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Jeff Gundlach: "There Is No Such Thing As Economic Analysis Anymore"

Tyler Durden's picture


Some always entertaining and informative thoughts on precious metals (which after weeks of suppression are finally soaring on a sliding USD - the Taper pricing in is over, time to price in the Untaper), Japan, Apple, nat gas and, of course, central planning from DoubleLine's Jeff Gundlach.

Since we're dealing with markets that are being manipulated by central bank policies, there is no such thing as economic analysis anymore. All you have is the imaginations of central bankers, and you don't know what they're going to do, so you have to be diversified. For the inflation part of the portfolio, silver is the right one because metals as inflation hedges are dead money. They don't pay anything. You want to allocate as little as possible, while still covering that base. Because silver is the highest beta, you want silver for your inflation protection because you can put less in it, less dead money. I believe if gold doubles, silver goes up 4x. You have twice as much dead money if you use gold instead of silver, so silver is a more efficient way to do it. We're in a deflationary world right now, not inflationary, though everyone is worried about inflation. The message the markets are saying, outside of the stock market, is deflation. Not surprisingly, silver is down but the Japanese stock market is the place to be.


Perhaps it started yesterday. I think that the complacency regarding stock market risk is very similar today to 1998, 1999 and and 2006 and 2007. This concept that it's the only game in town. This reason to own the stock market is TINA (there is no alternative). That's ridiculous. There's just as many alternatives as there's ever been. There's cash, there's bonds, there's real estate, there's hedge funds, there's commodities, there's foreign markets. What a strange world. I can't even think of a worse argument to own a market than TINA. It's transparently flawed on the surface of it. We'll see what happens. I think we're at 92% bullishness right now in the world of advisors on stocks. The most extended sentiment I've ever seen is 98% bearishness mid-March of 2009. I'd say the bullishness today looks remarkably similar to the bearishness of March 2009.

On AAPL and going from short to long:

We're actually in Apple. We actually own Apple in one of our equity portfolios. We bought at $405 the first time, and I think our average cost is below $425. I said that Apple would go below $425, but I wasn't committed to buying it. I think Apple is an interesting play. I think Apple is detached from the stock market for sure. The market went up a lot and Apple went down a lot. It's building a base. It's sorta cheap. If you strip out the cash, you've got a 7 P/E or lower on the business, it's a cash machine. I sorta like Apple. So, we own a little bit of Apple in our equity strategy.


I think if the stock market falls, which is almost guaranteed to fall sometime between now and year-end, it's almost guaranteed. Who knows how much it'll fall, who knows if it'll end higher or not, but it's almost to fall after this sort of a run. If you look at Japan as a harbinger, I think Apple will outperform. It could easily preserve capital. I see it as a defensive way of building out your stock portfolio against beta, which looks pretty dicey right now. We own a little bit of Apple right now. I like the stock better than the bonds. It's interesting how Apple has turned into a hated stock from the most beloved stock of the decade. It's just because so many people who own it are underwater.

On natgas:

I'm long natural gas. I've been long natural gas for a long time. I said Apple was a generational short, and people took that the wrong way. What I meant is, that over the course of a generation, Apple's stock is going lower. I didn't mean that Apple is the greatest opportunity in a generation.


Taking it the right way, natural gas is a generational long. It's something that I think is very likely to go higher in price. It doubled from when I bought it, but it's been volatile. I kinda think that most of the things that have done well in the past year are overvalued. What do you do? If you believe in something as a long-term play, the problem that you have is when you get out of it, what do you do next? If you sell natural gas at $4 (per BTU), what are you hoping for? It goes to $3.75? Are you going to buy it then? What if it goes to $4.50? Are you going to buy it then? I think it's going to double again. It doubled once, it's going to to double again. It might take five years, it might take ten years, but you can't get too cute. It's sort of like the Japanese stock market. It went to 13,000 which was my target, which sounded aggressive. That was my target for the year. When it got to 13,000, they said what are you going to do? I said 'You just have to stay long. The momentum is too strong. It's too major of a deal.' If you're going to own any stock market, it's Japan. If the reason to own stocks is quantitative easing, you want to own the ones that have the biggest support, which has been Japan. We're still long Japan. I'm not surprised it's dropped. I think it's going to drop further. We're long from 8,500. Obviously we don't expect it go up every day. I think natural gas is the same sort of thing. I wouldn't sell it.

Full interview can be found in TheStreet


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Thu, 05/30/2013 - 10:55 | 3610447 doomandbloom
doomandbloom's picture

well this was happening for sometime now....its not a new phenomenon. We are so used to it...its impossible to get away.

