Corporate Debt and the Next Recession

Published on
March 8th, 2019
Duration
39 minutes

Corporate Debt and the Next Recession

The Interview ·
Featuring Jeff Gundlach

Published on: March 8th, 2019 • Duration: 39 minutes

In this wide ranging interview with Grant Williams, Jeff Gundlach, the founder and CEO of DoubleLine Capital, provides his valuable insights on the dollar, the explosion of the corporate bond market, and the rise of ETFs and passive strategies. He also touches on politics, weighing in on what “wealth tax” proposals will mean for the 2020 election. Filmed on February 20, 2019 in Los Angeles.

Comments

  • TM
    Tom M.
    15 April 2019 @ 02:16
    The Border Adjustment Tax would have been massively helpful in stopping the Socialists, too bad shortsighted people killed it.
  • JK
    Jan K.
    24 March 2019 @ 21:35
    All good, but Bitcoin _is_ going to a million :) Precisely because of all the debt and spending your way to prosperity nonsense. Why is that hard to understand?
    • TM
      Tom M.
      15 April 2019 @ 02:11
      Why would I be so stupid as to buy your Bitcoin for a million? Why wouldn't I buy one of a several thousand new cryptocurrencies created at a fraction of that price? Think of it this way: Every new cryptocurrency is clipping you Bitcoin.
    • YW
      Yowshi W.
      28 April 2019 @ 04:00
      Because 1 sat = $1
  • BK
    Brian K.
    20 March 2019 @ 10:57
    So if there was no 1.4T deficit, would GDP have been in contraction for 2018?
  • md
    mike d.
    14 March 2019 @ 13:24
    Regarding the bartender, as Jeff correctly calls her, check out mr Reagan on you tube regarding her and who is behind her. It is unreal. scary
  • FD
    Felix D.
    14 March 2019 @ 09:25
    does anybody know the name of the Morgan Stanley study he cites?
  • SY
    Steve Y.
    13 March 2019 @ 16:23
    Just to add to my comment below regarding opposing views between Gundlach and Bass. Again, Gundlach favors gold, while Bass favors dollar and treasuries. Yes, you can make the argument that gold and the dollar have an inverse relationship but this is not necessarily the case when the proverbial you know what hits the fan. Both can act as safe havens. Something is serioulsy brewing out there. Proceed with caution.
    • DP
      David P.
      14 March 2019 @ 21:59
      Not sure that is true. Kyle Bass was extremely bullish on gold coming out of the last market meltdown and even went so far to encourage the University of Texas Retirement Fund to put a billion dollars in physical gold--and to build a repository to hold it.
  • JS
    John S.
    13 March 2019 @ 03:12
    great interview, covered all the bases
  • MN
    Maverick N.
    11 March 2019 @ 16:53
    That was a good conversation. Although, we need Grant to sit down with Chris Cole and talk all things volatility.
  • SY
    Steve Y.
    11 March 2019 @ 04:44
    Curious to hear other views. It appears Gundlach and Kyle Bass, two highly respected fund managers, have totally opposite views in the sense that Gundlach says buy gold and emerging markets (weaker dollar/valuation premise) and Bass says buy treasuries and short Yuan/buy dollar (on China devaluation, global chaos), though specific time horizons may differ. But in IMO they both believe that that we are in/entering a bear market and/or global recession, and where they intersect is that both believe US equites will decline, probably below the recent December low. Personally I am short US equities, particularly growth stocks and companies with a lot of debt, and partially hedge with some emerging markets (if not for Bass' opinions on China and other concerns I might equally hedge with EM stocks). Would love to hear other thoughts?
  • DS
    David S.
    11 March 2019 @ 01:25
    The hard guitar/drum opening is not conducive to listening and thinking. DLS
  • DS
    David S.
    11 March 2019 @ 00:16
    Everyone should agree that MMT is a political agenda looking for a theory. If MMT would work, why tax anyone? Just print money. DLS
  • PM
    Polina M.
