The world has left the economic realm and is now heading into the political, which the Fed’s models cannot weigh because politics are too far complex and cannot be explained by six variables of a perfect free market system. There was a Financial Times article today, titled, “Bond Guru Jeffrey Gundlach: Brexit Not Going To Happen.” In a paradigm of static thought, Gundlach opine that Brexit will not pass in the U.K. for “the devil you know is better than the devil you don’t know. Look at what happened with Scotland. People aren’t going to pull a lever for Brexit, so I don’t even think that’s worth considering in the present time.”
Posts Tagged ‘Jeffrey Gundlach’
Notes From Underground: If Gross, Gundlach and Even Buffet Are Correct, Then THE FED IS WRONG
May 5, 2015The last seven weeks has brought out the bond bears in the forms of Bill Gross, Jeff Gundlach and also well-known stock picker and financial wizard, Warren Buffett. While Gundlach and Gross were very bearish on the European sovereign debt markets, the Omaha denizen opined on how stocks may be rich but bonds offer a terrible risk/reward return. Large bond investors are nervous that they have possibly bought an overvalued asset and may experience sizable losses on a quarter-to-quarter to basis. The problem for pensions, insurance companies and those saddled with a defined payout obligation, the FED and other central banks have broken the bond market as a value barometer so it is very difficult to match assets with potential liabilities.