BOAR, Mitchez

Thu, 05/30/2013 - 10:59 | 3610460 Pladizow
Pladizow's picture

Its been this way for 4 years and the market has only gone up!

Thu, 05/30/2013 - 11:03 | 3610474 brewing
brewing's picture

the correction will be epic...

Thu, 05/30/2013 - 12:26 | 3610605 francis_sawyer
francis_sawyer's picture

"All you have is the imaginations of central bankers, and you don't know what they're going to do..."


BWAAHAHAHAHA!... Yes you fucking do know [what they're going to do]... They're going to fucking print money until the cows come home & hand it over to their fellow tribesman to make bets on in a big casino... The ones who make the wrong bets, they'll add the losses to the bill & tax the 98% for the balance...

Fucking cheesepopes falling all over themselves trying to buy some time by conning the masses into thinking that building an even "fancier" Rube Goldberg machine is the ticket [& lining their own nests in the process]...

Thu, 05/30/2013 - 11:41 | 3610607 ParkAveFlasher
ParkAveFlasher's picture

Who needs analysis with all this great data?  Just buy buy buy your troubles away. 

Thu, 05/30/2013 - 11:43 | 3610615 DaddyO
DaddyO's picture

Correction my ass, as long as the CB's own the printing presses, there will be no correction.

More likely, the dollar will lose its reserve currency status and the slow slide to oblivion will escalate.

We will see more unrest and the heavy fist of a facist/socialist ruling class will thump any resistance.

Then things will unwind and quickly...


Thu, 05/30/2013 - 12:25 | 3610705 yogibear
yogibear's picture

The constitution has been shredded apart. Even though many are sworn to uphold it, they ignore it.  Correct, a fascist/socialist ruling class is already in charge. It will become more obvious as time passes.

Thu, 05/30/2013 - 11:17 | 3610537 slaughterer
slaughterer's picture

Love that Gundlach-as-young-new-wave-musician photo.  

Thu, 05/30/2013 - 10:55 | 3610448 Jim in MN
Jim in MN's picture

Terminal Decadence

Thu, 05/30/2013 - 12:15 | 3610464 fonzannoon
fonzannoon's picture

Gundlach is one of the very few people that I follow intently. He sees through the bullshit.

edit - to my junkers fwiw

Gundlach is so confident that phase three is coming that he’s planning to start an equities fund and a long-short hedge fund in early 2013 to offer investors additional protection from inflation. Gundlach, who says he buys assets only on the cheap, is also sitting on cash in anticipation of scooping up securities at fire-sale prices. Cash makes up 17 percent of his Total Return fund.


He says the amount of money investors can make in phase three will dwarf what they can earn now.

“I’m waiting for something to go kaboom,” Gundlach says in his office a week before the L.A. speech. “If phase three takes two years, it’s worth waiting for. The markets don’t have lots of opportunity now.”

Gundlach has a history of making brash pronouncements. At a conference in New York in April, he told a Bloomberg News reporter that he would abolish the 99-year-old Federal Reserve, a position espoused by failed Republican presidential aspirant Ron Paul.

“That’s a very extreme view,” says Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Given how the Fed has evolved since the early 1900s, to say we’re going to change all that and start over is absurd.”

Thu, 05/30/2013 - 11:01 | 3610465 Richard Head
Richard Head's picture

So Jeffrey, you're saying you own a little bit of Apple?

Thu, 05/30/2013 - 11:05 | 3610466 Zen Bernanke
Zen Bernanke's picture

if the central banks put policies in place that make fundamental analysis useless, then trading should be simple as there are no outside influences controlling price direction other than central bank policy.   Just follow their lead and let them do all the heavy lifting. 

Thu, 05/30/2013 - 11:34 | 3610585 buzzsaw99
buzzsaw99's picture

go for it

Thu, 05/30/2013 - 11:46 | 3610622 DaddyO
DaddyO's picture

So are you following their lead and how's it working out for you?


Thu, 05/30/2013 - 11:02 | 3610467 angel_of_joy
angel_of_joy's picture

This Gundlach guy gets better by the day... and his voice has a nicer pitch than Schiff's, too !

Thu, 05/30/2013 - 11:46 | 3610621 Mountainview
Mountainview's picture

Exactley, and I will only invest in markets without fancy Central Bank policies...there remain only a few...

