Jeff Gundlach

Doubleline's Jeff Gundlach must not be a GETCO algo because unlike the algorithmic programs who are all that's left of traders in this policy farce of a manipulated market and who are programmed to BTFD especially when there is a massive stop hunt program about to be unleashed on 10-20 ES contracts, he is not buying stocks. Instead the bond manager has closed his July 2012 call when he called the top in Treasurys, and told Reuters that he has bought "more long-term Treasuries in the last month" than in the last four years." And this coming form the so-called new "bond king." Gundlach said he started buying benchmark 10-year U.S. Treasury notes in the last month after yields popped above 2 percent, because he sees value there relative to other asset classes, including stocks, which he said are "overbought."

The defense of $500 was valiant, but as we expected, brief. And as of moment ago, Apple was finally trading well below the psychological barrier, or at $496 $495 $494: some $30 below Joe Terranova's "generational buy." The catalyst? Nothing unknown, but a big downgrade from Nomura which cut the Price Target from $660 to $530 did not help. What certainly did not help is that Nomura also sees $400 as a downside case, roughly in line with where Jeff Gundlach has said for many months is what his personal target on the faddy stock is. As for the record 230 uber-levered hedge funds who are still long the name: good luck with exiting in an orderly fashion.

Today at 4:15pm Eastern, DoubleLine's Jeff Gundlach will present his 2013 outlook "Year of the Snake" touching on the economy, markets and "his outlook for what he believes may be the best investment strategies and sector allocations for 2013."

From the sheer hypocrisy of a fight over a few billion dollars when faced with trillion dollar deficits and the eventual austerity that will be forced upon the US, DoubleLine's Jeff Gundlach expounds during this excellent Bloomberg TV interview on his growing concerns at markets where fundamentals "are trumped by policy decisions," and while he does not believe that bond markets are bubbly at the moment, the impact of an inevitable recession could be devastating given valuations. His subtle suggestion to keep powder dry through 2013 and into 2014 (as deploying money at that future point will make all the difference), follows from his view that he does not see much value in US equities (people always want investments to go up like a line... That's just not reality) and suggests great care be taken in US bond markets (focusing on low volatility funds) as he looks at Japan's dismal record (and hyperinflationary possibilities) and reflects on the US that "the issue isn't the fiscal cliff. The issue is the fiscal crisis that the United States has been looking at for the past several years." Must watch.

The strength of the Japanese stock market over the past few weeks has been at once heralded as anticipation of Abe's policies and the renaissance of this island nation's faltering reality. However, as Bloomberg's chart of the day points out, this performance trend (just as we saw in sentiment and market performance in the US) is absolutely normal heading into an election. As the chart below shows, the election day (on average) has marked a significant short-term top in the market 12 of the last 13 previous cycles. So while Jeff Gundlach is short JPY and long NKY, we suspect there will be a better entry point for the latter 'lomg' leg just a few days after the election landslide. As Daiwa's Soichiro Monji noted "Investors buy on promises and ideals up until the election. When the parliament starts a normal session, they will start trading on reality."

Jeff Gundlach presents his latest thoughts in the following 75-slide presentation and webcast. Briefly summing it up, he expects considerably more volatility to re-appear in Europe, thinks JPY is a short (and NKY a buy) and Japan is to be closely watched, prefers Gold to stocks as a vehicle to play more quantitative easing, and is anxious of the fiscal cliff - noting that the problem was created from years of budget deficits. Some notable quotes include: "A lot of that GDP is phony"; "Japan is really out of policy tools"; "Many countries can be net debtors if central banks are monetizing debt."

It seems, just as everyone knew but really did not want to admit, that AAPL is the core (pun intended) of the entire risk-rally. With the re-appearance of the bond-market this morning after their long-weekend, risk-assets everywhere have caught the tech companies' cold with EURUSD at one-week lows - back under 1.2900, S&P futures tumbling back towards pre-QEternity levels and having wiped out all of last week's gains, as AAPL is down over 2% (seemingly picking up speed once we noted the 10% iCorrection earlier). Oil is holkding gains while USD strength is sapping Silver, Copper, and Gold's performance. Treasuries have snapped back to low yields of the day (down around 4-5bps). VIX has snapped back above 16% (up around 1 vol).

