The New Report On Bill Gross Is The Most Embarrassing One Yet, And It Makes Him Sound Paranoid

The reputation of legendary bond investor Bill Gross continues to take blows.

This is a story that’s been building for a while, but is crescendoing right now.

First it started with his underperformance as a fund manager, getting the last leg of the bond rally spectacularly wrong.

But getting a call wrong isn’t in itself that big of deal.

Things started taking a turn for the worse in January when news came out that PIMCO’s former co-CEO with Gross, Mohamed El-Erian, was leaving the firm. At first this was plausibly chalked up to normal differences or El-Erian wanting to do something else. Then it came out in the Wall Street Journal that there had been serious clashes between El-Erian and Gross, and that Gross had insulted El-Erian in front of colleagues, while referring to himself as “Secretariat.”

But again, even this story could be ascribed to the natural existence of big tensions and egos at a massive, important firm.

But the new shoe that just dropped makes Gross look even worse.

Jennifer Ablan at Reuters quotes Gross as saying things about the El-Erian feud that make him sound angry and paranoid.

According to Ablan, Gross said that Mohamed El-Erian is trying to “undermine” him and that El-Erian “wrote” the Wall Street Journal story. When Reuters pushed back on this assertion, Gross accused Reuters of being in the tank for El-Erian, too, and then suggested that he had been spying on El-Erian’s phone calls:

When asked if Reuters could see the evidence about El-Erian and the allegation he was involved in the article, Gross said: “You’re on his side. Great, he’s got you, too, wrapped around his charming right finger.”

He said he knew that El-Erian, who had been widely seen as the heir apparent to Gross but is now due to leave in mid-March, had been in contact with Reuters as well as the Wall Street Journal.

Gross indicated he had been monitoring El-Erian’s phone calls.

PIMCO later denied that Gross had made those statements to Reuters, but admitted that it keeps records of employee phone calls.

Bottom line: The biggest bond manager in the world has gone from having a tough run in performance to a terrible run in the press.

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