    10 March 2019 @ 21:08
    Here are a few notes I took always from this Awesome Interview: * Yes the 'Bear Market' has started * The US grew GDP by ~3% but it's debt grew ~7% of GDP, so they grew less than they borrowed, or it can be viewed as negative growth. * We will see an oversupply of Gov't Bonds (10-30 yr) with lower yields than 2 yr notes, this is due to the coming yield curve inversion. This will force the treasury to raise rates, therefore increasing the (US Nat. Debt) interest payment. * Total US gov't debt is actually closer to $123 Trillion, if you include 'unfunded liabilities.' To pay this off, the US would have to 'put away' ~10% of it's GDP to pay it off in 60 yrs. This is pretty much impossible as the US is foreseen to run a deficit infinitely. * Like others he also agrees that MMT is a garbage idea, "You can't spend your way out of debt". * He predicted Trumps victory in 2016, and thinks that 2020 might see the emergence of additional major political parties with popular presidential candidates. * If they are strong enough, this might result in no one getting the majority of the vote, than one house would pick the president and the other one, the vice, this is especially interesting because the houses have apposing party majorities. * He thinks Bernie has moved away from actual socialist economic issues like before and now focuses on SJW issues instead. This is interesting as there is actually a growing popularity for socialist ideas as shown by Octavia Cortez, even more than there was in 2016. It's curious to see that instead of embracing this trend, he is actually moving away it. * The Corporate Bond Market is double what it was 10-12 years ago, and it is very 'overrated' if you look at the Leverage ratio for these bonds, over 40% would be considered 'junk'. I think this makes sense as the past decade of record rates have allowed companies to improve their EPS ratio buy borrowing money to 'buy back' shares, (decreasing the EPS denominator) instead of trying to actually increase earnings. * An interesting phenomena/ scheme is happening, Corporate Pension Funds (CPF) are buying and holding bonds issued by thier own company as a large portions of their overall portfolio . This is currently working while those bonds are 'overrated'. Once the rating correction occurs, many funds will be forced to sell those bonds due to a requirement to only hold 'high quality' rated ones, this has multiple negative effects. For example the CPF invests $100 to buy your company bond at 5%, so the fund plans to grow by ~$5 per year. When those bonds are downgraded and the price is discounted 20%, the CPF is forced to sell their $100 bond for $80. Now they only have $80 to by a 'Higher Quality' bond, and will not only grow their fund by ~$4 per year or 20% less then before. Not to mention that the CPF flooding the market with their own bonds will only drive the prices down and reducing the companies future potential to borrow, this does not sound pretty. * The 'Passive Equity Investment' trend is curious as it is completely opposite of how it was. Historically Bonds were seen as the place for a 'passive' strategy as valuations and revenue streams were fairly predictable. Stocks had to be 'actively' managed as there were more factors that could drive the price of a stock. Now it's the opposite, people are actively searching for quilty yield, while throwing money into indexes without giving it much thought. * Jeff is Bearish on the USD. There are only two ways out of a unsustainable debt problem, devaluation or default, and he believes the latter will be avoided at all costs. * High Level Investment advice, LONG Emerging Markets (EM), SHORT S&P. In the Dec 18' downturn, EM out preformed the S&P which typically does not happen, and shows underlying strength. * The social trend to demand higher tax rates (+70%) will result in the rich moving their wealth into assets that can be 'hidden' from the gov't, out of traceable banks and funds, and into physical assets. I believe anonymous digital assets/currency will also grow in popularity. * Gold Bull, believes we bottomed at $1,100 If you think misunderstood something, please let me know
  • KJ
    Kelly J.
    10 March 2019 @ 18:24
    Adding to my previous comment on the subject of where all this 'socialism' and wish for 'free stuff' is coming from, the Financial Times had an editorial last week that properly destroyed the nonsensical notion that the 'independent bureaucrats' at the Fed (and other central banks) haven't been choosing winners and losers for a long, long time. Trickle-up policy is the actual intent of the nonsensical 'trickle-down' theory that says all will benefit if we just hand free money/credit to the rich. Ramping wealth and income inequality stats have long shown that theory doesn't work. Excerpts: Quantitative Easing Was the Father of Millennial Socialism "Is Ben Bernanke the father of Alexandria Ocasio-Cortez? Not in the literal sense, obviously, but in the philosophical and political sense. As we mark the 10th anniversary of the bull market, it is worth considering whether the efforts of the US Federal Reserve, under Mr Bernanke’s leadership, to avoid 1930s-style debt deflation ended up spawning a new generation of socialists, such as the freshman Congresswoman Ms Ocasio-Cortez, in the home of global capitalism. Mr Bernanke’s unorthodox “cash for trash” scheme, otherwise known as quantitative easing, drove up asset prices and bailed out baby boomers at the profound political cost of pricing out millennials from that most divisive of asset markets, property. This has left the former comfortable, but the latter with a fragile stake in the society they are supposed to build. ... Mr Bernanke, a keen student of the 1930s, understood that a “balance sheet recession” must be combated by reflating assets. By exchanging old bad loans on the banks’ balance sheets with good new money, underpinned by negative interest rates, the Fed drove asset prices skywards. Higher valuations fixed balance sheets and ultimately coaxed more spending and investment. However, such “hyper-trickle-down” economics also meant that wealth inequality was not the unintended consequence, but the objective, of policy. Soaring asset prices, particularly property prices, drive a wedge between those who depend on wages for their income and those who depend on rents and dividends. This wages versus rents-and-dividends game plays out generationally, because the young tend to be asset-poor and the old and the middle-aged tend to be asset-rich. Unorthodox monetary policy, therefore, penalizes the young and subsidizes the old. When asset prices rise much faster than wages, the average person falls further behind. Their stake in society weakens. The faster this new asset-fuelled economy grows, the greater the gap between the insiders with a stake and outsiders without. This threatens a social contract based on the notion that the faster the economy grows, the better off everyone becomes." https://www.ft.com/content/cbed81fc-3b56-11e9-9988-28303f70fcff
  • KJ
    Kelly J.
