re: Update pg 23: Russia,IMO, will default on its sovereign debt within six months

They'll sell Iran a ton of war stuff, until Iran burns through that 150B. Seem like that would help. Hell, Boeing is set to sell a bunch of Airliners. But it don't look like oil will go up until there is all out Sunni v Shia war in the ME and the Gulf gets whacked, or the European Economy shows that it can remain viable and grow despite the Muslim invasion.

You can continue to pretend my statement about Gross' causing PIMCO severe financial problems because of massive funds outflows from his bond funds isn't true but that only shows you've got a hidden agenda.

Gross' funds were performing so poorly the last few years of his managing them at PIMCO that withdrawals from those funds had reached a crisis point. PIMCO's management had made the decision to fire Gross but he got wind of his impending dismissal so he walked out before it could happen.

The poor fund performance, Gross' bizarre behavior towards the end (some speculate he was having a sort of mental breakdown), the SEC probe into how Gross' fund team priced assets in the funds and the turmoil of his abrupt leaving PIMCO almost ruined PIMCO.

I gave you several links earlier in this thread about Gross and how he almost drove PIMCO into the ground, but you ignored them. Why?

Here are some more....

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Last year’s departure of Gross, Pimco’s co-founder, extended a record period of outflows from its funds, already battered by low interest rates and mediocre returns. Assets in the Pimco Total Return Fund, which Gross managed, have plunged to $101 billion from a high of $293 billion in April 2013. […] “I think we have overcome the Bill Gross effect,” Wemmer said.

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LINK

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Gross, 70, is a co-founder and chief investment officer of Pimco, which manages about $1.97 trillion in assets. His Pimco Total Return mutual fund has suffered 16 straight months of redemptions as returns have trailed rivals and investors have turned away from traditional fixed-income strategies in anticipation of rising interest rates. Investors pulled a record $41.1 billion from the fund in 2013, and an additional $24.8 billion this year through August, according to estimates by Morningstar Inc. in Chicago.

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LINK

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A year after PIMCO co-founder and Chief Investment Officer William H. Gross walked out the door, the firm remains in recovery mode.
“When you see $200 billion go out of the door in one fund that gives us concern,” he said. “We want to hit the pause button and see how things work out.”

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LINK

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The surprising exit came after Mr. Gross learned in recent weeks that top executives at Pimco and Allianz, the German insurer that owns it, had grown tired of his leadership and were weighing a change.
Some executives were pushing for him to be removed as chief investment officer, said two people briefed on the matter. There was concern about his management style and that his increasingly erratic behavior — he appeared at a conference to give a speech wearing sunglasses and wrote an investor letter that was largely an elegy to his cat — was becoming a distraction.

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LINK

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Gross's exit, eight months after his top deputy Mohamed El-Erian quit amid acrimony, may quicken speculation in the bond market about leadership uncertainties and accelerating outflow at the world's largest bond firm.
Since the start of the year, investors have pulled $25 billion from the Pimco Total Return Fund, the world's largest bond fund, and $6 billion from the Pimco Unconstrained Bond Fund, according to Morningstar data as of the end of August.

Both were personally supervised by Gross, 70, who also oversaw the Pimco Total Return ETF, the object of the SEC probe.

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LINK

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Gross’s exit -- an event that, not long ago, would have seemed unthinkable -- unleashed a crisis that Pimco is still trying to contain.

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Fall of the Bond King: How Gross Lost Empire

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Pimco: Bill Gross Can’t Hurt Us Anymore

Mr. Gross' departure came after serious disagreements with senior management at his fund. The news comes as a surprise to many, and arrives shortly after allegations on PIMCO by US regulators concerning the controversial calculation of returns by one of its exchange-traded funds (ETFs).

CNBC's David Faber is reporting that PIMCO was going to fire Chief Investment Officer Bill Gross tomorrow due to "increasingly erratic behavior." -

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LINK

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Gross' funds were performing so poorly the last few years of his managing them
I've provided data earlier in this thread showing that is not true.

