DoubleLine CEO Gundlach Warns of Coming "Killer" Recession
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In an interview with Bloomberg TV, DoubleLine Capital CEO Jeff Gundlach compared QE to a radioactive particle. He also said the U.S. would eventually face a "killer" recession, and that investors should "look toward Japan". While he didn't come right out and say it, Gundlach's warning was clear to anyone with an ear to listen. Godzilla!
Risk assets have "diminishing returns" on each round of QE and "it's almost like a half-life of a radioactive particle," said Gunlach. He doesn't see value in the U.S. stock market and thinks bonds are a safer bet.
"Broadly speaking, I think that investors should be looking for lower prices on most risk assets in these developed countries with the exception of Japan... Investors should be looking for the potential inflationary consequences of all this money printing exercise and the place to look for that is Japan," he said.
"The real killer is going to be the next recession. And there will be one," he stressed. "The policymakers are trying hard to have it both ways... Ultimately as you address the fiscal situation, you're going to run the risk of a recession. When the next recession comes, it's going to be a real killer because what exactly is going to be the policy response."
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Risk assets have "diminishing returns" on each round of QE and "it's almost like a half-life of a radioactive particle," said Gunlach. He doesn't see value in the U.S. stock market and thinks bonds are a safer bet.
"Broadly speaking, I think that investors should be looking for lower prices on most risk assets in these developed countries with the exception of Japan... Investors should be looking for the potential inflationary consequences of all this money printing exercise and the place to look for that is Japan," he said.
"The real killer is going to be the next recession. And there will be one," he stressed. "The policymakers are trying hard to have it both ways... Ultimately as you address the fiscal situation, you're going to run the risk of a recession. When the next recession comes, it's going to be a real killer because what exactly is going to be the policy response."
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