Thu, 05/30/2013 - 11:02 | 3610470 youngman
youngman's picture

Its funny how everyone now knows the central banks are the market...and we are just on for the ride...but we still try to steer the wagon....we are going to find out how much POWER these cental bankers have as they are going to need it all to save themselves....I predict unlike the 20's when it was just the Weinmar Republic with the hyperinflation....I see the whole western world curriencies getting sick to where no one wants them....where a Colombian Peso is better than a japanese yen or a US Dollar....

Thu, 05/30/2013 - 11:13 | 3610477 Kreditanstalt
Kreditanstalt's picture

Trend-following momentum monkey #1...

These guys have sooooo... much (leveraged) money  they'll swamp any market which they're in when they sell out and there'll be no profit whatsoever left in it.  Our only hope is to bet on something that is unpopular and un-trendy and in short physical gold.

Thu, 05/30/2013 - 11:17 | 3610534 Bendromeda Strain
Bendromeda Strain's picture

Exactly - he is expecting his paper silver bet to hold value until needed? Good luck getting cashed out before your estimated gains are realized.

Thu, 05/30/2013 - 11:22 | 3610549 fonzannoon
fonzannoon's picture

He owns phyz. Phyz everything. Art...etc.

Thu, 05/30/2013 - 11:58 | 3610652 Likstane
Likstane's picture

phyzz applz?

Thu, 05/30/2013 - 12:05 | 3610664 fonzannoon
fonzannoon's picture


Thu, 05/30/2013 - 11:05 | 3610479 IamtheREALmario
IamtheREALmario's picture

Seems as if the central banks should be liable for ALL MARKET LOSSES THAT ANYONE INCURS IN THE MARKET from the point at which they started manipulating the markets. It is not a free market because of the Fed and the Fed is using its monopolistic money creation power to pick winners and losers, including Fed associated banks that have inside information on Fed manipulation.

I believe that somewhere written into the Federal Reserve Act of 1913 there is something about the Fed not being criminally prosecutable... however, I do believe that it can be sued. And, if our politicians had any sense of morals or ethics they would re-evaluate the process under which the Federal Reserve Act was passed and have it challenged in the courts.

Alas our policians are afraid to be anything but pathetic corrupt puppets.

Thu, 05/30/2013 - 11:08 | 3610490 Zen Bernanke
Zen Bernanke's picture

good point, however, it should be fairly obvious to everyone by now the politicians are either complicit in this charade or so stupid they can't comprehend it. 

Thu, 05/30/2013 - 11:25 | 3610560 Spastica Rex
Spastica Rex's picture

Hanlon's Razor

Thu, 05/30/2013 - 11:05 | 3610480 GrinandBearit
GrinandBearit's picture

AAPL?  The innovation died when Jobs did.  Taking an iphone and strapping it to your wrist is not innovative.  Taking an iphone and putting it inside a tv is not innovative either.

The stock buybacks will keep it up for a little while, but Samsung is eating their lunch.

Thu, 05/30/2013 - 11:36 | 3610589 nantucket
nantucket's picture

whoa, whoa...hold up a minute.  Steve Jobs DIED???

Thu, 05/30/2013 - 11:40 | 3610602 nope-1004
nope-1004's picture

Agreed.  But in addition, brokers need churn.  They need volatility to make gambling worth while.  My broker told me once that "all stocks have a shelf life and the key is to know when that shelf life has run its course".


Thu, 05/30/2013 - 12:17 | 3610687 Solon the Destroyer
Solon the Destroyer's picture

A broker that speaks in vague generalities. How unusual.

Thu, 05/30/2013 - 11:05 | 3610481 SIOP
SIOP's picture

"Since we're dealing with markets that are being manipulated by central bank policies, there is no such thing as economic analysis anymore"

*GASP!* Finally someone actually said it out loud! I imagine all the Cramers and other talking heads would squirm and scream in denial if confronted with this fact.

Thu, 05/30/2013 - 11:18 | 3610538 semperfi
semperfi's picture

"Since we're dealing with markets ..."

there is no such thing as markets anymore - just casinos

Thu, 05/30/2013 - 11:26 | 3610566 astoriajoe
astoriajoe's picture

...there is no such thing as markets anymore - just muppet harvesting.

To me, casinos implies random chance, and that doesn't really seem accurate anymore either.

Thu, 05/30/2013 - 11:59 | 3610655 semperfi
semperfi's picture

how about "rigged casinos"?  (a redundancy)

Thu, 05/30/2013 - 12:09 | 3610673 astoriajoe
astoriajoe's picture

fair enough

Thu, 05/30/2013 - 11:05 | 3610483 Snoopy the Economist
Snoopy the Economist's picture

"I think if the stock market falls, which is almost guaranteed to fall sometime between now and year-end, it's almost guaranteed."