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His Pimco Total Return mutual fund has suffered 16 straight months of redemptions as returns have trailed rivals

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LINK

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Pimco presently manages something like $1.5 TRILLION.

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And in July, 2014 two months before Gross left ahead of being fired PIMCO's assets were $1.97 TRILLION.
LINK
But you seem to believe an investment firm can lose almost $500 billion (25%) of its managed assets without severe financial problems.

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No, it did not.

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false.

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they always were fine

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Your entire response boils down to "Nuh-uh."

If PIMCO was "always fine" why was its situation described as being "in a recovery mode" and having "unleashed a crisis" at the firm?

If it was "always fine" why did it have to recover?

Why was there a crisis at the firm?

Your denial of the facts is inexplicable and irrational.

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Gross' funds were performing so poorly the last few years of his managing them
I've provided data earlier in this thread showing that is not true.


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His Pimco Total Return mutual fund has suffered 16 straight months of redemptions as returns have trailed rivals

LINK

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As I LINKED many months ago, that talking point does not add up.

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But you seem to believe an investment firm can lose almost $500 billion (25%) of its managed assets without severe financial problems.

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That's right, I do. As you should be well-aware, financial services businesses have a massive amount of operating leverage. That's doesn't mean it's ever going to be GOOD news when AUM declines by almost 25%. But it certainly does not mean a firm managing $1.5 Trillion is "nearly bankrupt".

But the main reason I believe it is that it has been demonstrably true in this case. Pimco lost nearly $500B in AUM and a)doesn't have severe financial problems, and b)was never evens slightly close under any interpretation of reality whatsoever to bankruptcy.

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Your entire response boils down to "Nuh-uh."

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No, my response has been very detailed, has linked specific numbers and has referenced specific asinine claims of yours. You hear "nuh-uh" because you are evidently a sociopath.

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Your denial of the facts is irrational.

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Link to bankruptcy?

Link to "severe financial stress"?

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LSURussian

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Welcome back

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Your link relied upon Bill Gross and PIMCO announcing its funds had outperformed their own internal "benchmarks" NOT outperformed RIVALS. Gross was attempting to put lipstick on a pig.....

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WTF are you talking about? From the WSJ:

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The Pimco Total Return Fund has outpaced two-thirds of rival funds in the second quarter, a win for manager Bill Gross following a year of poor performance and investor outflows.

The $229 billion fund has posted a total return of 1.96% this quarter through Tuesday, reflecting price gains and interest payments.

That compares with 1.68% for its benchmark, the Barclays U.S. Aggregate Bond Index, according to data from fund tracker Morningstar Inc.

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Yes, they outperformed the Barclays Ag (which virtually every bond fund is going to be comparing themselves to as well.) But as highlighted, in his last quarter as manager, Gross was in the top 3rd of his peers.

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Customers don't give a flying flip about benchmarks.

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Well, they shouldn't, but they do. You're insane if you think they don't.

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They want to know that their money would not have experienced higher returns somewhere else.

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Yes, clearly.

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Are you so dumb you don't know the difference? Your point is invalid and just plain unintelligent. And smacks of desperation.

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Still waiting on your links to the bankruptcy and severe financial stress.

And all of this is set to the backdrop of you changing your argument over time. Anyone can go back and see the inanity you typed.

It really is pathological: in a thread in which you were given 2X the rope you originally asked for, your predictions were still very very wrong. And yet you have the arrogance to act as if your even MORE ridiculous claims STILL hold water? Sheesh.

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ONE QUARTER.

ONE QUARTER.

ONE QUARTER.

ONE QUARTER.

What part of "one quarter" makes you believe you're making a valid point??

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The point being: assets were on the rise at Pimco right up until Gross left. And even performance was doing better. Both contribute to the easy reality that the firm never came evens lightly close to "bankruptcy".

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No, they don't

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Yes, some of them most certainly do. Why do you think "tracking error" even gets reported on?

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I worked for an investment advisor for several years and my clients with any investment sophistication always wanted to know how we stacked up to the competition, not to the Lipper Index or any other "benchmark."

