Jeff Gundlach

Earlier today, DoubleLine's Jeff Gundlach's held another of his comprehensive overview webcasts, which unfortunately we missed due to the excitement in the Senate Ag Committee where Duffy "let one slip", however for the benefit of our readers we wanted to share the complete 72 page presentation as it covers diverse and critical topics in every aspect of the domestic and global economy.

Today, at 1:15pm Pacific Time (4:15 EDT), the head of DoubleLine Funds, Jeff Gundlach will hold an open discussion and webcast on the question of whether risky assets are cheap enough. Among the headline topics will be what the most efficient portfolio allocation for the current market going forward is (for those who missed the efficient frontier including real assets, gold appears to have been the best performer over the September 2008-September 2011 with a comfortable margin especially over equities, period much to the chagrin of various naysayers).Anyone can join the webcast at the following link; phone lines will also be made available at (877) 407-1869 or for international calls (201) 689-8044. Full webcast presentation of the webcast presented below.

Just out from Bloomberg:

• Jeffrey Gundlach Found Liable for Breach of Fiduciary Duty
• TCW wins trade secret claim against Gundlach
• TCW wins no punitive damages against Jeffrey Gundlach

Well, that's over and done with. At least a jury did not find him to be a worse bond investor than Bill Gross...

DoubleLine's Jeff Gundlach has released his latest presentation on the economy and the markets, titled, cryptically enough, "Now What?" Zero Hedge readers can access it below. For those who wish to hear Gundlach cover the key topics live, can do so in real time here (registration required) as he is currently holding a Q&A on the key topics presented.

And continuing with the rates discussion from the prior post, next up we have that "other" bond manager, DoubleLine's Jeff Gundlach, chiming in on what would cause a treasury rally following QE2. His assessment: nothing short of a confirmed double dip, or "zero GDP growth." Dow Jones reports: "Over the past two months, government bond market participants have fiercely debated whether the end of the Fed's $600 billion in Treasury bond purchases in June will trigger a market sell-off or rally...the U.S. government bonds' rally in recent weeks shows investors have already bet the Fed's exit from the market will boost safe-harbor Treasurys because the economy will slow. So any gains will be limited.  "The 10-year Treasury yield has hit the moment of truth," Gundlach said in an interview with Dow Jones." Needless to say, 0% growth, which is already in the cards according to a simple correlation analysis between Y/Y GDP growth and initial jobless claims, will force the Fed, in the absence of another fiscal stimulus (which everyone knows is not coming from DC this year and possibly next year either), to step up double time and to launch far more easing to offset the economic weakness which we have been predicting for 6 months, and which the recent Japanese earthquake, and Chinese slowdown, merely accentuated. The only wildcard continues to be Japan, which many have expected would take up the monetary slack and issue tens of trillions in yen in QE, yet which has so far been slow to come, leaving the ball in either the US or European court. However, with the ECB in transition as JCT wishes to cement his hawkish legacy, the only real alternative continues to be the Fed. Oddly enough, stocks today appear to have started to already price in the start of QE3. When this sentiments shifts to precious metals and crude, our advice would be to hide you kids, and hide your wife...

As usual, Jeff Gundlach provides one of the best, most comprehensive overviews of the economy with a fixed income/rates emphasis. 97 pages of pure facts as the voiceover was given during the earlier webcast, allowing the reader come to their own set of conclusions.

Now that Jeff Gundlach is out there making big residual waves (with Barron's as usual just 3-6 months behind the curve), here is, once again for those who missed it the first time around, Gundlach's latest presentation. The next update from Gundlach will be on March 15. We will present it to readers as soon as it hits.

... in which a familiar chart appears on page 8.

By now the apocalypse scenario for MBS has been made all too clear: there is a possibility that quite soon all MBS securities may be found worthless due to technicalities, as assignments of securities without due underwritier diligence (there is a reason why underwriter counsel exists in the first place) could easily render the entire stack worthless (the same goes for CMBS) and puttable to the issuer. Yet one person who believes that the fraudclosure's impact on MBS will be "negligible" is DoubleLine's Jeff Gundlach. While we wish we could share's Jeff enthusiasm, we are concerned that his entire argument is premised on the assumption that if an autopilot has worked so far, it is certain to work for the (un)foreseeable future: "The Great Unknown notwithstanding, the risk du jour should come as no great surprise. Since the advent of the credit crisis, a number of states have made fitful attempts at foreclosure moratoria. Even more  obvious, a growing part of the mortgage sector has entered quasi-moratorium since 2007. For years, remittance data have shown thebuilding of overhang of non-payers relative to the tardy liquidation of delinquent loans. So tell us something new." While from a technical standpoint Gundlach (whose livelihood depends on the ongoing stability in the multi-trillion MBS arena) is spot on, never before has the very core of the judicial process been not only questioned, but found to be replete with fraud. Which is why now, for the first time, there is a political element. And Jeff knows all too well, that politics is what happens (and impacts the ROI) when one is busy putting together DCF's. Should this scandal continue to escalate to the very top, as it seems set on doing, we would be far less sanguine about the optimistic outlook for the MBS space.

