Jeff Gundlach Explains How The World Can Get Blindsided By A Financial Crisis

Jeff Gundlach of DoubleLine Funds just wrapped up his latest presentation.

At one point, he reflected on the subprime mortgage crisis, which was a great example of how the market believed that a crisis was avoided, only to get crushed later.

Gundlach provided these two charts capturing the price (inverted) of subprime mortgages as measured by the ABX index.

As you can see in the first chart, prices collapsed very early in 2007.  But they recovered quickly.

Crisis averted?

“Dream on,” said Gundlach referencing the classic Aerosmith song.

The second chart captures the latter part of 2007 when the subprime market collapsed and snowballed into what became the most devastating financial crisis since the Great Depression.

jeff gundlach presentation

Photo: DoubleLine Funds

jeff gundlach presentation

Photo: DoubleLine Funds

SEE ALSO: Here’s Jeff Gundlach’s New Epic Presentation On ‘Financial Expressionism’ And The State of The Economy >

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