if you can call cnbc that anymore) appearances to explain lackluster results makes me think he’s in that category.

    Mr. Market is still going to carry out a lot of bodies, wouldn’t surprise me if both Pimco and Janus suffer.


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