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Great. Not sure why you're making the casual assumption about all investors being "sophisticated". They demonstrably are not. And one way I've seen it demonstrated is in caring about things like benchmarks.

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Internal benchmarks are emphasized whenever the investment manager needs to obscure poor performance vs. the competition.

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Yes, that's one tool of obfuscation they have.

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What part of "in recovery mode" and "unleashed a crisis" in the links I posted above confuse you? Keep denying facts by continuing to shout "nuh-uh!!"

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What part of "businesses can take hits but never be anywhere near bankruptcy" do you not understand?

You have provided literally ZERO proof that a $1.5 Trillion asset manager ever came even remotely close to "severe financial stress" - much less "bankruptcy".

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The point being: assets were on the rise at Pimco right up until Gross left.

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You've just proven you're clueless about bond funds.

The rate on the 10 year US bond fell from 3.00% in January, 2014 to 2.05% at the end of August, 2014.

The 20-yr bond rates fell from 3.68% to 2.83% over the same time period.

The 30 year bond fell from 3.92% to 3.09%.

ETA: LINK

Bond values move inversely to market rates, therefore, the market values of the bonds held by PIMCO increased significantly between January and September, 2014 based on the decline in market rates for bonds.

Your own quote from your link above states, "The $229 billion fund has posted a total return of 1.96% this quarter through Tuesday, reflecting price gains and interest payments."

The link I gave above (dated 9/29/14) specifically says that PIMCO had experienced 16 months of client outflows (that means "withdrawals") due to poor investment performance by Gross and his team.

The value of assets under PIMCO's management increased due to the over 20% relative decline in rates in the 10-20-30 year bonds they held not because customers were putting more net funds into their accounts.

If rates had remained unchanged that year, PIMCO would have reported a huge decline in assets under management, probably in the $400 billion range (from the links I posted above) based on the reported net withdrawals by their customers.

What I've just taught you is something an undergraduate finance course teaches college sophomores. You're really wasting my time having to explain to you something that basic.

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You have provided literally ZERO proof that a $1.5 Trillion asset manager ever came even remotely close to "severe financial stress"

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Is PIMCO the First Domino to Fall?

If the financial losses keep up, massive layoffs are inevitable. But this may not be the only firm that’s headed for hard times.

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October 9, 2014

As I wrote above, you're clueless.

You can use all the emoticons you like but you look like a clueless fool. Even basic financial principles are above your head. That has been noticeable, not only throughout this thread, but throughout your posting history.

I'll give you another recent example of your financial ignorance:

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How is it that if Gross "nearly bankrupted" the company with his short bet, the firm was so well-positioned to benefit from decreasing rates?

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There is nothing in any of our links that shows Gross' short position made the firm "well-positioned to benefit" PIMCO from the declining rates.

He guessed wrong on interest rates. It hurt his performance. It doesn't mean his short position was larger than his long position. But it was large enough to hurt his overall performance and cause clients to head for the door. Massively.

Short positions are profitable when prices fall. Bond prices rose all during 2014. It's one of the reasons that Gross' returns all during 2014 fell behind his competition and why over a 16 month period $400 billion were withdrawn from PIMCO's funds by their clients.

And since you're obviously out of touch with financial news concerning Bill Gross, he repeated his short bond position mistake this year on the German bund market. He went short, rates in Germany fell, Gross' performance lags behind even his old funds at PIMCO this year. He won't learn. Just like you.

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Hopefully, you'll be able to come up with JUST ONE MORE blogger (who doesn't even back you up to begin with.) Pathetic.

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What is truly pathetic is how desperate you are to save face. PIMCO is privately held so any disclosure on their part about financial distress is not forthcoming. It can only be pieced together by outsiders based on SEC disclosures regarding their portfolios and through private conversations with their employees. David Faber of CNBC had an entire series on the mess at PIMCO left by Gross about a year ago.

You've been bitch slapped and you realize it. If you would just Google Bill Gross and how he drove PIMCO down you will find hundreds of links to articles about it. I've posted numerous links but I'm not going to post hundreds of links just to show you up. I've accomplished that with the links I've already posted.