He's one of the most respected investors in the world, and he's trying to sketch a path forward for the global economy to a room full of CEOs and top government executives.
So naturally, PIMCO boss Mohammed El-Erian is talking about playing a board game with his daughter.
And the Vancouver crowd, part of a federal government-sponsored CEO summit at the Olympics, is hanging on his every word.
Mr. El-Erian, whose formal title is chief executive officer and co-chief investment officer at the $1-trillion Pacific Investment Management Co, is a big fan of the board game Risk. He thinks it explains everything a CEO needs to know about doing business these days.
For those who haven't played, the object of Risk is world domination, achieved by rolling dice.
Mr. El-Erian enjoys Risk because if you're minimally competent at calculating probabilities, you can roll across continents, destroying opponents. The PIMCO head earned a doctorate in economics from Oxford. He says, with modesty, that he didn't lose a lot of Risk games as a teenager.
There's an obvious real-world analogy to Mr. El-Erian's game. Until the financial market meltdown of 2008, CEOs and senior civil servants operated in a system that they considered, wrongly, to be inherently rational and explained by those who understood probability and basic economics. Then it all fell apart, which brings us to Mr. El-Erian's family games.
When PIMCO's boss sits down to play Risk these days, he goes up against his young daughter and his mother-in-law. And he gets waxed.
Risk games at the El-Erian household are dominated by an "irrational player," by a mother-in-law whose goal is not to win, but rather to destroy Mr. El-Erian, so her grand daughter might win, explained the PIMCO CEO.
That concept of "irrational players" sums up the great unknown in capital markets, circa 2010, according to Mr. El-Erian.
Government bodies of various descriptions are playing an unprecedented role in the economy. Politicians control British banks, most European financial institutions and the dominant U.S. insurer. State-owned Asian companies are snapping up resource plays. Regulators are rewriting the rules on everything from derivatives to executive compensation.
And there is no rule book; no odds that dictate how these government agencies will behave. Mr. El-Erian and his colleagues simply can't predict with any certainty how the game will play out.
This metaphor, part of a larger speech, struck a chord with the crowd. A senior civil servant from Saskatchewan popped out of his seat to say his province has financial relationships with governments of all stripes, including eastern European nations with balance sheets that resemble that of Greece. He asked what Saskatchewan should do about these ties.
Mr. El-Erian's quick response was a predication that 2010 would go down as the year of sovereign risk, as credit market belatedly began to realize that not all countries are equal when it comes to paying back loans.
PIMCO's boss said an essential skill in credit markets, going forward, will be determining which governments have the political fortitude to balance stimulus spending with soaring deficits: Who has the guts to raise taxes, for example. In simple terms, Mr. El-Erian told Saskatchewan to start doing way more homework on the quality of its business partners.
There was a hard-earned sense of realism in the PIMCO CEO's remarks, as he acknowledged that financial players have consistently failed to anticipate just how events will play out.
In discussing a widely-held view that sovereign players will have minimal market impact, PIMCO's chief looked back over the past three years. He pointed out that when the U.S. real estate market began to unravel in the summer of 2007, "the consensus view was housing problems were isolated and containable." That, obviously, wasn't quite the way things played out.
PIMCO's boss didn't stoop to commenting on market valuations, but did sound a cautionary note, warning that some commentators are now looking back on the 2008 meltdown as nothing more than a 'flesh wound" for the global economy, when it's quite possible that larger and longer-lasting damage was done.
In a final question, Mr. El-Erian was asked if there were larger lessons for capital markets from the recent crisis.
He replied that the roots of the problem might be traced to the day when British and U.S. players stopped talking about how they worked in "financial services" and started viewing their world as the 'financial industry."
Mr. El-Erian's observation is that we took a wrong turn "when we forgot the purpose of finance is to serve the economy."