About a month ago, Charlie Rose interviewed PIMCO’s Mohamed El Erian. El Erian is one of the country’s most successful money managers. He’s the co-CEO of the Pacific Investment Management Company, better known as PIMCO which oversees more than 829 billion dollars. He previously led Harvard University’s endowment to substantial returns on investment. In the interview, which is available below, Charlie Rose speaks to him about his new book “When Markets Collide” and how he sees the global economy today.
June 2, 2008 - Pimco’s Co-CEO and co-CIO, Mohamed el-Erian discusses his new book, When Markets Collide, with Barron’s, which puts today’s market accidents in a unique perspective. Both the Barron’s interview and his book are must reads. Here is an excerpt:
What are the biggest things people missed?
Under a “just-in-time” risk-management mindset, people waited for the turn before taking risk off the table. Hubris took over. People believed these new derivative products would allow you to reposition your portfolio after the turn as opposed to preemptively. But that wasn’t a possibility with credit products and subprime, and losses were huge. People misinterpreted what these instruments can do, and didn’t retool significantly.
Who’s the poster boy for this way of thinking?
The book quotes Chuck Prince, [the former CEO] at Citibank, on the front page of the Financial Times, words to the effect that when the music stops it will be messy, but as long as it’s playing he’s on the dance floor dancing. Within weeks the music stopped and people couldn’t get off the dance floor. In many of these sophisticated firms, the traders did things that neither the middle nor the back office could support, and the result was very big losses. It’s like pipes in your house that are very old. Every once in a while, one will rupture below and you have a very messy cleanup.
Donald Coxe: Capitalism Faces its Greatest Challenge
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Donald Coxe, Chief Investment Strategist, BMO Capital Markets has just released his latest instalment of Basic Points, 'Capitalism Faces its Greatest Challenge' for Nove
Worst Oil Bear in Decades
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Year to Date World Stock Market Returns
Is this a buyer's market or what?
Look at Russia; although most folks aren't interested (but should be) Russia is not only off by -64.5%, its valuations have compressed to 4.3 times trailing earnings. China stocks are down -64.3% is fetching 14.55
Hugh Hendry Interview: Invest in Long Government Bonds
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This week's issue of Barron's features an in depth interview with Don Coxe, Chief Investment Strategist, BMO Capital Markets. Mr. Coxe is best known for his highly read monthly newsletter, 'Basic Points,' as well as his bi-weekly conference calls. Hi
New Audio Resource at GreenLightAdvisor.com
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This month, Bill Gross presents his latest investment outlook,
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Heebner and Holmes on Emerging Markets
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Ken Heebner, CGM Funds, and Frank Holmes, US Global Investors, discuss emerging markets in the context of the Fed's 50 bps rate cut last week. Both their
Wise Words
Only when the tide goes out do you discover who’s been swimming naked. — Warren Buffett
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Wall Street Journal's What's News, Nov. 18, 2008by The Wall Street Journal
Yahoo CEO Jerry Yang will step down and Senator Harry Reid has pledged to press ahead with legislation to help automakers
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