    10 March 2019 @ 16:06
    I agree with Douglas W below. I always enjoy hearing Gundlach talk, and Grant as well, and usually pickup some interesting facts and new perspectives. I like their insights, and like them both personally in many ways. But when they’re chuckling and putting down 'the bartender' AOC naively thinking she can dish out 'free stuff' and imply what an absurd idea it is that 'free stuff' would ever actually be available for regular mortals, they come off as arrogant. What have you been living on, boyz? Most of your lives, you’ve been living off the top skim from the pseudo-riches of the wealthy in the biggest rigged system, the largest Ponzi scheme of fantasy finance in history. You may correctly criticize the central bank spews or the idea societies can live off them, and I agree with you. But it’s worth remembering you might both have had to go out and get a real job - digging ditches or bartending yourselves - without central banks maintaining the false bubble your lives float on. Make no mistake: IMO, modern economic theory of infinite growth on a finite planet, the ‘emperor has no clothes’ notion that underlies capitalism in modern times, doesn’t work and will fail. Period. Hundreds of trillions of debt, of nominal brokerage account asset values of the wealthy and middle class, of health, pension promises globally will never, ever be paid out and converted into goods and services at projected value. The Fed has been giving 'free stuff' to the 1% for decades simply to hold that fundamental economic lie and the status quo structure in place with the primary goal of keeping the powerful in their perches. All of us who profit in finance are just part of the cast of characters being held aloft. So, wake up boyz! Of course, it can’t work long term to support an economy with expanding free money and credit. But I wouldn’t be so smug when talking about people who have not allied themselves with wealthy insiders like we have by our career choice and interests feel maybe they should get some ‘free stuff’ benefit from the ponzi pile as well. With all due respect - and I love you guys - when reality eventually starts hitting financial markets, bartender skills may be a lot more in demand than need for worthless paper jockeys like us, who think so much of our skills. ;-)
    • JD
      John D.
      11 March 2019 @ 13:27
      Best Comment of The Year... Well said ...
  • RM
    R M.
    10 March 2019 @ 14:36
    Milton: It would be nice to see a debate between the Buy Bonds, Wear Diamands team and the Bond Supply gonna outweigh Bond Demand. Roaul vs. Jeff perhaps, or similar.
  • CW
    C W.
    10 March 2019 @ 09:22
    I really hope Grant and Mr Gundlach will not find themselves in the same position with regard to MMT, as the incredulous investor when told that CDs were risky. I have high regard for both gentlemen and more than a little scepticism toward MMT, but I am not ready to dismiss it as sheer bunk. Anyway, it's a great interview and I enjoy it very much. Thank you.
    • CW
      C W.
      10 March 2019 @ 09:25
      Btw, I do not think MMT says there's no limit to spending, but the limits are not what the mainstream think they are.
  • JH
    Joel H.
    10 March 2019 @ 05:06
    Great! Always interesting getting Jeff's take on what's happening. Hope he comes back, hope we can a little more time with him next time! Thanks RV.
  • TZ
    Tibor Z.
    10 March 2019 @ 03:59
    I love the channel! This is the "NETFLIX OF FINANCE" ! You can use my words no copyright issues :)
  • GF
    Gordon F.
    10 March 2019 @ 01:21
    If you want to blame anyone about the proposals for a wealth tax, blame Warren Buffett. Always pontificating about how his secretary pays a higher tax rate than he does. All those jealous of his wealth listen to him and figure that if we can't tax his income, then just take a percentage of his wealth. Along with all the other greedy guys who have more than they do.
  • DP
    David P.
    10 March 2019 @ 01:05
    Is RV gonna get a smart democratic socialist politician to bring some balance to Liam Fox, Steven Bannon and Nigel Farage that appear to be present and future guest? Or get Bolsonaro,Matt Drudge and Rupert Murdoch next and further risk becoming an echo chamber? To quote Goebbels, If you repeat a lie often enough it becomes accepted as truth. Whether being right wing and left wing being the truth is out of the picture but there is a significant risk of repeating the same bias to people if you are interested into having them thinking by themselves in this age of behavioral economics, social credit systems and mass manipulation through social medias.
    • RP
      Ryan P.
      10 March 2019 @ 01:35
      A smart democratic socialist is an oxymoron; I don't think RV will be able to find one.
    • TS
      Timothy S.
      10 March 2019 @ 04:01
      Might consider Yanis Varoufakis. He is a marxist economist, an academic as well as a Greek politician. Super smart and very articulate ( in English).
    • NS
      Nathan S.
      10 March 2019 @ 06:22
      Goebbels was a smart National Socialist. Perhaps RVTV could arrange someone like that to do an interview?
    • FG
      Flavio G.
