I’ve never been more grateful for the life I’ve had. 40 years of hunting and fishing trips, private aviation, wife is a Chef. All discussions of money should start with counting your blessings. Being in a position to even be watching this means you’re doing well.
Very good, glad you let Jeff G talk as much as he wanted, he really is an extreme expert in Bonds, very informative! Thank you Mr. Rosenberg! Best to you both!
Yes! Big thanks guys! There are so many financial voices which are hyperbole, distorting and even downright lying. I see you both as honest and wise. A godsend to us little guys.
Kind of hard to visualize what things are like after these debt resets happen. I don’t know if Geoff and David are sounding sort of sanguine because they’ve already made a huge amount of money and they can live off the cash and there will be opportunities, but I wonder what they think, our country looks like in a few years when all of our money is going to debt service and it’s entirely possible that some of our richest citizens will decide to move out of the country rather than start paying 80% income taxes. The government already has an exit tax of about 30%, so I just wonder how that scenario is going to play out.
@@kbkesq The debt situation much less scary than it sounds because for every person paying debt there is someone making revenue. Most US debt is owned by US citizens and corporations, so it's just money shifting around. Foreigners own about $7.5 trillion in US debt, but the US owns about $6.5 trillion in foreign debt. That difference isn't trivial, but it's only about $3,000 per US citizen. The US tax to GDP ratio hovers around 16-19%, while the OECD average is 34%. This represents about $4 trillion annually in untapped revenue if we matched the OECD average ($8 trillion if we matched the leader). Obviously growth would be impacted by higher taxes so we'd never realize this much extra income, but it does illustrate just how low taxes are in the US. All of the problems of high federal debt will eventually need to be solved with higher taxes, targeting mostly the upper middle class and wealthy. Increasing the exit tax will probably also be necessary to stop the wealthy from fleeing before paying their share. Debt isn't the biggest problem though. Slowing productivity improvements and an aging population are. These will need to be fixed by a combination of increased immigration and a lower standard of living. Unless something like improved robotics and AI come in to save the day (by raising productivity), these problems are most likely inevitable.
But David keeps him sharper, I think; cross-pollinating ideas, e.g., when the stimulus checks and high unemployment payments were creating more demand, and inflation was on everyone's mind in 2021, David was saying, "Well, they are stopping now, so expect a fiscal drag ahead." Next time Jeff spoke, I heard 'fiscal drag'; I think he mentioned David too.
Once in a while I come across content that deserves multiple listens to really absorb the nuances of the discussions. Very happy to chance upon this today.
Thanks for the video. Please keep them coming. For my reference,.. Around 50:00 David mentions he's in long dated zeros. 51:30 Jeff mentions he likes things in the 3 to 5 year,... yielding 6 to 7%,... assuming corporates. 59:00 HELOCs
3 parts I found interesting: @ 27:37 talks about how legalities are meaningless for wiping out debt now in the USA and you can't count on a supposed return from government bonds. @ 1:03:00 talks about India, Mexico and US markets. @ 1:06:00 talks about China and AI. Thanks much for the POV.
Great conversation. Two really interesting points came up. One of them was that Jeff felt there was more risk and holding a bond with the 4% or 5% yield even a treasury because the government was going to cram down the investors to 0% or one percent when the debt becomes unsustainably large. Everybody knows that as these mirror term expirations come do we are going to see our countries monetary obligations sucked up by debt service. Another interesting point was the universities are running out of cash to run their operations because they are a liquid and that started with Harvard, but there are many other universities like this. It would’ve been interesting to hear Geoff talk about the states because States like California got mailed out a lot more than individuals did if you really think about it. California had $100 billion surplus because of government bailouts. And more recently California made a deal with the Biden administration to delay taxes until after the last election in November, knowing that would be stimulation of the California economy through the summer and now that California is coming due and taxes have been paid. they are seeing serious shortfall, which will only grow. Democrats states and cities are going to see Big shortfalls because who is going to want to buy their bonds?
Thank you David. I hope to ask if you can help us understand what will happen after June 9 2024 when the 50-years PetroDollar Agreement expires between Saudi Arabia and the US? Will you host an in-depth interview to help us understand together ? Thank you David.
