Gundlach: Fed May Surprise Markets?
Gundlach predicts.... “this is a big, big moment,” predicting that “interest rates have bottomed. They may not rise in the near term as I’ve talked about for years. But I think it’s the beginning of something and you’re supposed to be defensive.”
I think the reds are going to hit the button, build a bunker. Right.
He cited a July low of 10-year Treasuries that didn’t hold as evidence interest rates have hit bottom.
What have you done for me lately?
Gundlach, oversees more than $100 billion at Los Angeles-based DoubleLine. This year, his flagship $61.7 billion DoubleLine Total Return Bond Fund is lagging.
Oh, wait, his bond fund is sucking wind, he predicts higher rates and he has how much in the bond market?
The majority of Total Return’s assets were in mortgage-related securities as of June 30.
Ah-so. Again, if rates rise, his MBS and his fund gets murdered? He better be holding a barrel of rising rate hedge bets.
More debt spending may increase the cost of government borrowing by adding supply and making investors demand higher yields, he said.
More government issuance, means more government purchases, what little supply is afforded the market is snatched up quickly, lowering yields and raising prices.
David Schauer, chief investment officer at Hanson McClain Advisors now has about $200 million in the fund. “Probably if it were to grow to $75 billion, we’d be trimming back either substantially or completely.”
Oh, and there you have it.
The Nattering One muses... Obviously Gundlach knows where his bread is buttered. If the bond market follows his advice, rising rates, then he better be holding a load of hedges for such to cover his positions.
Over the last thirty years, those who have bet against lower rates, especially in Japan, have been on the wrong side of the trade known as the widow maker.
Betting against lower rates, as in furtherance of NIRP could make one's spouse a recipient of that aforementioned trade's namesake.
If the Fed raises Fed funds Sept 21, so what? They can raise again Dec 14 and then "come to the rescue" by cutting after the new incumbent takes over, sometime in Q217 when the shit will be declared to have really hit the fan. Election year remember?
I think the reds are going to hit the button, build a bunker. Right.
He cited a July low of 10-year Treasuries that didn’t hold as evidence interest rates have hit bottom.
What have you done for me lately?
Gundlach, oversees more than $100 billion at Los Angeles-based DoubleLine. This year, his flagship $61.7 billion DoubleLine Total Return Bond Fund is lagging.
Oh, wait, his bond fund is sucking wind, he predicts higher rates and he has how much in the bond market?
The majority of Total Return’s assets were in mortgage-related securities as of June 30.
Ah-so. Again, if rates rise, his MBS and his fund gets murdered? He better be holding a barrel of rising rate hedge bets.
More debt spending may increase the cost of government borrowing by adding supply and making investors demand higher yields, he said.
More government issuance, means more government purchases, what little supply is afforded the market is snatched up quickly, lowering yields and raising prices.
David Schauer, chief investment officer at Hanson McClain Advisors now has about $200 million in the fund. “Probably if it were to grow to $75 billion, we’d be trimming back either substantially or completely.”
Oh, and there you have it.
The Nattering One muses... Obviously Gundlach knows where his bread is buttered. If the bond market follows his advice, rising rates, then he better be holding a load of hedges for such to cover his positions.
Over the last thirty years, those who have bet against lower rates, especially in Japan, have been on the wrong side of the trade known as the widow maker.
Betting against lower rates, as in furtherance of NIRP could make one's spouse a recipient of that aforementioned trade's namesake.
If the Fed raises Fed funds Sept 21, so what? They can raise again Dec 14 and then "come to the rescue" by cutting after the new incumbent takes over, sometime in Q217 when the shit will be declared to have really hit the fan. Election year remember?
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