The real bond god Jeff Gundlach is on CNBC.
We’re covering live.
Straight up, he’s explaining why Bill Gross is wrong about bonds selling off when QE2 ends.
The reason is that QE is inflationary, and that’s bad for bonds, and the end of QE2 will be deflationary, and that will be good for bonds.
And history backs him up.
You can see why in this chart.
He sees June 30 as a crucial day for the entire market, similar to Rory McIroy going around amen corner.
It won’t take much for the economy to decline again thanks to how much debt there is.
On ratings agencie, Gundlach is glad that he’s in an industry where he doesn’t have to pay attention to the rating agencies, but says there are great opportunities to arbitrage the ratings agencies by investing in securities that are too-low rated.