Danielle DiMartino Booth & Jeffrey Gundlach On The U.S. Economy

DoubleLine holds a high level financial discussion on where the economy is heading with CEO of Quill Intelligence, Danielle DiMartino Booth and CEO of DoubleLine, Jeffrey Gundlach at the Rockefeller Center’s Rainbow Room in New York.

Danielle DiMartino Booth & Jeffrey Gundlach: Where The Economy Is Heading

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Q1 hedge fund letters, conference, scoops etc

Transcript

Also CNI loans came out and they're now crashing. They're at the lowest level they've been since basically in the Great Recession of 10 years ago. And you feel rather like you're living in the twilight zone when you look at what's coming out of the White House and the administration. I mean last Friday was one of the most embarrassing interviews I think I've ever seen. When the vice president in an interview with Ayman Jeffers at CNBC said this economy is roaring and in the next breath it was and we should cut rates 100 basis points immediately and start QE because that makes sense. Yeah it's like The Twilight Zone. So the thing that I've been focusing on I mean Sherman said that the data don't really change much. I think the data got a little soft there in the fourth quarter supporting the stock market down and then it started to rebound. Feel like it's going to softer now. When the slides that I used at the Sony conference yesterday which I don't think people fully appreciated because it went by pretty fast is one of the indicators that we use is the Citibank 12 month the year over year data change index and it's a pretty good index to follow because it's basically says we'll take a very broad basket of indicators including hard data survey data and we'll compare the one that's just released to its twelve month moving average. So it comes out below the total moving average.

Obviously the trend is not good and that index is very highly correlated with changes in GDP on a year over year basis except it has the excellent feature that it tends to lead a little bit. And it has a history of when it diverges then typically GDP follows. So the year over year Citibank data change series is absolute has absolutely cratered since the beginning of 2018. It was incredibly high. Remember as we enter 2018 it was a it was a global synchronized global boom narrative. It was actually sort of true at that moment. Most of these things were flash and pretty bright green and then the global stock market peaked January 26 of 2018. And it's really never gotten globally anywhere close. Back to that again. The US hung on all the way until October 3rd but really you know I was given a hard time today by Scott Wapner and CNBC and I don't mind that I saw a friend of mine but he kept saying like how can you call this anything but a roaring bull market. And I go Well maybe because it hasn't gone anywhere in 15 months. The US market is is lower the Dow Jones never made it back above the October high than the what I care most about the New York Stock Exchange composite is the biggest one it peaks with the global stock market January 26. It didn't go to a new high in October and now it's put in recently another lower high. And now we have a little bit of a roller. One of things that I've been really focused on and I stopped talking about it for about six or seven years and I've announced I was going to stop talking about it was the national debt problem that got a lot of focus in 2011. You remember the downgrade of the United States by one of the rating agencies. What a joke that is what they're doing is opining on the purchasing power of your monetized returned money. I mean that's not their job.

Their job isn't to is to opine on purchasing power of maturing bonds because they're going to downgrade the US based upon a dollar if you should be downgrade every single dollar based investment and every single dollar based bought. So. You know we have this situation where the debt has really gone off the radar screen. I knew it would because the compounding curve took a little break there and I said it would did in 2012 and 2013 I said good news for you while we're on the highway to hell. We are at a rest stop right now.

And the situation will not really get worse until maybe 2019 Well here we are. And it actually got worse already when I predicted in before the primaries started in 2016 that Donald Trump was going to win or was just an asterisk. What I also said is Donald Trump loves debt and he's never paid back debt.

I think ever and he's gone bankrupt like so many times and he loves debt so you can bet dollars to doughnuts so you're going to see an expansion of the deficit very similar in trajectory to what Ronald Reagan did because Ronald Reagan's slogan Believe it or not was Let's Make America Great Again. Look it up now. Trump dropped the less we're in more of an.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver