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Bond King Gundlach Calls for ‘Hard Landing’

Jeff Gundlach – the so-called bond king is calling for ‘hard landing’ in the economy, of course, caused by the Fed’s aggressive raising of interest rates. It’s interesting to me that Gundlach and many others are calling for the bad outcome, while it is obvious that the equities markets aren’t buying that scenario. It is very difficult to reconcile the S&P500 at 4,000 with any recession, let alone a ‘hard landing’. Who knows? Not me–obviously I have found out that trying to forecast (also called wild ass guess) these things is a coin toss of sorts. I can say that record credit card debt by consumers and a never ending federal budget deficit isn’t going to end well–but whether this is next week or next decade I have no clue.

Right now I am seeing the 10 year treasury yield at 3.95%–poised to head over 4% once again–all it takes is one more piece of stronger than expected economic data. Today we have jobless claims coming out and it is unlikely this will move rates over 4%–but tomorrow we have the personal consumer expenditures (PCE) index coming out and if it comes out hot ‘hello 4%’. We also have 5–yes 5 Fed yakkers tomorrow-always a wild card of sorts.

Yesterday was a slightly green day for preferreds and baby bonds–not a very green day, but a green day just the same. I watch–that is all–watch–why do anything else?

7 thoughts on “Bond King Gundlach Calls for ‘Hard Landing’”

  1. Ha, yeah gundlach is a bit bombastic. I would defer to him on mortgaged related investments but not credit.
    Dan Fuss is probably the most appropriate icon for this group. He’s like the Warren buffet of credit.

  2. Well sometimes you don’t need a weatherman to know which way the wind blows. Gundlach is sticking his finger out to gauge the wind, what most people already know. The longer the 2yr/10yr treasury bond inversion the greater the chance the Fed breaks something really good. Well they started this by saving the economy back in the pandemic days but are now on a whole new frontier. Hang on it’s going to be Mr. Toads Wild Ride if you listen to the guru’s. We will see, when we see it.

  3. I usually respect Gundlach calls although he made some bad ones I remember him piling into MLP funds before they crashed! I laughed when he said that we could not help defend Taiwan from China because we are running out of ammunition giving ‘it all’ to Ukraine. Never underestimate the military-industrial complex. China has been turning down the rhetoric on Taiwan at least publicly. Make no mistake about it, we are testing our latest technology in Ukraine, Jeffrey, to prepare.
    And Bill Gross will always be the bond king to me, PIMCO has suffered since he left. Gundlach’s DBL has been crushed along w most income CEF’s..’ but I’m getting my income’ they say.. lol.. the Hodda way.. or hdoda way..

    I sold a few more things; OLP and my CTO pfds, for small gains w divs overall..parking in GridT’s. I still like OLP long term for its industrial assets but these REITs are going to really get hit on int rates.

    1. Bea, I enjoy listening to him. And one answer I have never heard from him know matter what the topic is “I dont know”, ha.

    2. Bea I have been following the same REITS, some you have talked about. All seem to have hit their highs for this cycle. The preferred for HPP, SLG, KIM, CTO, UBP all compared to their lows in Oct.
      Still watching to see if they test those lows again.

  4. This is another 4 day work week and noticeable that there has been less work traffic and a few more tourists around town even with the cold weather. Could be a lot of people took off work. Seems like this can effect trading with lower volumes especially on stocks that have low volume in the first place.
    I expect next week we will drift lower as people wait the next fed meeting.
    My guesses are as good as the news on the weather calling for snow in the bay area down to 1000 to 800 ft

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