Someone should tell him there are no guarantees except...print MOAR!!!!!

Thu, 05/30/2013 - 11:07 | 3610492 Stuck on Zero
Stuck on Zero's picture

We're in a deflationary world?  Has this guy been to a store lately?


Thu, 05/30/2013 - 11:37 | 3610594 shovelhead
shovelhead's picture

The grocery store is worth less but the stuff inside it costs more.

Deflation and inflation. Everybody gets to be right. :)

Thu, 05/30/2013 - 12:06 | 3610666 Buckaroo Banzai
Buckaroo Banzai's picture

Deflation in the things you want, inflation in the things you need.

Unless you are very rich, then it's also inflation in the things you want (art, classic cars, penthouse apartments on central park, ski chalets in Aspen, etc.).

Thu, 05/30/2013 - 11:10 | 3610498 Temporalist
Temporalist's picture

I heard aapl is removing one of the two cameras on the touch.  Now how am I going to simutaneouly photo my bum and the CB fist being rammed up it?

Thu, 05/30/2013 - 11:13 | 3610516 Yen Cross
Yen Cross's picture

     I love silver.

Thu, 05/30/2013 - 11:15 | 3610524 semperfi
semperfi's picture

"so you have to be diversified"

so, silver  -and-  gold

Thu, 05/30/2013 - 11:18 | 3610532 Yen Cross
Yen Cross's picture

 And platinum.  xau & xag would be higher today if it weren't for the lopsided paper shorts. xau should be up $50 today on that dxy selloff. It's early though.

Thu, 05/30/2013 - 11:19 | 3610542 semperfi
semperfi's picture

and throw in palladium for good measure - outperforming the other 3 as of late

Thu, 05/30/2013 - 11:23 | 3610555 fonzannoon
fonzannoon's picture

If I go buy a ASE will that help them have to cover? I'll do it.

Thu, 05/30/2013 - 11:29 | 3610569 astoriajoe
astoriajoe's picture

bring a friend.

Thu, 05/30/2013 - 11:39 | 3610599 Dr. Engali
Dr. Engali's picture

Don't forget lead which has outperformed evry other asset class.

Thu, 05/30/2013 - 11:56 | 3610649 Yen Cross
Yen Cross's picture

    Makes great radiation shielding to.

Thu, 05/30/2013 - 12:09 | 3610671 Buckaroo Banzai
Buckaroo Banzai's picture

Up 300% since 2005.

Thu, 05/30/2013 - 20:26 | 3612166 fuckitall
fuckitall's picture

G&S will be kept in the shitter until US dollar collapses (loses reserve currency status).   At that moment both will skyrocket. 

"moment" might be a day, maybe a week tops.  It will be fast, furious, and massively chaotic.  If you're not in already, you won't be able to get in. 

I'm talking physical.  When USD collapses, paper plays won't matter anymore, they might pay out but it'll be worthless dollars.

"so you have to be diversified"

Bullshit.  Anyone with a pair of working eyes can see what's happening.  Printing and currency debasement.  It's the only real story anymore, and we know how it will end, USD won't be a major currency much longer. 

"Diversified" my ass.  We know exactly what the winners will be, anything physical that most people want, even in an economic depresson, which we'll have around the time USD loses reserve status (hell, we're in one now), and yes G&S will suddenly be in great demand by blind sheep who just woke up in panic.

Yes, it'll be panic.  Unmitigated horrifying panic. 

But everything will be peachy keen right up to that moment.

There's nothing new here.  History is full of examples of this very thing.  And no, it won't be different this time.  It might take a bit longer, but the outcome won't be different.

Thu, 05/30/2013 - 11:38 | 3610596 the grateful un...
the grateful unemployed's picture

yeah but gold is better hedge against deflation, if you read between the lines

Thu, 05/30/2013 - 12:23 | 3610698 Solon the Destroyer
Solon the Destroyer's picture

Agreed. I'd like to have seen Gundlach expand his thoughts in this area as I thought they were misleading.

Placing Gold in the inflation-hedge box is pretty disingenuous too (despite the huge number of ZHers that do the same thing).  There was inflation every step of the way from 1980 to 2000 and gold didn't bat a single sexy eyelash.

Gold is a deflationary hedge as much as it is an inflationary hedge.  That is, it is a hedge against a monetary crisis, and both deflationary depressions and hyperinflationary blowouts are representative of that same phenomenom: currency crisis.