What do you mean? I got a check for $20 bucks and treated my lady to burger king drive thru lol...but yes, your point is well taken. For us it just caused inflation. I think they are talking about the cumulative excess savings from the direct checks, child stimmy, enhanced unemployment, etc. That actually amounted to 2.1T. If you are interested the Federal Reserve Bank of San Francisco actually did a recent research paper entitled, "Pandemic-Era Excess Savings". The short version is the 2.1T has all been spent down since March.
Well, if you lived in a state like California that got bailed out to the tune of about $100 billion then you didn’t have your taxes go up by double and of course the real stimulus wasn’t just checks. It was bailing out everybody’s banks and the value of their homes, if you only rented and did not provide services that went up in price then perhaps you did not benefit, but everybody got a Bennett on paper by not having their bank go out of business or their house crash and value. We’re going to have to pay the piper on this.
Covid stimulus checks went out to dual income families making up to about $200k combined. The adjusted gross income limit was $174k, and that doesn't include salary that went to 401k or health insurance premiums. If you make over $200k, you aren't middle class. You are upper middle class and should have e weathered Covid just fine. I'm in that group and didn't need the stimulus checks at all.
At or about 1:04 Jeff Gundlach notes that the fact the inverted yield curve has lasted so long is a problem for funds, corporations and the like 'if you're leveraged' -- he then explains how if somebody bought JNK and leveraged it the financing costs of the leverage increased, but not sure how that isn't just a function of rates being higher rather than the fact the yield curve is inverted?
Rosenberg 5 years ago: "We'll have a recession next year" (no recession). 4 years ago: "recession has already started" (no recession) 2 years ago: "the risk is recession" (no recession) 1 year ago: "recession is slamming demand" (no recession) 9 months ago: "recession coming in 6 months" (no recession). Trend here ? Nice of Gundlach trying to prop up this guy but there's no pulse Jeff
Rumor has it every time Bill Gross hears someone call Jeff "The Bond King" he has to go to a safe space, do some yoga, and meditate for ten minutes. Doctor's orders. ;)
Inflation surprisingly has been a ghost subject these past few years. The Covid crisis certainly bent expectations outside the norm. Interest rates are dependable when all sectors are in concert. Jeff is real star at this narrative. He is easy and steadfast with his viewpoint. What if Treasury would sell a wide range of maturities? And then begin buying impaired debt from private equity? I am calling this the great silencing. It is opposite of what happened in the crash of 08-09.
Thanks David, always appreciate your discussions. If I may, I feel the need to point out that Jeff’s comments on MMT at the 16min mark are misguided, as they often are by many. MMT does not advocate for any particular policy, it is merely an accurate description of a fiat monetary system. Sure, there have been many people that have advocated for troubling policies in the name of MMT, but blaming MMT for that is akin to blaming gravity for a plane crash. If MMT weren’t accurate, it wouldn’t be possible for us to witness the ministry of finance in Japan having to choose between defending its currency or supporting its bond market. The benefit of MMT is that it provides a better framework for fiscal and monetary policy debates.
@David Rosenberg: the spreads are priced for 'almost no defaults' because the Fed crossed the Rubicon during covid and bought corporate credit for the first time, backstopping the market. This is why investors are being more complacent this time round (they think they can take more risks as if spreads blow out to any significant degree, the Fed will step back in) and also why credit spreads are useless as the recession indicator they used to be.
What happens if the huge costs to the two wars get worsen and the USA government becomes more involved in sending even more money. Will this trigger an even higher debt level that needs even more interest to pay debt ?
I’ve never been more grateful for the life I’ve had. 40 years of hunting and fishing trips, private aviation, wife is a Chef. All discussions of money should start with counting your blessings.
Being in a position to even be watching this means you’re doing well.
True, being alive is great!
Thank you, David, for bringing Jeff.
Very good, glad you let Jeff G talk as much as he wanted, he really is an extreme expert in Bonds, very informative! Thank you Mr. Rosenberg! Best to you both!
Thank you, David & Jeff! Great insight and am grateful to listen to you both.
Two who have been wrong for too long.
