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The Story Of Bill Gross - The Man Who Made Billions From Bond Trading And Lost It All - YouTube
Channel: Seeking Alpha
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hey daniel snyder here joining me today
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is mary childs co-host of npr's planet
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money podcast and author of the book the
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bond king the true story of legendary
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bill gross the man who invented bond
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trading built an empire within pimko on
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the west coast made billions and then as
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the cover states right here lost it all
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mary thanks for joining me today it's so
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great to have you here thank you so much
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for having me
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so i mean you've been in this industry
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for a long time you've been tracking and
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writing about the bond market for quite
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you know
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you've been a barons you've been to
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financial times you've been at bloomberg
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but i gotta ask you how did the idea for
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this book about bill gross come about
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for you
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so i was covering corporate credit
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markets at bloomberg in oh gosh from
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like 10 to 14 and i got like a little
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bit of a chip on my shoulder which i now
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realize is kind of inherited just from
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like the arrogance of bond people but i
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was like people don't understand the
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bond market and they need to like
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everyone pays attention to the stock
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market and that's like so dumb
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and you know that like kind of nested in
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my heart in some way and i just felt
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like there was indeed this like wildly
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influential market that people didn't
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understand and talk about in the same
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way and central to that market is of
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course pimco and i ran into them a lot
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in my corporate coverage days but then i
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started covering them full time in april
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2014 at which time they were in the
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midst of this like enormous management
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change and um about to lowkey implode
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the details of what you can read in the
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book um but it seemed to me like you
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know when you start a new beat or at
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least when i started newbie i'm like
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okay i want to read everything that's
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out there and i was looking around for
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like you know i was also covering
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blackrock and janus and double line and
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guggenheim and i was just like what you
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know you can read michael lewis's book
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about the origins of like the
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mortgage-backed securities market but to
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a large extent i felt like there was a
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hole in in the world of like literature
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and books to to talk about the bond
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market and its import in a sort of
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accessible non-textbook way
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and so i decided to do it i don't know
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which is phenomenal right i think the
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timing right now is really peculiar as
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well because i think a lot of investors
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are talking nowadays about how the bond
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market in the stock market and where
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there used to be correlation and flight
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to safety in the bond market there's not
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because of inflation there's so many
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factors right so the bond market is in
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such big conversation right now um
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but to go back to because you break it
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down so extremely well within that and
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the start of pimco and how it got
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started and how it was a risky chance i
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mean you must have done tons of research
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research
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and you had tons of interviews and and
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went through tons of sources and videos
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and everything else throughout the
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writing of this book so i want to ask
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you what was the most shocking or
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surprising thing for you that you
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learned while you were writing this book
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oh wow um you know i wish i had like a
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pat answer for you because um
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there are a number of ways i can go with
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this one of the things that surprised me
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the most was like i could not for the
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life of me like
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you know it was i was doing a lot of the
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research in 2017 while all of these
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marches and protests were happening you
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know women me too all this stuff and i
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was like
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there are like no women in this book
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they're functionally there too
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and you know in the kind of like drama
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and the narrative of pimco's rise and uh
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the 2014 events and i was kind of
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frustrated by that at the time and the
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the thing i like tried to like wedge it
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in sort of like ham-fisted like i was
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like okay and then by the way women and
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like it didn't make any sense and so it
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was it was i learned a lot about like
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the settlements and the the various like
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allegations over the decades um and then
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i published
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almost none of it just because it made
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no sense in the narrative because these
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you know these stories end up so far
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from the center of power by design um
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you know and end up being kind of just
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like fringe and unimportant in that way
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in like the corporate
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story and as a person who cares about
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that stuff it was really painful um but
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to not be able to incorporate that but
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because this is such a bummer of an
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answer i'm going to give you a little
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anecdote
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so this is not like scandalous by any
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stretch but it made me laugh um one of
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the the people in the book she um she
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was telling me the story about how when
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she used to do interviews back in the
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very early days at pimco
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um she had a bit of a like litmus test
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where she had a cuckoo clock in her
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office