      10 March 2019 @ 20:18
      Timothy: If you check what Varoufakis said and says vs what he did while in government you will find the classic socialist pattern (of the worst EU-Champagne type): say: bla, bla; personal cash register: ka-chin ka-chin; executed: nothing. If you read his New Deal for Europe https://europeanspring.net/wp-content/uploads/2019/01/EuropeanSpring-Manifesto.ENG_.pdf you will notice that it is a nice collection of good intentions in which budgets don't matter, presumption of good intentions and behaviour is patent and execution in the hands of government and allocation of imaginary resources is miraculously impeccable. There is even a proposal for a European People’s Bank (EPB). I think the German's are achieving that one before anyone else once DB and CMK merge and the Frankenstein finally becomes fully socialized and ultra-TBTF. I follow him , AOC and a bunch of other socialists on Twitter for educational purposes -and you see them a lot since socialists are generally much more vocal than busy working people with common sense- but would hate to see them here taking RV resources away from more constructive and pragmatic guests.
  • dw
    douglas w.
    9 March 2019 @ 22:55
    Prob gonna get some shit for this but I've watched and listened to many of RV's vids and have been a big supporter of the content and community for years. But recently I've been listening to many people like Gundlach in the finance world crying about the "bartender" and imminent socialism. After the GFC a hyper version of central planning w/ interest rates at 5000 yr/ lows, heavy federal subsidies, protectionism-high tariffs, steep levels of nationalization(5g is coming courtesy of the government), rampant cronyism, large deficits, high government spending, bank and industry bailouts, overlapping bureaucracy, crushing national debt + huge tax breaks to corporate institutions at the end of a bull market, footing the bill to the American people- is by Definition a form of Socialism. Not dissimilar to the facist/socialist economic policies of Mussolini's Italy, and we all know how that ended. Ignoring a broken crony capitalistic system and pointing to a young group of people who are trying right the ship so their not f'd for the next 40 years is hilarious to me. These kids see the righting on the wall and the extra 2018 20% tax break so that the 1% can eek out an extra billion and go buy the last of the remaining available Donald Judd sculptures, isn't going to help Americans. If RV wants to remain unbiased and wishes to inject an important component of the discussion that Dalio, and others talk about (That this isn't going to end well and populism uprise could get real), they should be reaching out to these young politicians and young progressive thinkers that want to change things and be talking to them, not having a third interviews with Fund managers who belittle them. I think these kids don't want to turn the U.S. into Venezuela, they just want it to be more like Canada. And if there is another QE 4,5,6,7 let one of those be for the people.
    • AK
      Anthony K.
      9 March 2019 @ 23:16
      I agree with everything you said as far as problems but just don't agree with your solution being, because someone is young and progressive that somehow their platitudes have any more value than the knuckleheads currently in charge. Just because you are rowing to the left instead of the right when headed swiftly towards a waterfall doesn't predict a change in outcome. A pragmatic person is what you need to solve this.. and believe me.. no on wants that because the solutions are not going to be pleasant. Some pragmatists with some ideas and principles (as far as politicians go). Ben Sasse, Tulsi Gabbard, Rand Paul. But having principles is the last thing you need when trying to get elected. Just make promises you cant keep, get a media shill from the left or the right to push you and everything will end up fine. In other words,.. Nothing will change.
    • CC
      Colin C.
      10 March 2019 @ 00:22
      Although brilliant, I think Gundlach misses that although the US is irresponsible, other countries are basket cases, and that dollar bullish.
    • RM
      Ryan M.
      10 March 2019 @ 05:46
      It appears as though you missed the part where Grant & Jeff were very critical of the actions of government & central banks post GFC leading to massive debt levels. Their criticism of the rise of socialism is that it's merely adding fuel to the existing fire and is not the right solution to fix the current mess.
  • JB
    Jonathon B.
    9 March 2019 @ 22:40
    Am I the only one would would swap his kingdom for a volume level control for these videos?
  • SU
    Shakeel U.
    9 March 2019 @ 22:32
    Jeff Gundlach is the best speaker on Real Vision. Thank you GW & RV team.
    • SP
      Sunil P.
      12 March 2019 @ 03:08
      Jeff is the best speaker on practically every network. Love JG!
  • SP
    Sunil P.
    9 March 2019 @ 21:56
    Jeff is using language verbatim out of Peter Schiff's podcasts. He has used many analogies and now the term "The Bartender", which Schiff coined. I love both Jeff and Peter--I wish Jeff would footnote Peter Schiff once in a while since the media has demonized and censored Peter Schiff. When Jeff repeats the same ideas as Schiff, everyone listens. Amazing how dumb investors are.
    • F
      Floyd .
      9 March 2019 @ 23:28
      saying the two are the same is a big stretch,Peter is the boy who cried wolf and while at some point may be correct has been a disaster ,Jeff on the other hand has been more balanced and pragmatic and of course has the record.
    • RP
      Ryan P.
