The founder of DoubleLine, known as the "new debt king", Jeff Gundl, said in an interview recently that US stocks are currently in a bear market and the global economic recession has become a reality.
The table below shows the comparison of the global central bank's balance sheet with the MSCI Global Market Index, which serves as a background reference for the Fed's recent attitude of “180-degree turn”.
If this is not bad enough, Gundlach also pointed out that the transition from the market to the economy shows that the momentum of global economic growth has become worse and worse.
The real-world decline in global economic data shown in the chart below also confirms this view.
Zhitong Finance was informed that he emphasized the collapse of global trade, indicating that the global economic recession is a fact. But at the same time,US economic data-- at least in the labor market -- not as bad as what Gundl said.
But in turn, this means inflation will continue to rise. IfMorgan StanleyIf the judgment is correct, this will force the Fed’s attitude to be tough again, or raise interest rates again in December and raise interest rates three more times in 2020.
Perhaps because of this optimistic expectation of wages, consumer confidence is still strong.
Gundlach pointed out another dangerous sign of the recession, which is the gap between consumer expectations and the current situation.
Of course, another major danger signal is the December retail data revision. Although we saw yesterday that the US retail rebound in January was better than market expectations, Gundlach emphasized the sharp drop in the six-month average of the data, which is another potential risk factor for recession.
And he also attaches great importance to the continued growth of US debt, and there is no doubt that debt growth is disturbing.
Related to this is the following new warning about US interest spending: “The Congressional Budget Office expects US interest spending to explode.”
Zhitong Finance learned that Gundlach is also on MMT (moderncurrencyThe theory has been slammed, calling it the "madman" theory, saying that the theory is based on "completely wrong arguments." "People with a doctorate in economics are paying for MMT's nonsense."
Regarding the soaring US trade deficit, he said in an interview that "the trade deficit has not narrowed, but is expanding. The commodity trade deficit is at an all-time high."
Gundlach also talked about the future of monetary policy and re-emphasized the bond market and the Fed.interest rateExpected discrepancies: The market generally expects the Fed to cut interest rates, while the dot matrix indicates that the Fed will raise interest rates three times between 2019 and 2020. He believes that the Fed will surrender this time and may cut 50 basis points.
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(Article source: Zhitong Finance Network)