Two Titans for the price of one!
Thanks Guys 👍🏻💛
1 titan. nobody know or cares who rozenberger is
Thank you gentlemen for pulling this together. Lucid discussion.
Yes! Big thanks guys! There are so many financial voices which are hyperbole, distorting and even downright lying. I see you both as honest and wise. A godsend to us little guys.
Kind of hard to visualize what things are like after these debt resets happen. I don’t know if Geoff and David are sounding sort of sanguine because they’ve already made a huge amount of money and they can live off the cash and there will be opportunities, but I wonder what they think, our country looks like in a few years when all of our money is going to debt service and it’s entirely possible that some of our richest citizens will decide to move out of the country rather than start paying 80% income taxes. The government already has an exit tax of about 30%, so I just wonder how that scenario is going to play out.
@@kbkesq The debt situation much less scary than it sounds because for every person paying debt there is someone making revenue. Most US debt is owned by US citizens and corporations, so it's just money shifting around. Foreigners own about $7.5 trillion in US debt, but the US owns about $6.5 trillion in foreign debt. That difference isn't trivial, but it's only about $3,000 per US citizen. The US tax to GDP ratio hovers around 16-19%, while the OECD average is 34%. This represents about $4 trillion annually in untapped revenue if we matched the OECD average ($8 trillion if we matched the leader). Obviously growth would be impacted by higher taxes so we'd never realize this much extra income, but it does illustrate just how low taxes are in the US.
All of the problems of high federal debt will eventually need to be solved with higher taxes, targeting mostly the upper middle class and wealthy. Increasing the exit tax will probably also be necessary to stop the wealthy from fleeing before paying their share.
Debt isn't the biggest problem though. Slowing productivity improvements and an aging population are. These will need to be fixed by a combination of increased immigration and a lower standard of living. Unless something like improved robotics and AI come in to save the day (by raising productivity), these problems are most likely inevitable.
@@kyleolson9636 Nope Scofflaw: we will not be paying your tab. We will however, are willing and able to carve it out of YOU!
Gundlach is excellent.
But David keeps him sharper, I think; cross-pollinating ideas, e.g., when the stimulus checks and high unemployment payments were creating more demand, and inflation was on everyone's mind in 2021, David was saying, "Well, they are stopping now, so expect a fiscal drag ahead." Next time Jeff spoke, I heard 'fiscal drag'; I think he mentioned David too.
Once in a while I come across content that deserves multiple listens to really absorb the nuances of the discussions.
Very happy to chance upon this today.
Two real pros, priceless content!
1:10:34 piece on the airlines had me cracking up! 😆
Super interesting discussion, thanks so much!
Thank you for recording & sharing this discussion
Awesome Interview, thanks David🤗
Two true OGs of credit investing. Thanks for posting this interview, David!
Thanks for the video. Please keep them coming.
For my reference,..
Around 50:00 David mentions he's in long dated zeros.
51:30 Jeff mentions he likes things in the 3 to 5 year,... yielding 6 to 7%,... assuming corporates.
59:00 HELOCs
I might not agree with everything, but I genuinely want to say thank you for sharing this interview with the public. 😊
Wonderful discussion on the bond market. Thanks for putting it together.
Love this!
happy to see you here! i love your show Julia
Thank you for doing this interview and sharing it for free.
3 parts I found interesting: @ 27:37 talks about how legalities are meaningless for wiping out debt now in the USA and you can't count on a supposed return from government bonds.
@ 1:03:00 talks about India, Mexico and US markets.
@ 1:06:00 talks about China and AI.
Thanks much for the POV.
Gundlach is really the man spreading king.
imagine him on a bus
😂
hahahaahahaahahahahahahaha
Thank you for having people and not a static slide. !!! And David, you can definitely bring the great thinkers in so keep it up!
Two (2) excellent economic speakers who always share great insights - thank you.
David's record much worse then Jeff's especially since Corona.
Now how do we get our bright young minds to absorb this, internalize it, live it and breathe it!
Fantastic job!
Great guest and information...thanks David.
Great discussion by two realists. Great watching your insights on tv and on UA-cam. Thanks Jeff and David!