      10 March 2019 @ 02:04
      I noticed this as well.
    • AH
      Andrew H.
      10 March 2019 @ 08:03
      Floyd, it's really not a stretch at all. It's very clear that Jeff is using verbatim direct quotes like "the bartender" and analogies about debt from Peter's podcasts. It's okay and good because it's very important to get the warning messages out, but it would be better manners if he gave a little bit of credit to Peter Schiff for *direct quotes.* It's common courtesy.
    • NC
      Nic C.
      10 March 2019 @ 19:58
      is it not possible that someone who listens to Schiff's podcasts mentioned the "Bartender" in Gundlach's presence. Gundlach liked it and used it. Would JG then have to credit Schiff even if he had no idea who originally coined it?
    • DS
      David S.
      11 March 2019 @ 09:01
      Is it possible that it is just recent common parlance in the financial set? One should care about performance not word coinage. We are not talking about Heidegger here. DLS
    • SP
      Sunil P.
      12 March 2019 @ 03:06
      Floyd B.--Good point, thanks for reminding me of that. No argument that Jeff has impeccable time and Schiff has been terrible on timing. But Jeff is definitely quoting Schiff verbatim here, he is quoting Peter Schiff's podcast word-for-word and has been doing so for about 6 months now.
    • SP
      Sunil P.
      12 March 2019 @ 03:13
      Nic C.--Ordinarily I would agree, but he quoted Peter chapter and verse on CNBC several times since October. He repeated the exact same analogies about debt laden high school classmate who boasts his debt as a success versus another classmate who saved a million dollars with no debt but since he didnt own a big mansion and sports cars, he felt like a failure.
    • JO
      Johnny O.
      30 March 2019 @ 10:49
      Everyone calls the bimbo The Bartender. MABA = Make Alexandria a Bartender Again. However, she may be economically illiterate, she may flub questions and avoid debate, she may have been cast in the role of congresscritter after being nominated for a Justice Democrats casting call by her brother, but she is an effective communicator and her historically murderous ideas are directionally where the future of politics is headed.
  • NB
    Nikola B.
    9 March 2019 @ 17:55
    Could someone please explain what Jeff meant when he said that the ETF/passive investing is the definition of momentum investing? Is it because the more money goes into trackers, the most of it ends up in the stocks with highest weight in market indices? Would be very grateful for a good explanation.
    • JZ
      John Z.
      9 March 2019 @ 18:35
      You nailed it. S&P500, as an example, is free float market cap weighted, so as a company grows it'll become a larger portion of the index. It's momentum in the sense that as a company moves from, say, the 10th largest component of the index to the 1st or 2nd, you inherently own more and more of it as the price goes up. The opposite happens if one of those companies sells off. Passive essentially buys higher and higher and sells lower and lower.
  • MM
    Mike M.
    9 March 2019 @ 17:44
    Good stuff. Much appreciated.
    • NB
      Nikola B.
      9 March 2019 @ 19:18
      Thank you very much John for a very good and concise explanation!
  • SP
    Saam P.
    9 March 2019 @ 16:07
    Jeff is brilliant and very articulate....but the guy makes so many predictions along the way and then only points to the right ones in hindsight. He has somehow never been wrong or not predicted something correctly...
    • DS
      David S.
      9 March 2019 @ 18:49
      He is pretty good at predicting major moves. Keep a log for yourself to see how he is doing. DLS
  • DK
    Dennis K.
    9 March 2019 @ 14:50
    If i compare this interview with that of Kyle Bass, am i correct to conclude these are total oposite views ? Kyle: stronger dollar, lower interest rates, bonds up. Jeff, interest rates up , dollar down .
    • DW
      Daniel W.
      9 March 2019 @ 16:49
      Maybe someone who has been following Jeff and Kyle longer than me can help us out here but I must admit since I started following them 2 years ago or so they have been wrong on their marco calls on a extremely persistent basis.
    • DS
      David S.
      9 March 2019 @ 18:50
      I bet on Jeff's predictions. DLS
    • DK
      Dennis K.
      10 March 2019 @ 08:30
      The problem is, that it might sound crazy, stronger dollar, interest rates down and bonds up. But all the things which sounded logic to me the past 10 years.... did not come true. So if “they” can pretend 10 more years (why not...???).... Kyle’s scenario might come true. And all paper assets will keep rising. And Commodities will go nowhere.(and i have to admit that i really really like/love Jim Rogers)
    • SY
      Steve Y.
      10 March 2019 @ 22:55
      They have totally opposite views in the sense that Kyle is saying buy treasuries and the dollar (on China devaluation, global chaos) and Jeff is saying buy gold and emerging markets (weaker dollar). But in IMO they both believe that that we are in/entering a bear market and/or global recession, and where they intersect is that both believe US equites will decline, most probably below the low we saw last December. Personally I would short US equities, particularly growth stocks and companies with a lot of debt and maybe partially hedge with some emerging markets (if not for Kyle's opinions I would equally hedge with EM stocks). Would love to hear other opinions.