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and if she was doing an interview for a
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potential pimco employee and the cuckoo
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clock went off and the little bird jumps
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out and says goku if the interviewee
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jumped she would be like
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you know what it's not gonna work out
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this isn't to fit i'm sorry cause their
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temperament was clearly so ill-suited
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for the work environment at pimco so
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that was one of my favorite little and
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that somehow didn't make it into the
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book um i think i just forgot to find it
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at home but
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yeah but i mean you just brought up the
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workplace right you do dive into the
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work culture of pimco and um you know i
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remember reading about how you were
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talking about their silence on the floor
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while you're there and like the the
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trying to build a community but also i
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mean you're talking about a man bill
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gross
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who
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was just so unique and was so often
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right and was so almost controlling to a
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large degree and it's like yeah how do
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you balance the narrative within this
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book of being like we should talk about
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pimco versus this is why pimco is who
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pimco is because of bill so i was just
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kind of curious and workplace manner of
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what you're talking about yeah
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you talk about there's a lot of people
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that read the book and we're like wow
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you captured this workplace environment
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very well um was that something that was
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an initial strive for you to be like i
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really want to communicate this or was
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that something that just kind of added
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on over time it was definitely part of
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what i wanted there were a couple things
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that i was like i need to communicate
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like the intensity of the firm for sure
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like that's so definitional and
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foundational to what pimco is and how
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they think of themselves and how
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everyone else thinks of them that if i
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got that wrong i think the whole book
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would have collapsed like i think the
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no one would have been able to read it
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and take it seriously so that was very
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important to me to get right obviously
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the bond market stuff was very important
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to get right you know um i was so elated
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like i worked so hard to get it right
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but even so you know there's gonna be
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some word that's like wrong on page 97
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just because like you know this thing
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has gone through a thousand different
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edits but to to get like a wall street
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journal review that says that i like am
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fluent in bonds from jim grant i was
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like
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okay like i didn't i didn't have that
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word wrong on page 97. um
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that's a random page don't go looking i
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have no idea what's on page
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but it is um so those were kind of
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really important but i think the most
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most important thing to get right for me
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was bill gross like this is not a
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biography and i didn't ever want it to
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be like he grew up in the beautiful
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babbling creek about but i wanted to
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communicate
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clearly and
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in it as fulsome a manner as i could who
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bill is and what makes him tick and like
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there's this weird like misunderstanding
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of him or or kind of a dissonance
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between what he thinks he puts forward
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and what he actually is
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and i think he still struggles with that
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i think everyone who worked around him
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struggles with that so capturing that's
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almost impossible because it's truly the
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parable of the blind men and the
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elephant you know they're all feeling a
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different part in describing what
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they're feeling and it's like not adding
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up to what an elephant looks like
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so i had to interview so many people
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just to get kind of this this sketch of
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bill
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and of course bill was like you know the
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most important person to talk to in that
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um and he was very generous with his
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time and and his thoughts but it was it
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was a there are so many contradictory
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things about him and you know he changed
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over the decades and so i had to kind of
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wrap uh wrangle all of those disparate
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views and portraits to to kind of build
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this picture and i think i did it i
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think i threaded the needle where i
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think it did come out like
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he's a person he's not a god he's not a
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you know a caricature he's a real person
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and i think you do come away at the end
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of the book feeling like you sort of get
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him
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yeah i mean
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what you just kind of talked about i
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mean i think you did an excellent job
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first off is like you really did tell
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the compelling story of him as an
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individual within these scenarios and
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you know how he started by you know
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going to the casino in las vegas versus
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then going into the bond market and
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having the worldwide casino but also
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the fact that people change over time
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right and and how do you balance this
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guy that was just so right all the time
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um
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but also smart enough because i was
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pulling this quote out of your book when
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he was talking about the disease of size
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and success
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right and he recognized that himself
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that he was just like we are growing so
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big this could be the downfall of us and
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then obviously we have what happened in