Ppp]p
😅
⁸
Thanks, always appreciate the experience, common sense, and foresight, Mr. Gundlach brings.
I got a wonderful class. David & Jeff. Thank you very much!
Great conversation, thank you!
2 mins in and I'm giddy. This is gonna be a real treat!
Awesome show watched halfway needed to watch again tomorrow to finish
Professional economic guest in Jeff
Two of my top voices together. Great.
Fantastic interview 👏🏿
Great interview! Thanks.
great talk! please make it a regular thing!!!! Love Gundlach..he is the real deal.
Thank you for having Jeff on. I really enjoyed the perspective and thoughts. David, please stop looking at the camera.
Thank you for sharing your wisdom.
This was excellent.
Everyone in America should watch this video. 9
Two great people!
Glad you two met and collaborate like this!
"The King and I" line was a good one, Rosy.
You two are the 'no-Fed-spin' zone.
“Nothin but debt!” Should have gotten a bit of a laugh 😅 that was a good one! David just kept moving 🤦🏼♂️
Excellent interview, appreciate the discussion of illiquidity around private credit.
Yes, scary stuff…
Excellent interview
Very interesting conversation. Thank you brothers.
Great conversation. Two really interesting points came up. One of them was that Jeff felt there was more risk and holding a bond with the 4% or 5% yield even a treasury because the government was going to cram down the investors to 0% or one percent when the debt becomes unsustainably large. Everybody knows that as these mirror term expirations come do we are going to see our countries monetary obligations sucked up by debt service. Another interesting point was the universities are running out of cash to run their operations because they are a liquid and that started with Harvard, but there are many other universities like this. It would’ve been interesting to hear Geoff talk about the states because States like California got mailed out a lot more than individuals did if you really think about it. California had $100 billion surplus because of government bailouts. And more recently California made a deal with the Biden administration to delay taxes until after the last election in November, knowing that would be stimulation of the California economy through the summer and now that California is coming due and taxes have been paid. they are seeing serious shortfall, which will only grow. Democrats states and cities are going to see Big shortfalls because who is going to want to buy their bonds?
Thank you David. I hope to ask if you can help us understand what will happen after June 9 2024 when the 50-years PetroDollar Agreement expires between Saudi Arabia and the US? Will you host an in-depth interview to help us understand together ? Thank you David.
Saudi Arabia will accept Yuan , meaning lower US$ overall
The best of the Jeffs
Fantastic show , thank you 😊
man, what a guest, David has some clout!!!
Fantastic interview. Jeff is a wealth of knowledge. Some gems in this.
Jeffrey Gundlach, much respect.
For what ?
What a wonderful and educational discussion!
1:11:58 yes, the most discerning audience in the money game.
Wow excellent conversation. Straight talk. 👍👍👍
"No fatal mistakes!"
What stimulus checks. Never got one. Nada, zilch. If your household made a middle class income a 2 income household you got nothing.
What do you mean? I got a check for $20 bucks and treated my lady to burger king drive thru lol...but yes, your point is well taken. For us it just caused inflation. I think they are talking about the cumulative excess savings from the direct checks, child stimmy, enhanced unemployment, etc. That actually amounted to 2.1T. If you are interested the Federal Reserve Bank of San Francisco actually did a recent research paper entitled, "Pandemic-Era Excess Savings". The short version is the 2.1T has all been spent down since March.
They gave out $1000s to everyone making less than 90k which a few years ago was 80% of people
You kept your job
Well, if you lived in a state like California that got bailed out to the tune of about $100 billion then you didn’t have your taxes go up by double and of course the real stimulus wasn’t just checks. It was bailing out everybody’s banks and the value of their homes, if you only rented and did not provide services that went up in price then perhaps you did not benefit, but everybody got a Bennett on paper by not having their bank go out of business or their house crash and value. We’re going to have to pay the piper on this.
Covid stimulus checks went out to dual income families making up to about $200k combined. The adjusted gross income limit was $174k, and that doesn't include salary that went to 401k or health insurance premiums. If you make over $200k, you aren't middle class. You are upper middle class and should have e weathered Covid just fine. I'm in that group and didn't need the stimulus checks at all.
