PIMCO Chief Expects Greek Default, More Problems for Europe

The chief executive of prominent bond fund PIMCO, Mohamed El-Erian, expressed his doubt Wednesday about the prospects for debt-ridden Greece and beyond. "For the next three years, we're going to see different economies work out different problems. For European economies, especially Greece, it would be through default," El-Erian told reporters in Taipei. Pacific Investment Management Company, or PIMCO, is the home of the world's largest mutual fund, the Total Return Fund. El-Erian is the CEO and co-CIO. Speaking with reporters, El-Erian was also critical of the possibility of a second bailout for Greece. "Nothing has been done to enhance growth. No single (Greek) indicator has shown strength. They are afraid a restructuring would hurt European banks." Still, El-Erian was hesitant about the global impact of a possible Greek default. "Ireland, Portugal, Italy and Spain would have to be involved. But Greece is too small in terms of economic impact," he noted. As of December 31, 2010, the Total Return Fund managed $240.7 billion. PIMCO, based in Newport Beach, California, employs more than 1,200 people.