The New Report On Bill Gross Is The Most Embarrassing One Yet, And It Makes Him Sound Paranoid

This is a story that's been building for awhile, but is crescendoing right now.

First it started with his underperformance, getting the last leg of the bond rally spectacularly wrong.

But getting a call wrong isn't in itself that big of deal.

Things started taking a turn for the worse though in January when news came out that partner Mohamed El-Erian was leaving the firm. At first this was plausibly chalked up to normal differences or El-Erian wanting to do something else. Then it came out in the Wall Street Journal that there had been serious clashes between El-Erian and Gross, and that Gross had insulted him in front of colleagues, while referring to himself as "Secretariat."

But again, even this story could be ascribed to the natural existence of big tensions and egos at massive, important firm.

But the new shoe that just dropped is not good.

Jennifer Ablan at Reuters got on the phone with Gross, and got quotes from him that make him sound angry and paranoid.

According to Abalan, Gross that Mohamed El-Erian is trying to "undermine" him and that El-Erian wrote the Wall Street Journal story:

When asked if Reuters could see the evidence about El-Erian and the allegation he was involved in the article, Gross said: "You're on his side. Great, he's got you, too, wrapped around his charming right finger."

He said he knew that El-Erian, who had been widely seen as the heir apparent to Gross but is now due to leave in mid-March, had been in contact with Reuters as well as the Wall Street Journal.

Gross indicated he had been monitoring El-Erian's phone calls.

Evidently PIMCO went on to deny that Gross had made those statements to Reuters.

Bottom line: The biggest bond manager in the world has gone from having a tough run in performance to a terrible run in the press.