  • SH
    Stephen H.
    9 March 2019 @ 13:54
    Great interview Grant, you certainly managed to cover a lot of ground. Jeff has a high value thought processes and while I’m sure people will be negative on Jeff’s perspective and his calls, he delivers his views candidly, clearly and with rationale support for his thesis/worldview so you have to respect him.
  • AD
    Airvind D.
    9 March 2019 @ 08:46
    Big name, nothing new to be heard here. Every major FI shop knows that Doubleline has sourced alpha from taking credit exposure - which has been a good move to their benefit. On macro views, Gundlach been consistently wrong...
    • FG
      Flavio G.
      9 March 2019 @ 13:40
      Exposure and timing have to be good to generate said alpha, because if timing not right it would become negative alpha, right?
    • SD
      S D.
      9 March 2019 @ 16:42
      Who the heck are you? I'm SD.
    • AD
      Airvind D.
      9 March 2019 @ 18:12
      @SD very strange, looks like there is an error with RV naming - just edited my name.
    • AD
      Airvind D.
      9 March 2019 @ 20:23
      @flavio 100% right, timing is important. But when you keep those positions on consistently - structurally you will outperform during stable periods - however during risk off events, you are essentially taking equity risk and drawdowns will be large. There's a lot more nuance to this but, institutional investors expect their core bond manager to do well during downturns, if you take credit risk you'll be caught naked when the tide shallows
  • R
    Ron .
    9 March 2019 @ 06:12
    Brilliant interview! My hat's off to Grant [and naturally also to Jeff] for the dialog on so many topics. For those of you unfamiliar with the book, which was mentioned only in passing, it's by Charles Mackay and is titled "Extraordinarily Popular Delusions and the Madness of Crowds". This was first published 1841 and then reprinted in 1852. It was reprinted again a number of times between then and now, but the best edition to get and read is the reprint in 1980, with a forward by Andrew Tobias. E-Bay and Amazon usually have soft cover copies available. As we are entering an era where the madness of crowds will play an ever increasing role in the lives of even the sanest of us, this book may help you understand what is happening all around you. It's a brilliant read! And obviously a book well read and well understood by both Grant and Jeff. Thanks, again, Grant, for the thoughtful and brilliant interview.
    • pm
      preston m.
      16 May 2019 @ 04:15
      John Kenneth Galbraith - The Great Crash, 1929 (23:29 in the video)
  • SG
    Steve G.
    9 March 2019 @ 04:30
    Gundlach is always epic, period. no one runs at the mental rate he does and its enjoyable to have a guy do it. Captures attention in entirety. RV: Find more guys like this. Those with a million data points in their mind. They make the greatest conversations. Bass sort of does it. But Gundlach is the king for a reason! long live RV!
    • DS
      David S.
      9 March 2019 @ 18:55
      RVTV has a few up to Jeff's standard but there are not very many out there.DLS
  • WS
    Wm S.
    9 March 2019 @ 03:50
    The quick and easy rebuff of MMT by both Jeff and Grant here bodes excitingly well if Stephanie Kelton accepts RV's invite. Quick and easy is never quite quick nor easy when you're sitting in front of the flesh-and-blood advocate. Hope it happens. I'd like to see Grant engage the subject, which is a hot one.
    • AC
      Andrew C.
      11 March 2019 @ 03:20
      Grant, please get it to happen! Please!
  • NI
    Nate I.
    9 March 2019 @ 03:15
    Another masterpiece Grant! Great job. I only wish you would have had more time. I really wanted to know how Jeff would position for the disastrous trifecta in corporate bond downgrades, government largesse, and de-dollarization. Gold is obvious, but a smart investor might also find some fabulous shorts in the knock-on effects.
    • NC
      Nic C.
      10 March 2019 @ 19:52
      i thought long EEM/ short dollar was pretty clearly enunciated
  • RM
    Ryan M.
    9 March 2019 @ 02:47
    Terrific interview! Just wish it could've been longer
  • MM
    Mike M.
    9 March 2019 @ 02:21
    why can't I download videos for offline viewing anymore??
  • JH
    Jesse H.
    9 March 2019 @ 02:11
    Excellent - great to get Jeff’s thoughts. Thanks guys - this one from a heavyweight thinker / investor was chalk full of important, robust and yet straightforward insights.
  • DS
    David S.
    8 March 2019 @ 23:49
    Great interview as expected. "Most people want to be told what to think." Even more, most people want to be told what they already believe. Confirmation bias is a human norm. DLS
    • HJ
      Harry J.
      10 March 2019 @ 19:52
      Matt, The people you refer to damn sure will care when they experience the knock on effect of going down the path The bartender espouses. Refer back to Margret Thatcher comment. Socialism is great till you run out of other people’s money!
  • MS
    Matt S.
