Jeffrey Gundlach: “Trump Is A Lot More Like Ronald Reagan Than People Think”

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In an interview to appear on FOX Business Network’s (FBN) Wall Street Week this Friday at 8PM/ET, hosts Anthony Scaramucci and Gary Kaminsky speak with Doubleline Capital CEO Jeffrey Gundlach about the 2016 presidential election. When talking about Donald Trump Gundlach says, “I actually have been predicting a Trump presidency for months.” Gundlach went on to say, “Trump actually is a lot more like Ronald Reagan than people think.  People say that he’s not really a conservative, but “Make America Great Again” is a very conservative concept.”

Jeffrey Gundlach on whether there would be a global growth scare if Donald Trump becomes President:

“Well, I actually have been predicting a Trump presidency for months.  I was on the Barron’s round table back in early January and they asked a question, who’s going to be the next president?  And everyone said, Hillary Clinton.  I said, Donald Trump, and people gasped when you say that back then….One of the problems people have about investing is they’re not objective.  They predict what they want to happen rather than what’s going to happen, and I thought it was — I’ve been quite convinced that Trump’s going to win for a long time.  There’s positives and negatives to a Trump presidency.  There might be a short-term positive involved because Trump actually is a lot more like Ronald Reagan than people think.  People say that he’s not really a conservative, but “Make America Great Again” is a very conservative concept, in fact it’s reactionary.”

Jeffrey Gundlach on Trump talking about a rollback of regulation:

“Do you know what Ronald Reagan’s slogan was in 1980?  People are shocked when I tell them this.  They almost don’t believe me.  It was, “Let’s Make America Great Again”…He’s very comfortable with debt.  Let’s face it, he’s built a lot of empires based upon debt and restructuring.”

Jeffrey Gundlach on whether he would like to be Secretary of the Treasure in a Trump administration:

“Oh, I don’t really know.  I’m very apolitical, actually.  I don’t really support candidates or have ideas.  People always ask me, what should policy makers do, what should people do?  And I say, that’s not my job.  I’m not a policy maker, I’m not a central banker, I deal with reality, so when I say, Donald Trump’s going to win, it’s not that I’m wildly rooting for him, although I don’t dislike Donald Trump.  It’s just like, I think it’s going to happen.”

Jeffrey Gundlach on whether if Trump wins the presidency he will assemble the right people:

“I think so.  Look, Trump’s a clearly talented guy.  When Ronald Reagan was running in 1980, a lot of people thought that he was a joke, he was a stupid person, he was a B actor, how can we possibly elect this guy?  I don’t think anyone thinks Trump is dumb.”

Jeffrey Gundlach on whether he sees him winning the election in November:

“Sure.  I mean, the rap was that Trump has a ceiling of 20 percent with Republicans.  Then it was a ceiling of 25, then 30, then 35, and then he’s winning the 50’s and 60’s.”

Jeffrey Gundlach on what has happened since the markets bottomed in February:

“Well, the markets rallied substantially starting February 11, lots of incredible bearishness.  I remember that the probability built into the market, in the bond market, that interest rates would raise anytime during 2016, went to zero on that day and people were asking Janet Yellen about, should we go to negative interest rates, the United States, and it was just, the sentiment was just black as night, and when that happens, usually, the market’s pretty sold out, and what we saw is, what we’ve been seeing, is incredible volatility in the stock market.  Huge decline in August and September that brought on very pessimistic attitude and then a huge rally into December, and then the Fed raised interest rates and I thought that they would in December but I thought it would be a bad idea, and sure enough, we got off to the worst start in basically the history of the stock market into February 11.”

Jeffrey Gundlach on whether he was bullish and buying stocks in February:

“That’s right…When things look that bleak, usually the market’s sold out.  I thought the talk of negative interest rates was shocking given that the Fed was on record saying at that point that they were going to raise interest rates four times over the course of 2016, which I thought was never going to happen, but it’s kind of a strange world when you’re talking about four increases and yet you’re getting questioned as the Fed chairwoman about, should we go to negative interest rates.”

Jeffrey Gundlach on whether he thinks there’s a recession on the horizon over the next twelve months:

“I don’t think that the indicators that we like to focus on are signaling a recession, but we’re watching them carefully.  There’s basically two or three indicators that investors should look at that are almost failsafe in indicating recessions coming.  One is the leading economic indicators, which year over year, going below zero, tends to be highly coincident with recession.  Right now it’s not strong but it’s not close to zero, so that’s encouraging regarding no recession.  But one thing that we’ve really started focusing on is the unemployment rate.  If you take the unemployment rate that’s reported every month and you compare it to its 12-month moving average, you never get a recession, ever, without the unemployment rate being above its 12-month moving average.  The good news is, it’s below its 12-month moving average. Now there’s false signals in that indicator.  It does sometimes cross above its 12-month moving average and falsely signals recession but you never get a recession without it crossing over.  So the good news is it’s below its 12-month moving average.  The bad news is, it’s probably going to cross over around August or September of this year because the unemployment rate has stopped falling.”

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