Tales of PIMCO.

• Author: McKinley, Vern
• Position: Pacific Investment Management Company

The Bond King: How One Man Made a Market, Built an Empire and Lost It All

By Mary Childs

322 pp.; Flat Iron

Books, 2022

Megabanks and other large financial institutions in the United States and the people who lead them all have their own stories and monikers. Goldman Sachs has a reputation for providing a steady stream of treasury secretaries through the revolving door between New York and Washington, earning it the nickname

"Government Sachs." Steven Mnuchin, Henry Paulson, and Robert Rubin all made the transition from Goldman to treasury secretary in the past few decades. Many books have chronicled the history of Goldman Sachs, whose founding dates back to the 1860s.

In her new book The Bond King, Mary Childs chronicles PIMCO, a large financial institution in its own right that was founded during the 1970s. She has plenty of material to relate, notwithstanding the firm's relatively short history. Childs is cohost of National Public Radio's Planet Money podcast and previously worked at Barron's and the Financial Times. The Bond King is her first book.

My previous knowledge of PIMCO came from my familiarity with the "Big Three" public financial figures who worked there. Bill Gross, who is the central figure of Childs's book, was tagged with the moniker "the bond king" by Fortune in 2002. He is familiar to the public because of his many appearances on Bloomberg, CNBC, and other financial networks. Economist Mohamed El-Erian has also been active on the business TV circuit, was under consideration for vice chairman of the Federal Reserve during the Trump years, and is more recently known as a harsh critic of the Federal Reserve's handling of monetary policy in the wake of the pandemic. Neel Kashkari is familiar thanks to his stint as the bailout czar under Paulson during the Great Recession. I never followed closely their work at PIMCO, but Childs does a good job of weaving a compelling narrative to fill that void.

Gross / Gross's founding and building of PIMCO is the major narrative of the book. PIMCO is not a bank and does not primarily focus on trading stocks; rather, its focus is on trading in the bond (or fixed income) market. As Childs explains:

Normal people don't like to talk about "bonds." ... We like to talk about stocks, which are also claims on a company but are riskier, more whimsical. People think stocks are more fun.... [In contrast, bonds] are mostly bought by sophisticated, institutional investors--big kids. It all started during the early 1970s at Pacific Life Insurance, where Gross landed his first job after...