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DoubleLine's Gundlach Warns "These Markets Are Falling Apart"
The odds of a December rate hike have slipped in recent days from over 70% intraday to 64.0% today as, while economists remain convinced that rates will rise in December, traders appear a little less confident. One of the most outspoken - having doubted The Fed (and questioned the economy's ability to handle even a 25bps rate hike) since Spring - DoubleLine Capital co-founder Jeffrey Gundlach said on Sunday that the Fed may hesitate to raise rates given rocky economic and financial conditions making it clear, as Reuters reports, "certainly [a Fed] No-Go is more likely than most people think. These markets are falling apart."
The influential money manager, who recently warned that the U.S. Federal Reserve should not tighten monetary policy in December, said the Paris attacks could pressure stock markets around the globe, "which we know Fed officials have been watching, even if they try not to admit it."
Gundlach said about a rate hike next month that many economists believe will occur: "Certainly No-Go more likely than most people think. These markets are falling apart." Los Angeles-based DoubleLine oversees $80 billion in assets under management.
Gundlach cited a number of asset classes that are signaling deteriorating conditions: The S&P Leveraged Loan Index, which is at a four-year low, the SPDR Barclays High Yield Bond Exchange-Traded Fund "very near a four-year low" and the CRB Commodity Index at a 13-year low.
"You also have the Eurozone doubling down on stimulus. Fed raising rates? Really?"
Gundlach said emerging markets may lead developed markets lower against the backdrop of rising borrowing costs, noting that Latin American currencies have crashed and Middle East currencies are down. "No wonder" the yield premium demanded by the markets from emerging markets has been rising, he said.
Since the spring, Gundlach has said the U.S. economy and risk markets cannot digest a premature Fed hike... judging by the data and every market aside from stocks, he is right!
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True US unemployment is 23% and true US inflation is 5% to 8% higher than official estimates (see Chapwood Index). So true, real US GDP is 5% to 8% lower than official estimates.
Se we are in recession/depression already. So only a lying idiot would talk of hiking rates now.
These "experts" are teh eternal phool thinking that they will (or can) raise rates at this point. We agree with Jim Willie and others that there is NO chance of a rate hike. To infinity and beyond!
Talk of raising or not raising rates is like debating whether to trim yellow leaves or brown leaves from a rotting, disease filled tree. The FED like the tree must be completely uprooted, with no remanents left but a plot of soil for new plants. Chainsaw the dead trunk and branches, grind them and turn them into intellectual saw dust to fertilize a new system of liberty, decentralization & sound money.
Yes. So what? The meme of "everything is awesome" is still holding. You will know when that is about to break when TPTB bring back conscription...
asshole
Just another pigman talking his book. But since he's on my side of the trade, I gotta like him -- for now.
just officially announce we have been in a full blown depression for 7 years so we can get these markets rolling
Fed should: raise rates to 8%, then dissolve itself.
Fed will: 0% and QE4ever... coming soon.
What an idiot, doesn't he know there is a war on and war is bullish for stocks?
A few months ago the FED hesitated due to China. Now, it'll be France. Somewhere in the future, it'll be some other shit. The Bond King know bonds will implode once rates starts to go up and he'll get smacked.
It would be "interesting" if there was no such thing as "interest"...lol....get a loan and pay the fees upfront. If you cant pay the fees upfront you should not be getting a loan...and why did they call it "interest"???... I have an "interest" in the lady down the street who just got a divorce...I am "interested" in things people say on ZH articles.
Daddy said "son you're gonna drive me to drinkin, if ya dont stop drivin that hot rod lincoln" hah
Well, no shit.
A house built on sand...
Japan-Syndrome taking shape.QE4 or Bust!
Not raising intereset rates is benefitting Only those who can get them at near 0% !!!
The middle class and below has never had the opportunity to borrow at 0.25% or 1% as the big boys did.
If I only had a chance to borrow at 1% I would be making a killing ..... So we have a government that is benefitting a very small group of people at our expense.
Near zero % interest for surely is creating bubbles somewhere, maybe the bond marked, or some high yeald bonds.
But when those bubble deflate we sure will feel it one way or another.
geez, what the fuck did zero % do for the middle class? this mutha fucker can go fuck himself...
"The odds of a December rate hike have slipped in recent days from over 70% intraday to 64.0% today . . ."
Who's the bookee posting these odds?
CME via fed funds futures:
https://www.cmegroup.com/trading/interest-rates/files/fed-funds-futures-...
If the Fed raises rates, they'll be the only ones supporting the bubbles in stocks, real estate, student loans, and housing. On the one hand, just add a few zeros to the print command. On the other, slouching toward Zimbabwe.
That's their guys with the margin debt, empty houses, and millenial debt slaves. Rule one is always look after your own.
Looks like the banks have already been told December is off.
Mr. Yann Yellen hopes to restore confidence with a small increase in rates, just to lower them short afterwards (below zero) because the US eCONomy is in terrible shape. Recession !!