Whoa, awkwar. PIMCO’s Chief Investment Strategist Mohammed El-Erian was on CNBC this morning, and he did not like the insinuation that his firm was one of the Treasury’s “Chosen Ones.”
Even though PIMCO is one of the primary beneficiaries of the PPIP, and it’s the stated strategy of Bill Gross to “shake hands with Uncle Sam”, it’s crazy to suggest that PIMCO occupies some special role in the eyes of the Treasury.
Here’s the transcript, courtesy of TPMMuckraker, though you should watch the video (below) just to see how awkward it is. The good stuff starts around the 7:50 mark, so skip ahead.
GABELLI: So what? If you take three or four years of slow steady recovery. So you don’t have a rapid increase and the Fed can adjust to all this stimulation they’re putting in the system and they don’t make the miscalculation of 1923 in germany…this is good! if the Dow does nothing for five years, who cares?
AL-LARIAN: How many investors are still in the game if the dow does nothing for four years?
You know, you guys put a wonderful competitive restraint, with this PPIP…
AL-LARIAN: Who’s ‘you guys’?
GABELLI: The fewer the better! The fewer the better! Many can come into the business…
GABELLI: Those big five companies that have been anointed. [Ed note: PIMCO and four other large money managers reportedly consulted with Treasury to draw up the PPIP, although Gross was the most prominent money manager involved not affiliate with an investment bank.]
SQUAWK BOX ANCHOR CARL QUINTANILLA: You know, the “chosen ones.”
AL-LARIAN: I’m not sure who’s chosen whom.
GABELLI: Yeah yeah, you need a ‘certain scale.’ But who set up those rules? The guys with the scales.=
GABELLI: Oh, right….