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his life and i mean you still have a lot
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of power players in this book that are
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still relevant in today's market is that
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still surprising to you
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it's awkward is what it is like i think
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you know i think one of the things that
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that makes this book kind of electric is
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that everyone is still alive and and you
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know still playing in their markets and
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very big and and to be fair like i
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always aim to make sure that the
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whatever i whatever you know
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journalistic endeavor i do that the
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people involved like don't feel wronged
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but it's almost never the case that
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they're like yeah you did a great job
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because i don't do pr so that balance
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and you know this is familiar to you um
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that balance is always kind of a
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delicate emotional one but um but i do
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think like
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the that's why another reason why it's
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so important is that this is a living
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market this is you know the people who
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created this market are with us the
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people who run this market are running
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it like we haven't changed substantially
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the structure of this market in ages and
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i think it's worth examining and i think
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it's worth at least understanding you
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know we can't make better choices if we
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don't understand it
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yeah i also just love i mean you did an
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entire chapter on the great financial
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crisis yeah right and the influence that
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pimco had during that time
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um i wanted to ask you i mean was that
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surprising for you because it was kind
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of surprising for me being somebody that
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you know we still look back on the the
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great financial crisis and we're
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referencing it a lot right now with
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recession fears and everything else it's
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kind of like
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is pimco in the background again right
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now is i think a question that pops in
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my head i think i mean yes this is again
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a you know a fundamentally like bond
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market
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like
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it's not necessarily driven by the
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market that they sit in quite as much as
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it was last time but you know like like
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they aren't
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such a large player in like driving
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inflation arguably you know so i think
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that the positioning is certainly
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different this time um but they are the
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experts you know and they are very
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central and foundational still to the
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bond market and its workings and you
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know every decision that about like bond
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market structure or a derivative
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structure like there are committees and
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and pimco sits on these committees so i
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do think that it is still absolutely the
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power player that it was in 2008 2009 i
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think the you know that really
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established their reputation that the
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financial crisis really was a way for
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them to make a lot of money for clients
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but also to kind of to me that that was
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more or less their most influential most
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publicly influential moment and i think
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that you know they're still out there
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doing like thought leadership about you
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know the transition to a higher interest
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rate paradigm and all this stuff that
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that's very useful um i'm curious how
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their
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power manifests in this one because it
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isn't quite as
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you know the trade in 2009 was to do
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what the government's about to do but do
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it first to buy what the government's
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about to buy and then sell it to them
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and it's less clear here it's a lot less
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clear here how to maybe pull that one
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off so
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yes but it's a you know i i i'm trying
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to avoid saying this time it's different
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but
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yeah totally i mean but so to wrap this
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up a little bit i've got one more loaded
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question for you if that's all right uh
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what book is coming next
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you know a lot of people have been
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asking um and i'm flattered i'm honored
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by the question i will say this one
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really took it out of me so i'm not
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going to be doing a ken griffin book
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anytime soon um that's been the number
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one suggestion i'm playing i'm not
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walking into that trap
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um i don't know good suggestions are
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welcome
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yeah i know there's some people out
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there i mean it's not exactly bomb but
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powell
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powers in conversation a lot of
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complicated but anyways um so before we
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wrap up where can people follow you if
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they want to interact with you more
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yeah i'm on twitter at mdc i'm on it far
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too much so you can definitely find me
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there um i'm i have a sub stack that i
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update annually at
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offtherun.substance.com and i'm on npr's
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planet money
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on average like once or twice a month so
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amazing thank you so much mary thanks
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for spending time with me today guys i
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can't recommend this book enough then i
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literally binge read it like you get
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into this the way that mary wrote this
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and and really broke down bill gross as
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a man
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um and and the guy that revolutionized
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capital markets for the better in all
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honesty um go check it out give it a
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read interact with mary mary i wish you
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all the success from this you deserve it
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thank you so much i really appreciate
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that
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