After last week's presentation, DoubleLine's Jeff Gundlach (having rotated his spec play from Long Nattie, Short AAPL - which was a winner - to Long SHCOMP, Short SPX) committed the cardinal sin in a great interview this morning with CNBC's Gary Kaminsky. The apocryphal 'new' bond guru noted that he is against big government, doesn't like risk assets at these levels, believes QE will end in higher rates (adding that he would not be surprised to see 10Y yields 100bps higher by the end of the year), but most abhorrently: "the obsession with Apple is a truly remarkable social phenomenon - the stock is over-believed and over-bought. There is NO exit for the Fed, QE3 will be ineffective, and it is more likely that the Fed buys all the Treasury bonds that exist." Two must-see clips covering why buy-and-hold is completely dead thanks to government intervention to his preference for secured credit funds (where have we heard that before?) to the huge risks in buying financial stocks and the vulnerability of risk-assets - as the world realizes the circular financing reality of Europe.

Double-Line's Jeff Gundlach presented 66 pages of chart-pr0n covering everything from Government Spending to Consumer Spending; from eating-out costs to food inflation; from future economic growth slowdown indicators to housing recovery hopes and reality; and from foreign stocks to Treasuries, MBS, and metals. Between a lack of surprise if 10Y rates were 100bps higher by year-end; and his call to 'sell the S&P 500 against a long in the Shanghai Composite', there's a little here for everyone (and his funds are killing it).

Jeff Gundlach discussed mortgages, models, math, and moronic delusion with Tom Keene on Bloomberg TV this morning. Starting with why Europe matters to US Treasury and mortgage markets, the DoubleLine boss goes on to address whether banks/hedge-funds have become too math-centric. "I don't believe in models" is how Gundlach begins his diatribe on the over-confidence in math and empirical relationships. Jeff believes there is no reason to hold any investment grade bonds that are inside of 3 years (and perhaps even 5 years) because they "just basically have no yield" and further, it is non-sensical to think that short-term interest rates are going up in the US. As Socrates said, Gundlach echoes the fact that 'one should not try to know everything; but respect the things that one cannot know' - don't delude yourself - which seems like good advice for all those with such high convictions of sustained reality. Towards the end he discusses his already-infamous short-AAPL, Long-Nattie trade - adding that the trade has 'monster legs' and the biggest mistake investors make is exiting winners too early.

Just days after his last live webcast "To QE3 or Not To QE3" DoubleLine's Jeff Gundlach is out once again with his latest presentation and live webcast titled "Deficits Don't Matter" (just don't tell that to the PIIGS). We are confident this is a Regan-referencing joke. Hopefully, in the off case it isn't, Jeff should also make the case why, in that case, taxation is also meaningless and should be abolished. After all, the Federal Government, courtesy of various newfangled economic theories can print its way to gargantuan debt and perpetual prosperity.

Appropos Bernanke's razor's-edge tight-rope-walk fence-sitting as the not-too-cold-not-too-hot economy reduces the Fed's ability to do anything, Jeff Gundlach of Double Line provided a succinct explanation of the the 'uncomfortable position' the place-of-confusion Fed finds itself in. Simplifying the dilemma to: the Fed cannot raise rates as the dramatic implications for the huge debt load (and implictly the interest expense saving the budget deficit) of the US Government are untenable while at the same time inflation (in the things we need - not just want) is rising notably. However the new bond-king notes rather sarcastically, that the Fed can show that there is only modest inflation thanks to housing and wage growth (and herelies 'the biflation'). The old-school-Fed's efforts at pre-emptive strikes against inflation is simply not going to happen, he states, citing an "intentional attempt to suppress national income - an attempt to stop nominal GDP growing too much - simply won't be tolerated until inflation moves into the 4-5% category".

There are those who thought last week's massive Initial claims miss was the last one. They were wrong. Instead of printing at the expected 370K, an improvement from last week's already big miss of 380K, this week came at a whopping 386K, the worst standalone print in 4 months. Well, until last week's revision that is: instead of the 380K print that stunned everyone, last week's number has now been revised to a massive 388K. Why? So that mainstream media can declare, with a straight face, that this week saw the number of initial claims decline! Here is the reality: last week's expectation was for a print of 355K. Instead we got a number of 380K. Now this number is being revised to 388K, and is the biggest initial expectation to revision miss since early 2011. Needless to say, this means two things: 1) the transitory bump associated with record warm weather, which was nothing but pulling from the future, is now over, and 2) the April NFP print will be another disaster, which is just as the Fed wants it -  after all it is time to start setting the stage for the NEW QE (and certainly not QE3 which is already in place as Jeff Gundlach was so kind to explain) now that Obama is the margin hiker in chief.

Earlier today, thousands listened to Jeff Gundlach live (if with the occasional flash crash) lay out his latest views on the economy and markets. For those who missed it, as well as for those who may want a refresher on why Gundlach is slowly building up a natgas position, or why he is buying gold on dips, here is the full slidedeck used by the DoubleLine manager.