fund firm pimco. the head is mohammed el-erian. tyson said she doesn't think that ending qe2 will have much effect. el-erian said he isn't sure about that. they both agreed that weak growth and europe's sovereign debt crisis have left investors scratching their heads and wondering what to do. maggie asked tiszen a tyson and what is needed to get the economy moving again. the answer is leadership. >> i actually am becoming more optimistic that we will certainly see something on the debt limit and what seems to be going 0 in washington is an agreement that the discussion of the debt limit will be associated with a large multiyear commitment to the $4 trillion over ten years. we can, if we put enough into that statement that's credible,

of pimco and co-chief investment officer of the world's biggest bond fund. hi, nice to have you with us. >> thank you, sus yee. >> susie: we have lots to talk about. let's begin with greece, how do you think this whole greek drama is going to play out? >> it's going to play out over time. it's both an engineering problem and a political problem. and they've got so many people involved. you've got the greek government, the official creditors. so we should expect a lot of volatility. lots of conflicting news and ultimately the reality is, susie, it's very difficult to solve. >> all right. now today deutsche bank c.e.o. said that if the greek problem spreads to other countries it could top lehman brothers in terms of contagion for the world financial system. tell us what you see as the best scenario that investors can expect and the worst. >> the best scenario is that we get a greek population that is willing to sacrifice for a number of years. official creditors willing to put in money and private creditors willing to roll over, the op rat difficult approach.

he is the founder and chief investment officer of pimco, the world's largest bond fund. >> thank you, susie. nice to be here. >> susie: so bill you've been very busy. you've been tweeting and on twitter and have a lot of people following what you're tweeting and i'd like to start with one of the ones that caught everyone's attention. you said recently the fed will stress extended period of time language or even a period of interest rate caps. you just heard our report about interest rate caps. will it really make a difference to help the economy if the fed goes that way. >> i think ultimately it would, susie. it's importance in quantitative easing programs to help asset prices that's been ben bernanke's main objective and the least controversial way is to keep interest rates at current level and that's what the call an extended period of time but historians and others like you just spoke to have also noted that over the past century more formal caps or ceilings have accomplished the same purpose. i think ultimately if the economy deteriorates we might just see a new form of quantitati

mohamed el-erian is the ce off of pimco, and he's written a sue push back on marketsoff of pimco, anda sue push back on markets and mayhem. he joins me. let's start with just that question. for a long time, the europeans have tried to find some way that they could kick the can down the road, that they could roy some kind of assistance because i think they fear a lee maaym leh event. >> you're right, europe has been kicking the can down the road treating greek's problem as a liquidity problem. i don'tic look the analogy of kicking the can down the road. think of rolling a snowball down a hill. two things happen when you do that. first, the snowball or the problem gets bigger. and secondly, the dynamics start accelerating and becoming more disorderly. that's exactly what he's happening in dre happening in greece. degrees has two problems. it has too much debt and cannot grow. and until these problems are solved, more and more of europe is going to be contaminated. we had a massive bailout a year ago in greece. massive. a year later, every single indicator in greece is worse off. >> one

that's the starting recommendation of pimco ceo mohammed l. arian. he says europe risks wasting more money on europe. charles, quite a few people are saying that, that maybe default is the best answer there. >> there are a whole bunch of different options there. default may be one, some kind of restructuring, whether it would be a forced restructuring, contrary to what the european central bank wants or not, these are all open questions. we'll get back to them on "world business today." let's ask specifically about where we're going to end up with greece now? are we going to end up with a default? is this package likely to go through that you and i were talking about. let's get on the line to journalist john sur rop loss in athens. he joins me now. john, clearly the vote of confidence was something papandreou could expect to pass and he did pass. no fraying at the edges. next week's vote on this huge package of austerity measures is likely to be a different matter, isn't it? >> it is. because the government has no leeway to negotiate. it's been hande

mohamed el erian is the ceo of pimco, the world's biggest bond trader.rb book on markets and mayhem. he now joins me. thank you for joining us. >> thank you, fareed. >> let's start with just that question. for a long time, the europeans have tried to find some way that they could kick the can down the road, that they could provide some kind of assistance because i think they fear a lehman-like event, where if greece falls it causes a kind of shock to the markets. is it inevitable that greece will default? >> it is inevitable that greece would have to restructure its debt. you're absolutely right. europe has been kicking the can down the road, treating greek greece's problem not as a sol sen si issue but as a liquidity problem. i don't like the analogy of kicking the can down the road. i prefer a better one fashgs reed. think of rolling a snowball down a hill. two things happen when you do that. first, the snowball or the problem gets bigger. and secondly, the dynamics start accelerating and becoming more disorderly. that's exactly what's happening in gre