Thu, 05/30/2013 - 11:14 | 3610518 trillion_dollar...
trillion_dollar_deficit's picture

B-b-b-b-b-b ... But KRUGMAN said this morning that the markets were acting like this cuz a real recovery is taking hold.


Thu, 05/30/2013 - 11:14 | 3610519 EmileLargo
EmileLargo's picture

Yes the gold is "dead money" has some merit to it if you can earn positive real interest rates. I think he is missing the point about both gold and silver. Gold is not a hedge against inflation, it is a hedge against a complete collapse of the financial system and/or outright fraud/confiscation by the authorities as in Cyprus. Rather than arguing for silver and against gold, you should have BOTH.

Regarding the income earning stock argument, you won't earn much from stocks at these prices. March 09 was the time to buy some great stocks. Now isn't the time.

Thu, 05/30/2013 - 11:42 | 3610613 BlackChicken
BlackChicken's picture

Very well said E.L.

Positive real rates are not on the horizon until the QE is over, and that is not going to happen any time soon.

To me gold/silver are not really hedges (but still work that way), they are my intentional removal from a bat-sh$& crazy system designed to make me lose.

Thu, 05/30/2013 - 12:24 | 3610702 Solon the Destroyer
Solon the Destroyer's picture

Well said. If I had only read a few inches farther I could have saved myself a bunch of typing above. +1.

Thu, 05/30/2013 - 11:17 | 3610536 Fix It Again Timmy
Fix It Again Timmy's picture

How can things possibly be normal?  The entire economic world is infected with the "central banking virus" and its vitality is in the dumps.  Think about it - when you had a serious case of the flu virus, did you feel like having a roll in the hay with that hot number a couple of doors down?....

Thu, 05/30/2013 - 11:30 | 3610572 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Off topic but file under GET OFF MY LAWN!

The photo, released by McCain’s office, shows McCain with a group of rebels. Among them are two men identified in the Lebanese press as Mohamed Nour and Abu Ibrahim, two of the kidnappers of the group from Lebanon.

A McCain spokesman said that no one who met with McCain identified themselves by either of those names....

U.S. Senator John McCain was photographed with a known affiliate of the rebel group responsible for the kidnapping of 11 Lebanese Shiite pilgrims one year ago, during a brief and highly publicized visit inside Syria this week....


The pilgrims were kidnapped by armed rebels in Azaz, in Syria’s Aleppo province, in May last year as they were making their way back to Lebanon from Iran.

Two of the kidnapped, Anwar Ibrahim and Hussein Ali Omar were released in August and September but intense negotiations are still underway for the remaining nine, believed to be in the custody of the “Northern Storm” brigade, headed by rebel commander Ammar Al-Dadikhi, aka Abu Ibrahim. The Northern Storm Brigade also claimed responsibility for the kidnap of a Lebanese journalist in October....


According to families of the remaining captives and one of the released men, Anwar Ibrahim, one of the men standing alongside McCain in photographs released by the senator’s office, is Mohammad Nour, the chief spokesman and photographer for the Northern Storm kidnappers. Nour appears in several shots where McCain is posing with different officials.

Ibrahim and other members of the kidnapped family said they recognized Nour, and another man affiliated with the group, also identified as “Abu Ibrahim,” immediately after seeing the photos, widely circulated by international media following McCain’s visit.

Ibrahim, who had seen Nour multiple times in person during his captivity, said he was a close affiliate of Dadikhi who had photographed him and his fellow captors during the media campaign surrounding his kidnap. Nour has also acted as the spokesman for the kidnappers.

Photographs of Nour with the group of kidnapped pilgrims have been independently verified by The Daily Star. In the photographs released by McCain’s office, he is seen standing holding a camera, behind and in front of the senator as he poses alongside Idriss....

Thu, 05/30/2013 - 11:37 | 3610593 Dr. Engali
Dr. Engali's picture

McCain is a corrupt old bastard whose downfall is a long time past due. The counrty would be a lot better place without that weasle.

Thu, 05/30/2013 - 11:43 | 3610614 shovelhead
shovelhead's picture


A Cheney and Saddam handshake photo to put in the "What the fuck was I thinking" album.

Thu, 05/30/2013 - 14:36 | 3611132 Hohum
Hohum's picture


It was Rumsfeld, not Cheney.  Or did both of them have a photo shaking Saddam's hand?

