There are two pieces of news that have kept my attention over the weekend:
- The first is the cancelling of Brett Bailey’s “Exhibit B” at the Barbican in London, thanks to an idiotic petition on change.org.
- The second is Bill Gross’ sudden departure from PIMCO – the investment firm whose $2 trillion of assets under management would make it the world’s tenth largest economy.
Starting with PIMCO
The Pacific Investment Management Company (PIMCO) was founded and built “almost single-handedly” by Bill Gross, who is now 70. It is also one of the most poisonous work environments (according to Felix Salmon) – also almost single-handedly caused by Bill Gross.
- Bill Gross doesn’t tolerate people talking to him directly – you have to pass his assistant pieces of paper to put in his inbox tray during the day if you want something from him.
- In fact, the whole office is in silence – Mr Gross doesn’t tolerate talking in general.
- The silence begins at 4:30am, when everyone is required to be at their desks.
- This story: “Gross once sent a corporate bond trader home in the midst of the trading day with instructions to hand-write 1,000 times that he would not submit trade recommendations without charts.”
Obviously, that’s cause for discontent. Personally, I suspect that it was tolerated while Mr Gross was making all the right calls. But recently:
- Bill made some bets on inflation – and the inflation never came, so he totally missed the rally in US treasuries.
- He also underestimated how quickly the Federal Reserve would scale back quantitative easing – so PIMCO got a bit burnt with their bond positions.
- Bill also told everyone to avoid common stocks immediately after the financial crisis – missing one of the greatest bull markets of modern time:
- The $222 billion PIMCO Total Return Fund (which Bill managed directly) has trailed near everyone, and investors have been pulling money from the fund for 16 months consecutively (the fund is down to $222 billion from its peak of $293 billion early last year).
- In April of this year, Bill Gross spent most of his Investment Outlook newsletter mourning the death of his cat Bob and detailing how he used to ask her opinion on pet food stocks (“one meow for ‘no’, two meows for ‘you bet’“). That’s a direct quote*.
*I wrote about this when it happened. Go down to point 7 in the Mourning Cats and 1 Dollar Salaries For Billionaires post.
So in the midst of that, opposition started to voice itself; and eventually, Mr Gross just quit without telling anybody, and announced that he was moving across to Janus Capital. Leaving PIMCO to discover the news on the news along with everyone else.
Although it seems that there was some cheering from PIMCO staff.
The Concerning Parts
- Some are suggesting that between 10% and 30% of PIMCO assets could be pulled as a result of Bill Gross leaving. $10 billion was pulled on the day that he announced. Just consider that 30% of PIMCO’s assets is about $600 billion – which works out to about 5% of the total value of the US Treasury Bond market. Imagine that in a sudden sell-off! Sure – it could be followed by an immediate re-purchasing with the same money (now housed with alternative fund managers) – but still, it could rock the boat. All because Bill Gross threw a hissy fit.
- I’m not so sure that Bill Gross is going to be that amazing at Janus Capital. Mainly because crazy work demands might be okay at a company that you’ve built from the ground up (for 41 years) – but when you try to impose those on a company that already exists, that’s throwing the frog directly into the boiling water…
But we’ll have to wait and see. Either way, I think it’s totally awkward that a single fund manager should get to wield so much power over markets.
And speaking of crazy individuals
Brett Bailey is a white South African theatre director slash artist. And he’s a bit controversial.
His latest big exhibition is called Exhibit B. The blurb:
It seems that everyone that has seen the exhibition has come away moved. The performers themselves, who spend long hours standing immobile, wrote this in a joint statement:
“At first glance at the materials, it is easy to assume that we are nothing but objects, repeating the worst of the racist and dehumanising aspects of the human zoos referred to in the petition(s) to cancel the exhibition.
Standing, exhibited in this manner, we can state explicitly that we are not objects during the exhibition. We are human, even more so when performing.
We find this piece to be a powerful tool in the fight against racism. Individually, we chose to do this piece because art impacts people on a deeper emotional level that can spark change.
The exhibit does not allow for any member of the audience, white, black or otherwise, to disassociate themselves from a system that contains racism within it.”
But of course, almost immediately, Sara Myers from Birmingham got outraged that something “racist” (in her view) was being shown at the Barbican, started a petition, and initiated a series of protests outside the Barbican that became a bit violent. And the Barbican was forced to cancel the exhibition.
Sara Myers and her supporters accused the exhibition of being racist and exploitative: the absolute opposite of both the intention and outcome. And despite the fact that no one seems to have walked away from this saying “Oh yes – we should definitely go back to objectifying and demeaning the Black Community”.
On the one hand, at least they’re not disassociating themselves from the system.
On the other hand, their argument seems to be mostly based on the fact that there were no white people in the cages.
Either way, the point is that the exhibition is now more famous than before. So well done on spreading that word.
Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.