Over a year ago, Jeff Gundlach said that if oil fell to $40 a barrel, there would be something wrong with the world.
On Tuesday, oil broke $30.
This new low for oil, conveniently for those who want to hear what Gundlach has to say next, comes just a few hours before his latest webcast on the markets and the economy, which is set for 4:15 p.m. ET this afternoon.
As a quick refresher, back in December 2014 Gundlach said on a similar webcast: “I hope [oil] does not go to $40, because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be — to put it bluntly — terrifying.”
It’s not terribly controversial to say that the world — particularly the Middle East — is more destabilized now than it was about 13 months ago.
In December 2015, Gundlach was asked again about his comments — which were then a year old — and said simply, “Oil’s below $40 and we’ve got problems.”
Perhaps the biggest impact from the oil crash is yet to come as Saudi Aramco, the state-owned Saudi oil company that is almost surely the world’s largest, is exploring the possibility for an IPO, which could indicate potential trouble with the kingdom’s finances at the very least.
Interestingly, Gundlach told Reuters on Tuesday that oil look set to make a “short-term bottom.”
A few hours after these comments, oil broke to a new low.
Fortunately, there is more to come.