{"id":27178,"date":"2017-10-24T06:49:37","date_gmt":"2017-10-24T11:49:37","guid":{"rendered":"http:\/\/olduvai.ca\/?p=27178"},"modified":"2017-10-24T06:49:37","modified_gmt":"2017-10-24T11:49:37","slug":"gundlach-warns-the-order-of-the-financial-system-is-about-to-be-turned-upside-down","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=27178","title":{"rendered":"Gundlach Warns &#8220;The Order of The Financial System Is About To Be Turned Upside Down&#8221;"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\">Gundlach Warns &#8220;The Order of The Financial System Is About To Be Turned Upside Down&#8221;<\/a><\/h3>\n<section class=\"messages-holder\"><\/section>\n<section class=\"node sticky node-type-story node-full node-nid-605855\">\n<div class=\"sub-title-box\"><\/div>\n<div class=\"content\">\n<p><em><strong>&#8220;I&#8217;m not a big fan of bonds right now,&#8221; <\/strong><\/em>may seem like an odd way for the so-called Bond King to begin, but in an audience at<a href=\"https:\/\/www.vanityfair.com\/news\/2017\/10\/jeffrey-gundlach-volatile-bond-market\"> Vanity Fair&#8217;s Establishment Summit, <\/a>DoubleLine&#8217;s Jeff Gundlach told Bethany McLean, <em><strong>&#8220;I haven\u2019t been really [a fan of bonds] for the past four years, even though I manage them, and institutions have to own them for various reasons.&#8221;<\/strong><\/em><\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/player.cnevids.com\/embed\/59d43b8c2d1ca05596000025\/51097beb8ef9aff9f5000008\" width=\"560\" height=\"315\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p><strong>Gundlach urged investors to be \u201clight\u201d on bonds.<\/strong><\/p>\n<p><a href=\"https:\/\/www.vanityfair.com\/news\/2017\/10\/jeffrey-gundlach-volatile-bond-market\"><em>As Vanity Fair&#8217;s William Cohan reports,<\/em><\/a> Gundlach admitted \u201cI\u2019m stuck in it,\u201d of his massive bond portfolio, adding that <strong>interest rates have bottomed out and been rising gradually for the past six years.<\/strong><\/p>\n<div id=\"el_126648140\" class=\"hidden\" data-google-query-id=\"COC3y-6XidcCFUswaQodNBQHWw\">\n<div id=\"google_ads_iframe_\/5206\/invc.zerohedge\/indr_ads_2__container__\"><a href=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user3303\/imageroot\/2017\/10\/22\/20171023_breslow2_1.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user3303\/imageroot\/2017\/10\/22\/20171023_breslow2_1_0.jpg\" width=\"600\" height=\"315\" \/><\/a><\/div>\n<\/div>\n<p>Gundlach said<strong> his job now, on behalf of his clients, \u201cis to get them to the other side of the valley.\u201d<\/strong><\/p>\n<blockquote><p>When the bigger, seemingly inevitable hikes in interest rates come, <strong>\u201cI\u2019ll feel like I\u2019ve done a service by getting people through,\u201d <\/strong>he said.<\/p>\n<p><em><strong>\u201cThat\u2019s why I\u2019m still at the game. I want to see how the movie ends.\u201d<\/strong><\/em><\/p><\/blockquote>\n<p><strong>But it can\u2019t end well.<\/strong> To illustrate his point about the risk in owning bonds these days, Gundlach shared a chart that showed how investors in European \u201cjunk\u201d bonds are willing to accept the same no-default return as they are for U.S. Treasury bonds, pointing out that this phenomenon has been <strong>caused by &#8220;manipulated behavior&#8221; by central banks.<\/strong><\/p>\n<p><a href=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user3303\/imageroot\/2017\/10\/22\/20171023_gund.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user3303\/imageroot\/2017\/10\/22\/20171023_gund_0.jpg\" width=\"600\" height=\"313\" \/><\/a><\/p>\n<p><strong>European interest rates \u201cshould be much higher than they are today,\u201d<\/strong> he said,<\/p>\n<blockquote><p>\u201c&#8230;[and] <strong>once Draghi realizes this, the order of the financial system will be turned upside down and it won\u2019t be a good thing.<\/strong><\/p>\n<p>It will mean the liquidity that has been pumping up the markets will be drying up in 2018&#8230;<\/p>\n<p><strong>&#8230;Things go down. We\u2019ve been in an artificially inflated market for stocks and bonds largely around the world.<\/strong>\u201d<\/p><\/blockquote>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Gundlach Warns &#8220;The Order of The Financial System Is About To Be Turned Upside Down&#8221; &#8220;I&#8217;m not a big fan of bonds right now,&#8221; may seem like an odd way for the so-called Bond King to begin, but in an audience at Vanity Fair&#8217;s Establishment Summit, DoubleLine&#8217;s Jeff Gundlach told Bethany McLean, &#8220;I haven\u2019t been [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[88,317,16643,4318],"class_list":["post-27178","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bonds","tag-financial-system","tag-jeffrey-jundlach","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27178","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27178"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27178\/revisions"}],"predecessor-version":[{"id":27179,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27178\/revisions\/27179"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}