Thu, 05/30/2013 - 11:55 | 3610647 pazmaker
pazmaker's picture

If only they would have kidnapped McCain!  For someone who spent time as a POW he is certainly a warmonger.  This is most likely the same group that kidnapped the two Orthodox Bishops who are still missing, kidnapped near Aleppo.

Thu, 05/30/2013 - 12:12 | 3610677 Buckaroo Banzai
Buckaroo Banzai's picture

I am seriously starting to wonder just how bad his time was in the POW camps. We're told he was tortured and was a war hero. I'm starting to think he spent that time looking out for Number One. If you know what I mean.

Thu, 05/30/2013 - 12:07 | 3610668 Catullus
Catullus's picture

It's both a violation of the Patriot Act and the Logan Act

Also, the defense department needs to release their files on John McCain's broadcasts on N. Vietnamese radio during the war. He was full cooperating with his captors and gave away intelligence the entire time. The North Vietnamese government would even put his interviews on broadcast radio to demoralize US troops. He's spent a good part of his life preventing that from being released. And when anyone brings it up to him, he exploded in rage.

Thu, 05/30/2013 - 12:13 | 3610682 Buckaroo Banzai
Buckaroo Banzai's picture

Ha! just read your comment moments after posting mine above. Well well well. I did not know this. And I'm usually up on these things!

Thu, 05/30/2013 - 12:54 | 3610801 TNTARG
TNTARG's picture

THose in the middle of this corrupted élite happen to be the coward ones.

Thu, 05/30/2013 - 12:11 | 3610676 chubbar
chubbar's picture

How come a U.S. senator gets to give aid and comfort to Al Cia Duh linked forces without gettng disappeared by NDAA regulations? If anyone of us here at ZH had done that we'd be on our 25th waterboarding session already. Guess it's called Just Us.

Thu, 05/30/2013 - 11:32 | 3610581 icanhasbailout
icanhasbailout's picture

It's not so much analysis as philosophy. Don't just buy the dip. Be the dip.

Thu, 05/30/2013 - 12:29 | 3610720 ParkAveFlasher
ParkAveFlasher's picture

There is no dip.

Thu, 05/30/2013 - 11:34 | 3610584 q99x2
q99x2's picture

Diversified like the hedge funds being in real estate. idiots.

Thu, 05/30/2013 - 11:37 | 3610590 buzzsaw99
buzzsaw99's picture

"I think if the stock market falls, which is almost guaranteed to fall sometime between now and year-end...

Yeah, sure it will. After it goes up another 12% it will drop 0.00000002% one day in September.

Thu, 05/30/2013 - 11:44 | 3610617 nantucket
nantucket's picture

exactly, it's a worthless, meaningless statement by Gundlach.  glad other people see the jackassity of it.


he left himself some wiggle room, he said "almost" guaranteed. 

Thu, 05/30/2013 - 11:38 | 3610597 Catullus
Catullus's picture

Natgas? It doubled once so it'll double again.

No more economic analysis indeed.

Go play craps.

Thu, 05/30/2013 - 11:42 | 3610606 nantucket
nantucket's picture

so many of these investment letters are so masterful at soundling like they are advocating a definitive position, but in realtiy they are so vague that six months, or a year later, no matter if the markets or idea went up or down, they can write that the trade they discussed in the past "worked". 


Portfolio managers are so good at speaking everything but saying nothing.

Thu, 05/30/2013 - 11:47 | 3610626 muleskinner
muleskinner's picture

Diversified dischmversified.


I received a phone call sales pitch a while back to buy silver contracts, the price was 32 - 33, and the salesman tried to convince me that silver could possibly go to 150.


I 'splained to him that I thought silver would end up between 25 and 26, which implied doubt that it will fly to 150.  Heard that kind of talk 30 years ago when silver was 50 and the Hunt Brothers got caught with their pants down.  It was going to go to 700.  yeah, right.  But, I bought silver anyway, out of fear, of course.  The world was going to end and I was going to have to live by my wits in the mountains and the world would never see civilization again, everything was all wrong back then too.  Somehow, civilization has managed to survive, but it's looking bleak.


I have had that 'dead money' for thirty years now and I go and take a look now and then and it's right there where it has been all those years.  It can be dead for all I care, but I've got it.  If it's dead money, I'll keep it anyway.  Still looks good even if it is dead.


Dead money talks!

