When denials can be as instructive as the truth

March 7, 2014

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Denials can be as instructive as truths – and if not, they can be at least more entertaining. On Thursday a fellow fingered as the father of bitcoin rejected a report he founded the crypto-currency. In the shadowy world of virtual money, such confusion may not be so surprising – nor matter. Not so with the bizarre defiance of $2 trillion “Bond King” Bill Gross.

Take the bitcoin brouhaha. Newsweek magazine revealed Dorian Satoshi Nakamoto as the unlikely disrupter of the currency world. He is described as owning some $400 million of virtual coin, yet lives modestly outside Los Angeles and collects model trains.

In the piece, the California man never quite admits to being THE Satoshi Nakamoto identified in bitcoin circles as the author of the currency’s 2008 founding manifesto, “Bitcoin: A Peer-to-Peer Electronic Cash System.” Now the 64-year old man categorically denies any involvement. The character known only virtually as Satoshi Nakamoto also said Newsweek had the wrong Satoshi.

Such fuzziness has been the currency’s unique selling point. But the matter of who came up with the concept is irrelevant to its viability as a legitimate currency. The whole “he didn’t say/she didn’t say” here is little more than sidebar entertainment. Similarly, the failure of the Goldman Sachs elevator annotator – whose book deal was killed yesterday over a case of mistaken identity – is mere circus.

Not so the curious case of Bill Gross. The Pimco boss runs trillions of dollars of client money for Allianz, deemed one of the globe’s few systemically important insurers by the Financial Stability Board. His every utterance about fixed-income markets is deemed E.F. Hutton-worthy.

So it matters that he denies telling Reuters he had “evidence” that former Chief Executive Mohamed El-Erian “wrote” an unflattering piece about him in the Wall Street Journal, and had been monitoring El-Erian’s calls. Everyone can regret words uttered intemperately. That’s no excuse for denying them, though.

Worse, it makes it look as if Pimco’s internal politics may have rattled Gross enough to upset a normally stable demeanor. That’s unbecoming of a king of the bond market.

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