    8 March 2019 @ 23:09
    Retarded though AOC is, I think Trump was voted in to break up this mess the right way, and, seeing as he is actually as much of a swamp creature as those he was promising to drain out, AOC will be voted in, to break up this mess, even if it is the wrong way. People just won't care any more, as long as it gets broken up somehow.
    • DS
      David S.
      9 March 2019 @ 00:24
      I do not agree that OAC is retarded. I also do not agree with her positions. Neither OAC nor Trump’s positions have any interests in the good of the entire nation by promoting a better life for its citizens. With populist to the Left and populist to the Right a representative democracy cannot survive. The good news is we are very early in the next election cycle. This will give extremist on both sides time to make many misstatements. If we cannot get a government of centrists, which seems impossible, there is little hope. It is interesting that massive profit motivation of the news network on the Left and Right are hardening populist positions. Both may make a lot of money while destroying the United States. DLS
  • TZ
    Tibor Z.
    8 March 2019 @ 22:58
    So if I am getting it right with the othe interviews and macro charts. USD will go higher till 2020 or so. Gold will fall or make a complicated bottom and around 2020 it will rise stronger as the USD starts to weaken. And in general real assets will lead the rise. Copper, gold and so on.
    • DS
      David S.
      9 March 2019 @ 19:05
      The future is not knowable, but to invest you need a future framework. You can correct more quickly if you are a small investor - our only advantage. None of my trades move the market. DLS
  • NS
    Nathan S.
    8 March 2019 @ 22:53
    So “bitcoin isn’t going to a million” and yet the dollar is going to lose value. Hmmmm... so which is it mate?!
    • DS
      David S.
      9 March 2019 @ 00:25
      Both can be and probably will be true. DLS
    • NS
      Nathan S.
      9 March 2019 @ 07:50
      Wrong on both counts 😉
    • DS
      David S.
      9 March 2019 @ 19:06
      I like your confidence, but time will tell. DLS
    • NS
      Nathan S.
      10 March 2019 @ 06:30
      Yes, agree. Top three moneys / currencies to own... for me atm it’s USD, gold and bitcoin (in descending order). V interested to learn what others hold in that realm, it’s not a straightforward decision and the situation is probably dynamic/tactical in the time ahead.
    • DS
      David S.
      11 March 2019 @ 09:15
      Nathan S. - Since you asked. We are not that different. I am mostly USD, then a little gold and gold miners, followed by pot stocks. I don't smoke, but I think there will be more demand for pot than Bitcoin. DLS
  • TS
    Tamara S.
    8 March 2019 @ 22:49
    Great job, Grant! You asked all the right questions and covered lots of ground in your limited time. Looks like bull markets in EM, gold, and socialists.
  • NS
    Nathan S.
    8 March 2019 @ 22:35
    These are the Mogok pigeon’s blood rubies Jeff recommends carrying in your shoe: http://lotusgemology.com/index.php/library/articles/286-pigeon-s-blood-a-pilgrimage-to-mogok-valley-of-rubies
  • DR
    David R.
    8 March 2019 @ 21:54
    Be sure to visit the fantastic Buffalo Art Gallery in his hometown and its brand new $100-million Jeffrey Gundlach wing. If lucky, you might also catch Jim Grant there :). Those two should be declared President & Vice president and given unlimited executive power w.r.t. to finances, budget, treasury and the Fed (give Jim Grant the latter post, then fire the whole gang in the Eccles building and put it up for sale). Would solve many problems.
  • GF
    George F.
    8 March 2019 @ 21:13
    Grant, I have listened to every interview of yours I could find, many more than once, I check my Real Vision app twice a day, and I miss your podcasts. But you have got to go with argyle, man.
    • DS
      David S.
      9 March 2019 @ 19:14
      I do not think Grant is a Campbell. DLS
  • EN
    Eric N.
    8 March 2019 @ 20:19
    I can't wait to be told what to think next by Jeff! In all seriousness, that man is brilliant, I thoroughly enjoy watching the interviews with him - and well done, Grant.
  • SD
    S D.
    8 March 2019 @ 20:10
    Really great. Thanks.
  • PB
    Pieter B.
    8 March 2019 @ 18:54
    Amazing interview! Massive thanks Jeff and Grant!
  • PD
    Peter D.
    8 March 2019 @ 18:40
    Does anyone know anything about the painting? Who dunnit?
    • KB
      Kieran B.
      8 March 2019 @ 21:26
      Looks like Julia Nee Chu.
  • BC
    Brent C.
    8 March 2019 @ 18:27
    This is excellent. Far reaching discussion, short, med, & long-term thoughts. The implications of which could certainly be game-changers. Thank you to you both!
  • rr
    rlw r.
    8 March 2019 @ 17:39
    Thanks JG & GW. And as others have already suggested, hoping to hear from Jeff more often. Hoping Grant can keep scheduling him in more often!
  • CM
    Chad M.