engineering a price drop in the price of oil of course but wiesenthal's a paper bug and he attacked pimco and bill gross as being given to conspiracy theories so there's a bit of an interesting dynamic being set up here between bill gross and the people who support the status quo in the paper pushing paper bug neo liberal psychopaths that drive down the road toward economic clintonism that we're seeing in athens the return of the when they call themselves al the so joe wiesenthal is calling him a conspicuous silver conspiracy theorist but here's a guy bill gross who accidentally admitted i believe was on c n b c that he received inside information from the fed he receives information on interest rates that's right he let slip and i think that's part of his campaign to try to bring some balance to these markets i think is a vigilante for market justice so he let slip that he actually is in the in the loop with inside information from the new york fed in the federal reserve now he's talking about gary gensler c f t c openly and corrupted lee rigging markets in this rig market capitals night

earlier this week, cnn's maggie lake spoke with the ceo of the global investment firm the bond fund firm pimco. the head is mohammed el-erian. tyson said she doesn't think that ending qe2 will have much effect. el-erian said he isn't sure about that. they both agreed that weak growth and europe's sovereign debt crisis have left investors scratching their heads and wondering what to do. maggie asked tiszen a tyson and what is needed to get the economy moving again. the answer is leadership. >> i actually am becoming more optimistic that we will certainly see something on the debt limit and what seems to be going 0 in washington is an agreement that the discussion of the debt limit will be associated with a large multiyear commitment to the $4 trillion over ten years. we can, if we put enough into that statement that's credible, then a lot of the details could be worked out after the election. that would allow us room, it seems to me, to have as part of the deal some continuation of support. now, i certainly agree with mohammed. it's very uncertain right now and this is a politically very diffic

those investors include big financial firms like black rock, pimco and met life.lso says it will post a second quarter net loss of up to $9.1 billion. >>> and a 360 follow, remember that southwest airlines pilot who insulted gays, women and older workers in an open mike rant back in march? well, he's now apologizing. in case you didn't hear it the first time, here's some of his rant. >> eleven [ bleep ] homosexuals over the top, and a granny. eleven! i mean, think of the odds of that. i thought i was in chicago which was party land. after that, it was just a continuous stream of gays and grannies and grandees. >> well, in a lengthy letter to his coworkers captain james taylor wrote "i deeply regret the derogatory remarks i made and the hurt i have caused. i take full responsibility for those comments. it was truly insensitive of me, and i would like all of you to know that from now on i will show nothing but the utmost respect during my interactions with all employees". southwest says taylor has been reinstated in his job after being reprimanded, suspended without

it's certainly not pimco he said and it's probably not the bond funds of the world. madam president, i have quoted erskine bowles before about his take, a democrat, chief of staff to president clinton, who was one of the co-authors of the report that the commission presented at the request of the president, laying out the dire crisis that we face and recommendations as to how to address it. erskine bowles, the cochair of the president's fiscal reform commission, said the growing national debt and federal deficits are -- quote -- "a cancer and they are going to truly destroy this country from within unless we have the common sense to do something about it." this is the challenge before us, each member of the house of representatives and each member of the senate and the president of the united states. this dwarfs all other matters before us and before this congress. with all due respect, the senate's spending several weeks on the small business innovation research act, federal aviation administration's bill and now the economic development revitalization act has left

bill gross, the head of pimco, the largest bond fund in the world with hundreds of billions of dollars invested, has ceased buying u.s. government treasuries. none of that is in his portfolio. he says recently what we are doing with our economy, with the fed, with its quantitative easing, the government with its worthless stimulus package that this congress passed that's done really nothing, he called it a sugar high. not real. a temporary surge that has not changed the circumstances we're in. he's a man who deals every day with investments, and he has ceased to invest in the united states treasury. yet the nation has operated without a budget, without a budget now for 785 days. the democrat-led senate, even when they had a 60-vote majority last year, perhaps the biggest majority in maybe my lifetime. i can't remember a party having 60 votes in the senate, when that last occurred, but you can pass a budget with 50 votes. it's giving a priority. we know we need a budget. we set up a budget act that allows even a bare majority of senators to pass a budget, and it helps contain spending a