Thu, 05/30/2013 - 11:47 | 3610627 the grateful un...
the grateful unemployed's picture

so there is nothing but CBs imagination, so buy ??! i imagine Japan having an economic Chernobyl, and people leaving the island. [anyone got stats on Japanese financial expats?]  my imagination is as good as theirs. the market is overvalued, and its going down, but you can't get out? sounds like CB heroin to me. tell you what else i imagine, the CBs have created an economy which looks like it did before the sun set on that empire. now what you have is a THEME PARK economy, lots of bells and whistles, fun rides, Jim Cramer in a mouse suit, just remember this about THEME PARKS, you pay to play....

Thu, 05/30/2013 - 12:27 | 3610641 firstdivision
firstdivision's picture

Again, natual gas in the short term is a terrible investment.  Capacity out of the Marcellus is about to increase exponentially.

Also, when it comes to electricity generation, natural gas units have been more expensive to run than coal units. (pg 129) Also, look at the EFOR rats for Gas/CC units.  Pretty high compared to others. Until many of the excess coal piles from all generators are burned down, and they increase their demand on their current coal contracts, coal will be the way to go for electricity generators. Unless our summers continue to set records year after year for heat, you're going to see production is way ahead of consumption by years end


Two questions for Mr. Gundlach, 1) How would you go long Nat gas, synthetics through ETF, producers, or actual forwards?  2) Your point on NG doubling, what time frame are you referring to, from when it was artificially low due to Centaurus Adivsors unwinding, or from the end of the 90's? 

Thu, 05/30/2013 - 12:49 | 3610781 Meremortal
Meremortal's picture

If you are right, then pipeline and drilling companies, among others, are going to make a lot of money and pay out a lot of dividends.

And I think you are right.

Thu, 05/30/2013 - 12:57 | 3610811 the grateful un...
the grateful unemployed's picture

pay no attention to inventories. in order for NG to rise to parity with other energy sources it must have common usage. if everyone uses NG in some form, then the price to rise to the same BTU equivalent [since there are no natgas refineries, no CAFE standards, it could be worth more, but first we have to see if LNG will run cars] right now they are working to send LNG to Japan. the play in my estimation is the wholesale change from crude oil products to NG. [and complete energy independence] since the current POTUS has no desire to promote NG, we have to wait for the next guy.

Thu, 05/30/2013 - 11:54 | 3610643 orangegeek
orangegeek's picture

Oil charts are down in the morning and up in the afternoon - long lower shadows - it's looks so fucking bizarre.  Been this was for weeks.


Forecasts say the markets will collapse in the next 1000 years. 



Thu, 05/30/2013 - 11:55 | 3610646 adr
adr's picture

There is no economic analysis of the market, yet he goes on to analyze it anyway.

Bullish on Natural Gas is saying you want to destroy what's left of working America. Anyone that wants to see nat gas double from the current price is a true terrorist.

At $3.65 per MCF is costs around $140 a month to heat a 1200 sq ft home with a 95% efficient forced air furnace to 70 degrees with an average outside temperature of 28. You double Nat Gas, you double that cost. When nat gas went over $10, some people were paying $600 a month to heat their home.

As it is right now there would be riots over heating costs if it weren't for the HEAP program allowing low income deadbeats to sit cozy all winter in shorts and t-shirts for $20 a month.

Thu, 05/30/2013 - 12:10 | 3610674 Catullus
Catullus's picture

Higher prices are terrorism?

Thu, 05/30/2013 - 12:27 | 3610712 the grateful un...
the grateful unemployed's picture

good point we'd be screwed if the free market were to price NG at the same dollar per BTU metric as crude oil. i think we also need to respect the way they have kept food prices from raising to a point where we all starve to death [how much corporate welfare does Monsanto get?]  GITMO SI! GMO NO! [what if the hunger strikers refused to eat genetically modified foods? would that get them on the evening news, and maybe a write of habeas corpus, a trial, anything?] yes Americans are fat and happy, which is what the political encumbents like to see. only some marxist radical would want to overturn this system, and throw thousands into poverty. yes its a tough choice world

Thu, 05/30/2013 - 13:36 | 3610918 Non Passaran
Non Passaran's picture

> Anyone that wants to see nat gas double from the current price is a true terrorist.

I suggest you go all in and sell it cheaply to maintain the price should it start getting expensive.

> When nat gas went over $10, some people were paying $600 a month to heat their home.

Because that's how much it cost.
When silver went to $45 I could buy only one ounce of silver for my monthly savings of $45 bucks. It was your fault, you ZH terrorists.