I always love the conversation between these two, they've growth so much together where they're talking about their friggin wallpaper.
This is a fantastic interview!
Quite the well written introduction, Mr. "Rosie"!
Awesome. Thank you.
What is the timeline for a Recession?
Thank you for your informative and educational discussion.
Dave should do video interviews far more often.
Interesting. Thank you.
Awesome Interview
Jeffrey on risk management, excellent👌
Good interview, excellent guest!
Super-good interview. You guys are both the best.
Got a lot, thank you, gentlemen :)
Jeff is either naive or simply won’t comment on the how the Fed communicates with its banks
At or about 1:04 Jeff Gundlach notes that the fact the inverted yield curve has lasted so long is a problem for funds, corporations and the like 'if you're leveraged' -- he then explains how if somebody bought JNK and leveraged it the financing costs of the leverage increased, but not sure how that isn't just a function of rates being higher rather than the fact the yield curve is inverted?
Thanks👍🏼
There's nothing better than serious analysis from the trenches. Thanks
Love the portrait wall and plant!
WHY NO TIMESTAMPS?
Gundlach is great
Rosenberg 5 years ago: "We'll have a recession next year" (no recession). 4 years ago: "recession has already started" (no recession) 2 years ago: "the risk is recession" (no recession) 1 year ago: "recession is slamming demand" (no recession) 9 months ago: "recession coming in 6 months" (no recession). Trend here ? Nice of Gundlach trying to prop up this guy but there's no pulse Jeff
Look at TLT 20 years price NOW , then draw your conclusion
What ruined the FED’s integrity(!) was insider-trading!
Excellent Mr Rose
Rumor has it every time Bill Gross hears someone call Jeff "The Bond King" he has to go to a safe space, do some yoga, and meditate for ten minutes. Doctor's orders. ;)
Inflation surprisingly has been a ghost subject these past few years. The Covid crisis certainly bent expectations outside the norm. Interest rates are dependable when all sectors are in concert. Jeff is real star at this narrative. He is easy and steadfast with his viewpoint. What if Treasury would sell a wide range of maturities? And then begin buying impaired debt from private equity? I am calling this the great silencing. It is opposite of what happened in the crash of 08-09.
Gundlach is an icon
Oooh good one. Jeffrey - great chat
Great interview
Love those shoes Jeff !! Quality right there 😂
If they are done raising rates & doing QT (almost), will gold perform well?
9:35 Thank you Jeffrey, spot on.
Thanks David, always appreciate your discussions. If I may, I feel the need to point out that Jeff’s comments on MMT at the 16min mark are misguided, as they often are by many. MMT does not advocate for any particular policy, it is merely an accurate description of a fiat monetary system. Sure, there have been many people that have advocated for troubling policies in the name of MMT, but blaming MMT for that is akin to blaming gravity for a plane crash. If MMT weren’t accurate, it wouldn’t be possible for us to witness the ministry of finance in Japan having to choose between defending its currency or supporting its bond market. The benefit of MMT is that it provides a better framework for fiscal and monetary policy debates.
Awesome interview.. any thoughts on Simplify TUA etf?
What does Rosie keep looking at?
Economic investigator Frank G Melbourne Australia is following this very informative content cheers Frank 😊
There was no supply shock! Just read Bridgewater’s October 2021 report! The problem was demand, thanks to the money supply!
@David Rosenberg: the spreads are priced for 'almost no defaults' because the Fed crossed the Rubicon during covid and bought corporate credit for the first time, backstopping the market. This is why investors are being more complacent this time round (they think they can take more risks as if spreads blow out to any significant degree, the Fed will step back in) and also why credit spreads are useless as the recession indicator they used to be.
Two wonderful investment veterans with honest opinions!!!
What happens if the huge costs to the two wars get worsen and the USA government becomes more involved in sending even more money. Will this trigger an even higher debt level that needs even more interest to pay debt ?
Nice new studio
Gundlach is THE King!!!
Good rundown.
Both good but both have been wrong. David told us to sell a thousand points ago
Good points about the refi in mortgages and the need to raise cash.