Planet Money The Bond King
Mar 30, 2022
Discover the rise and tumultuous fall of Bill Gross, a legendary figure in the bond market. Explore his innovative revolution at PIMCO and the firm’s strategies during the financial crisis. Delve into the pivotal role of bond trading and how it surpassed stocks in significance. Understand the tensions that led to Gross's controversial exit and its ripple effects across the financial landscape. Plus, get insights on financial innovations like buy now, pay later, and what it all means for investors.
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Humble Beginnings
- Bill Gross's mom found him his first job at Pacific Mutual, an insurance company, through a newspaper ad.
- His job involved evaluating risk and clipping coupons from bonds, which he found tedious.
Bond Trading Vision
- Howard Rakoff envisioned trading bonds like changing lanes on a freeway for quicker returns.
- This idea challenged the traditional buy-and-hold strategy.
PIMCO's Start
- Bill Gross seized the opportunity to trade bonds, starting a small company within Pacific Mutual with $5 million.
- This eventually led to the formation of PIMCO.
