Bossman Gundlach suggests buying treasuries here, especially after the recent spike in yields. Amazingly, he thinks we’re at a point in this central bank QE narrative that ‘helicopter money’ might come into play.
Essentially, what that means is central banks giving money away. How the fuck do they think they can do that without becoming Zimbabwe? Or, maybe that’s the goal here. Who knows?
All I know is that earnings blow, the economy is Yellen soft, and Gundlach manages $95 billion and was inspired to run money from watching Lifestyles of the Rich and Famous.
I think it is a reasonable strategy to start legging into the Treasury market,” Gundlach said in a telephone interview.
“We’ve been buying a little bit today … we bought a small amount of guaranteed mortgages,” particularly Freddie Mac MBS, Gundlach said.
Gundlach, who runs $95 billion at DoubleLine, said he does not expect much from the latest Federal Reserve meeting but does expect somewhat “hawkish” language about the potential for hikes at meetings later this year.
Gundlach suggested that a “helicopter money” drop could be the government’s next big monetary and fiscal move to stimulate the U.S. economy.
“Helicopter money is going to happen,” he said.
TLT is moderately higher today, but well off recent highs. All ark dollars, apparently, have gone into oil stocks again.
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Ark is troubled – price doesn’t lie.
Price is inexorably higher.
Tlt should be 135 but it’s not
1) Price may not lie, but people do lie to themselves.
2) Q1 earnings have been bad but expected. Q2 guidance has been unexpectedly lower
3) Everyone is optimistic about their investements
4) The vast majority is long-only
Therefore the bullish view is more likely to be wrong
Ok, so the logic on this isn’t air-tight, but you get the gist: one match that gets the public paniced and it all goes up.
For once I agree. First time this year after Feb 1st that I am long of the bond.
Prepare for NIRP (US Policy) as well as Further QE.
Carry On.
The question is the path that the FED will take. Will be hit 0.50 or 0.00 first?
With Greece Bonds and Brexit, I don’t see how they raise rates before June, but if the US economy muddles onward, they may raise rates later.
If TLT doesn’t rally soon, it will bleed me to $125
I’m a buyer of the Ark at $120.
This squeeze has not run the full gamut just yet. Nasdaq is in the topping process, I still believe we’ve got another leg up in SP500/Dow/Russell.
As far as employment, lipstick on a pig. The argument of raising the minimum wage directly coincides with low level jobs that have been created over the past few years. Dow +7 now, can I get a golf clap…..
Why would helicopter money cause boarding the ark to be prudent? Isn’t the entire premise of helicopter money to stoke inflation? (Honest question.)
If there is enough money sloshing around in the worldwide ocean of liquidity, then stocks, bonds, and just about everything else too, is a buy.
As for stoking inflation, we’ve had plenty of helicopter money since 2008. Where is the inflation since then?
The ark is a bubble that could burst any day. Obviously helicopter money would destroy the ark. Short term anyone who takes the time to look at the long japanese bonds would know buying bonds anywhere is borderline criminal. It really doesn’t take a phd. Just look for yourself. JGB 1.4 03/55 #8 Corp for example.