Thu, 05/30/2013 - 14:25 | 3611090 ceilidh_trail
ceilidh_trail's picture

ADR- I was one of those people paying $500+ a few years ago. The only hedge I have is to own energy via stocks/funds. Eventually, when the furnace dies (40+ years old), I'll replace it with an energy efficient one. But, why replace a reliable furnace with a modern one that might last ten years? Better to save the $$$ and invest in more energy. With the plans for LNG exports, I know I'll be saying goodbye to my old Bard soon enough if Gundlach gets his wish...

Fri, 05/31/2013 - 01:07 | 3612767 e-recep
e-recep's picture

well, the americans will have to live in smaller homes. it's cheaper to heat a smaller place. riots won't bring the heating costs down.

Thu, 05/30/2013 - 12:07 | 3610662 ekm
ekm's picture

Well, even Gundlach is saying what I've been saying.

Let me repeat this again:


- Gov data are erroneous on purpose = propaganda

- Federal reserve data are misleading

- Federal reserve meetings notes are on purpose misleading

- Private individual data are geared to mislead the competition.



Guess your own data and make conclusion based on that.

Countless of hours of reading is required.

Thu, 05/30/2013 - 12:09 | 3610672 Peter Pan
Peter Pan's picture

Gundlach totally lost me when he said that the Japanese stock market is the place to be.

Next thing he will be telling us is to buy a weekender in Fukushima.

Thu, 05/30/2013 - 12:13 | 3610681 topspinslicer
topspinslicer's picture

Jeffy must have been reading my GLD and SLV yahoo message posts from like 4 or 5 years ago regarding economic analysis. Welcome to the club jeffy

Thu, 05/30/2013 - 12:16 | 3610683 Meremortal
Meremortal's picture

But some can still use the false stats to produce chart after chart showing whatever they like.

I agree with the writer. The stats can't be trusted. so quit using them already. Admit that no one knows much due to bad stats and a manipulated, centrally planned eceonomy.

There are a few things we know. Here's one: it is obvious that Bernookie is dancing, trying to act like he controls interest rates. But he is dancing to the bond market's tune, following it for now by jawboning about 'tapers' because bond yields are rising and he will have no choice but to follow or be destroyed.

The bond market is one of the last things you can use for forecasting as it's too big for even Bernookie to challenge or manipulate. Bonds have already moved, and Bernie is scrambling to sound relevant as the Bond Market brings QEi to an end.



Thu, 05/30/2013 - 12:44 | 3610763 mberry8870
mberry8870's picture

"there is no such thing as economic analysis anymore"


Great line, it's called story telling, ficition of course but story telling nonetheless.

Thu, 05/30/2013 - 12:46 | 3610770 muleskinner
muleskinner's picture

Did Jeff buy Tokyo Electric Power when it was 132 yen?

Thu, 05/30/2013 - 12:53 | 3610787 ebworthen
ebworthen's picture

AAPL?  Really?

If the stock market falls Apple will do well because of it's "P/E" ratio?

When is a cash machine not a cash machine?  When the companies products lose their cache.

Apple is one bad product launch away from being a $200 stock.  A stock market fall with a market shift could make Apple a sub $100 stock.

Let me tell you of a trend I see:  my kids use their phones for everything.  Not even the iPad or netbook wins the battle.  Their eyes and ears are sharp.  They don't seem to mind watching T.V. shows or movies on a 3" screen with headphones.

This means potentially that Apple has ONE product - the iPhone - and one bad iPhone could kill this Golden Goose.

(p.s. - The Copernicus of Cupertino Steve Jobs has passed on)

Thu, 05/30/2013 - 12:52 | 3610792 mickeyman
mickeyman's picture

If I master my "customer service" maybe the C Bankers will give me some tips?

Thu, 05/30/2013 - 19:50 | 3612047 WTFUD
WTFUD's picture

Me finks you get brownie points and a leg up the ladder from da warlords by how many new people you fuck over just like insurance cadets.

Anyone experiencing difficulties with connection Only on Z/H voting etc As when i order a pizza online it gets here before i've completed my order.

Even WB7 couldn't beat a picture of McCain strung up naked upside down with his penis in his mouth.

Sat, 06/01/2013 - 17:01 | 3616968 jeditolstoy
jeditolstoy's picture

We live in a bizarro world, where we have both inflation and deflation. If gold is real money, and it is, then we're highly deflationary in real money terms. But in USD and other currencies, we're inflationary. So in a way, inflation is deflation, in gold. Natural deflation is good, like we had in the 1800's; but in a Fed propped up world, and government's drowning in debt, Fed induced deflation is dangerous. They've backed themselves, and the sheeple, into a corner. End the Fed.

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