The Endangered Perma-Bear

Whatever you do, don’t call Jeff Gundlach pessimistic.

“It’s not pessimism, it’s reality. The numbers take you to the answer,” DoubleLine Funds’ famed fixed income manager stated emphatically in a recent interview.

Gundlach (left) was reacting to my suggestion that he might be a “perma-bear.” It’s funny how every perma-bear I’ve ever interviewed recoils at the label—as if they’ve been accused of being unpatriotic or a Justin Bieber fan. I’d just heard Gundlach deliver his second speech in two weeks that was undoubtedly pessimis … um, negative about debt and spending around the globe. He doubts lawmakers have the political will to do something about it, certainly not before the election. But so does the great majority of the country; nothing wrong with saying it.

His contemporaries at the latest conference agreed, so much so that it was a running theme throughout, with each defending himself vigorously against the scurrilous charge before launching into a full-throated explanation of the desperate hour in which we currently reside.

“We are living in a global realignment that our children and grandchildren will be talking about,” said PIMCO’s Mohamed El-Erian. “We can’t see it because we are so close to it, but make no mistake, it’s there.”

The “Japanese experience,” that country’s lost decade of stagnant GDP growth, “is the template for where we are headed,” economist Lacy Hunt added. “They, too, thought they could solve their debt crisis by taking on more debt. It didn’t work.”