It greatly behooves me to report that Jeffrey Hannibal Gundlach isn’t a fan of the ark any more. Moreover, he isn’t a fan of anything. His mood is entirely dire and is predicting doom, as he eagerly waits for it in his mega mansion, sprawling, estate.
The only respite, by the Bond King’s calculations, is to remain inside of the gold mine and wait for the economy to implode.
The artist Christopher Wool has a word painting, ‘Sell the house, sell the car, sell the kids.’ That’s exactly how I feel – sell everything. Nothing here looks good,” Gundlach said in a telephone interview. “The stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong.”
Gundlach, who oversees more than $100 billion at Los Angeles-based DoubleLine, said the firm went “maximum negative” on Treasuries on July 6 when the yield on the benchmark 10-year Treasury note hit 1.32 percent.
“We never short in our mainline strategies. We also never go to zero Treasuries. We went to lower weightings and change the duration,” Gundlach said.
Currently, the yield on the 10-year Treasury note is 1.45 percent, which has translated into some profits so far for DoubleLine.
“The yield on the 10-year yield may reverse and go lower again but I am not interested. You don’t make any money. The risk-reward is horrific,” Gundlach said. “There is no upside” in Treasury prices.
Gundlach reiterated that gold and gold miners are the best alternative to Treasuries and predicted gold prices will reach $1,400. U.S. gold on Friday settled up at $1,349 per ounce.
Gundlach lambasted Federal Reserve officials yet again for talking up rate hikes for this year while the latest GDP data showed disappointing economic growth. “The Fed is out to lunch. Does the Fed look at what’s going on in the economy? It is unbelievable,” he said.
Overall, Gundlach said the Bank of Japan’s decision on Friday to stick with its minus 0.1 percent benchmark rate – and refrain from deeper cuts – reflects the limitations of monetary policy. “You can’t save your economy by destroying your financial system,” he said.
DOOM!
I do agree that the market should be down massively. But, then again, I like to scream fire in a crowded room. My support for treasuries lies in Japan and Germany, where rates are negative. As long as competing government bonds are negative, I believe our treasuries offer a unique arb for advantageous investors.
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Is his thesis invest in pillow cases?
The guy was calling to get long, with S&P above 2200 a month ago, and looks like it is getting there. Suddenly changed his mind ??
I’m fascinated that US bonds yields stay relatively high. I’ve heard some macro guys talking about .5% sometime next year.
Why isn’t the Bond King seeing what you are seeing?
The Bond King thought he got a good deal on a Chinese made atmosphere shuttle time machine?
Fun fact: the words in the word painting mentioned by Gundlach is actually dialogue spoken by the assassin who preceded Martin Sheen’s character in Apocalypse Now.
Rather than waste fat Marlon, though, the assassin joins him in his insane enterprise.
The. Horror…
That dude is sketchy looking.
Sure August and September suck.
Home prices look toppy.
And 5% unemployment has only on way to go.
So why freaking panic if you have a good cash pile
The Dow goes to 16,000 and S&P to 2000.
As if we have not seen a 10-15% selloff before
That lack of action by BoJ said everything. Friday was strange because Nikkei Futures were down big yet we didn’t follow? I chalk it up to Last Day Window Dressing. New Month starting…BoE has a 100% chance of cutting rates this week. IMHO he may hold off again for more data. Either way, I am totally in the Doom Camp…but heck I was there for a very very very long time.
Watch KOL. Gundlach will be right on one thing for sure. If it keeps going higher. Now that Bloomberg is a prostitute. Wtf is Cuban doing? There is a pattern appearing. Long live IBC.