    8 March 2019 @ 15:20
    Gundlach is amazing. Dude has such great ideas and perspective, but can disseminate that info like no one else. Clear, concise, and direct. Bravo Grant, RV and thank you Jeff!
  • RM
    Richard M.
    8 March 2019 @ 15:06
    Wow Grant - fantastic as usual!!! Please have Jeff back on (when he is feeling better) for a full hour (or two hours even better). He is such a brilliant thinker and has been so right on so many things (granted not all but still a pretty damn impressive track record). Thanks again for such a wonderful interview!
  • SS
    Steve S.
    8 March 2019 @ 14:56
    All hail the Bond King Jeff Gundlach! Simply the best out there. He even put Jim Cramer in his place and made him apologise.
  • RL
    Rui L.
    8 March 2019 @ 13:03
    Tks Jeff. Tks Grant. Tks RV. Really liked this take. So true. " People need to listen with their mind, as well as their ears and not just repeat what they're told. My biggest revelation in life was that people want to be told what to think, because I don't. And I do the same thing every human being does. You assume everybody is like you when you're young. You just know your own little world, and you don't know that there's many different ways of operating. And then you start to realize, gee, by assuming that everybody wants to figure things out for themselves, I'm not getting anywhere. And a few more years go by, and I'm still not getting anywhere. Then the light bulb goes on-- no, they want to be told what to think. "
    • IO
      Igor O.
      8 March 2019 @ 22:42
      -- is there any one thing that keeps you up at night? -- Nothing really keeps me up at night. I don't really worry about stuff anymore. I accept things the way they are.
  • RX
    Robert X.
    8 March 2019 @ 11:25
    MMT is a sham of course, but not sure that the point wasn’t lost: it’s a reaction to socialized losses for the wealthy by the Fed. ‘Give me some of that riskless return’ is the spirit of it. I am waiting for AOC to meet Rand Paul with respect to the Fed - much like Elizabeth Warren folds onto Steve Bannon when it comes to corporate governance opinions. Great interview - always worth the time to listen to Grant and JG.
    • DS
      David S.
      9 March 2019 @ 19:19
      People support any theory that supports their agendas - left or right. If there is not a theory, then belief without discussion works. DLS
  • GD
    Gustavo D.
    8 March 2019 @ 11:14
    I really enjoyed this interview. I would have to disagree with his view on bitcoin though haha.
  • FG
    Flavio G.
    8 March 2019 @ 10:16
    Gundlach, as usual, brilliantly clear. Luxury guest. The only thing I missed was a debt/QE parallel with Japan (given what many believe -and has partially been proven right- : Japan is our future).
    • CM
      Christopher M.
      8 March 2019 @ 12:02
      Almost all Japanese debt is owned by Japan. Almost all American debt is owned by everyone else. It's not the same.
    • FG
      Flavio G.
      8 March 2019 @ 12:52
      Sure Christopher? https://s.marketwatch.com/public/resources/images/MW-GO672_nation_MG_20180821130954.jpg ... and growing !
    • EN
      Eric N.
      8 March 2019 @ 20:20
      Japan: The Great Lab.
    • DR
      David R.
      8 March 2019 @ 21:42
      Japan and US are different in key ways: - Japanese population is declining; US population is rising; - Japan has a large, comfortable middle class. US has a small, shrinking, restless middle class. - Japan is a primarily a nation of buddhists; US is primarily christian; - Asian culture encourages obedience but also discourages constructive criticism; Western culture is largely the opposite; - Japan is a homogeneous and highly disciplined stoic people; US is multiracial but full of rising hate especially political and likely headed for massive civil unrest if not civil war; - Japan has a very low violent crime rate and no guns; US is a violent society with proportionately the most prison inmates in the world; - Japan has a philosophy of filial piety; US seniors mostly suffer poor and alone; - Over 80% of real US gov't debt is hidden out of sight off balance sheet; Japanese accounts are forbidden from same so their numbers are more honest; - US debt is largely foreign owned; Japanese debt is domestically held; - Japan has a relatively small population and land area; US is a relatively large, populous country (albeit dwarfed by China and India); - Japan is trade dependent; US can function as a closed economy.
    • DS
      David S.
      11 March 2019 @ 09:28
      US government pension funds like SS and military retirement own much more of the national debt than China. DLS https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124
  • PU
    Peter U.
    8 March 2019 @ 10:01
    From the waist up, Grant is in sync with the dress code. Below the waist, not so much.
    • RL
      Rui L.
      9 March 2019 @ 19:51
      just wandering. no judgment. why is this important to you Peter ?
    • RL
      Rui L.
      9 March 2019 @ 19:52
      wondering
    • NC
      Nic C.
      10 March 2019 @ 19:30
      because there were previous references to dress code ( A RP interview) and I guess Peter is just taking the joke a bit further but understand where you're coming from
  • PU
    Peter U.
    8 March 2019 @ 09:59
    Jeff's socks are the correct color; Grant's not so much