Jeff Gundlach who has been spot on with timing his calls for Treasury inflection points, did a quick Q&A with Morningstar summarizing his outlook on the economy. In a nutshell while the DoubleLine manager is still skeptical that inflation may strike, he is convinced deflation is pervasive. To wit: "markets and the economy to date have offered scant evidence to support
the inflation case. Stocks are down over the past 10 years. Real estate
is down hard over the last five years. Commodities are down sharply over
the last two years. Instead of spiking to double digits, bond yields
are hugging the ground. M3, which is now calculated only by private
economists, is down nicely over the past year. And of course money
velocity is moribund: Society has looked into the debt abyss and decided
enough is enough with the debt-based consumer economy. So, deflationary
forces still prevail. What could shift the balance of forces in favor
of inflation? A well-meaning movement to cut the deficit has at long
last arrived, maybe. But cutting the deficit that is supporting the
consumer economy will directly depress gross domestic product. If that
causes not just a look but a step or two into the deflationary abyss,
then maybe the inflation case will move to center stage." Sure, let's not forget the collapse in the shadow economy. But let's also not forget that the economy is in a vacuum, and were the Fed not in the picture, we would totally agree. But because the most irrational human being in the world is in charge of said world via his control of the US reserve currency (and irrational because he promotes exclusively policies that benefit the vast minority over the majority), we will have to disagree. And so would the price of gold.

DoubleLine's Jeff Gundlach will hold a webcast discussing the performance of his new DoubleLine Core and Total Return Funds (which as we pointed out recently had presciently started selling bonds ahead of the recent move lower), but more importantly will share his general outlook on the market. As this is the man who a few months ago warned that the US will likely end up defaulting (and very much correctly, contrary to those drinking the perpetual monetization Kool Aid, believing in the ultimate power of the Fed, which will be the last buyer long after all other marginal buyers of US debt are long gone), this webcast will be a very informative and interesting one. DoubleLine has opened up the webcast to readers of Zero Hedge. Mark your calendars - details inside.

Former TCW Total Return Bond Fund maven Jeff Gundlach, who since December has been running his own money at OakStreet-blessed DoubleLine, has just moved from "overweight" to "small underweight" on Treasurys. The gradual shift out of USTs is in line with the bond manager's forecast made in June when the 10 Year was 3.1% that yields would drop another 60 bps to 2.5%. Yet the main catalyst for the selling is driven by the inability of the 10 Year to make a new record low, unlike both the 2 and 5 Years, both of which are trading at historical tights, no doubt facilitated by the Fed's gradual encroachment of ever to the right of the entire yield curve. As Bloomberg reports: "this “divergence in behavior across the yield curve is very significant,” said Gundlach, who oversees $4.8 billion in assets in Los Angeles as chief executive officer of DoubleLine. “So while the fundamentals for low rates remain compelling, the message of the market action suggests that much of these now widely recognized fundamentals are reflected in Treasury bond prices." We are confident that given enough time, and enough fiat linen printed, the entire curve will eventually be one flat line as the Fed (and Pimco) are now the marginal buyers of any resort in their attempt to make homeownership with zero money down, an interest-free endeavor. After all, you can't have growth unless the animal spirits are rekindled, and this kind of direct intervention is the only thing the Keynesian acolytes at the Marriner Eccles building know how to do well. So where is Gundlach investing next:"We moved the proceeds from the Treasury sales into a mix of corporate bonds, including our first allocation to below investment grade corporate bonds." Of course, with even traditional MBS and UST investors now actively gobbling up HY, we are very concerned that when the inevitable flush in the B2/B space occurs, and it always eventually does, there will be no marginal buyers of anything less than IG. But with a market as broken, technically driven and centrally planned as ours, who even pretends to think about what tomorrow may bring...

In this brief interview with Morningstar, Doubleline's star MBS analyst, and the bane of TCW's existence, Jeff Gundlach, points out the glaringly obvious: i.e., that "if Citigroup was too big to fail, then so much greater is the risk for asset managers at a multiple of that market cap." Obviously the mortgage expert here is contemplating asset manager behemoths such as PIMCO and BlackRock, which have quietly become even more institutionalized within the fabric of the financial markets, than some of the TBTF banks. And without access to the Fed's discount window, liquidity threats to firms like PIMCO are exponentially greater than even for a bankrupt POS like Citigroup. No wonder Gross was offloading European sovereign debt with gusto as of last check. With total assets of over $1 trillion, saying that a failure by PIMCO, and by extension its Fed-unmoderatable counterparty risk, would have huge implications on the US financial system, is so obvious, that it is completely understandable that there is not one single provision in the Senator from Countrywide and the Congressman from Fannie's FinReg proposals on how to tackle this most recent threat to capital markets.

The big guns in LA are out swinging, with news emerging that Jeff Gundlach will get funding and a minority investment from of bond giant and other major TCW defector, Oaktree. Howard Marks' firm is now set to eat TCW's municipal lunch. And all the disciples of Robert Day had to do was promote the guy. Also, futures in the "Battle of the Attanasios"(Paul and Mark) just surged majorly in favor of the House creator.

Straight from the CIO of TCW

Gundlach June 15 -

hat tip Stephen