저자: JeffreyGundlach · 외국인
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사모신용 시장 내 자산가치 평가(마크) 불투명성과 유동성 미스매치가 위험 요인이며, 하이일드·회사채 스프레드 확대가 스트레스 신호라고 진단. 재정적자 확대와 장기금리 상승 압력, 연준 인하에도 장기채 강세가 나타나지 않는 점을 지적. AI 관련 자산은 모멘텀 과열 우려가 있어 현금 20%·주식 40%(주로 해외·신흥국 현지통화)·채권 25% 등 방어적 배분을 권고. 금은 1년간 50% 이상 상승한 반면 비트코인은 제로 수익으로 '허상과 실체' 구분이 시작됐다고 평가.
다듬은 글
Well, my next guest is known as one of the straightest shooters on Wall Street with the track record of looking around corners and making really big calls before they happen. And right now, well, he's not liking what he's seeing. In fact, this week he shook the market up when he remarked that almost all financial assets are now overvalued.
So, let's bring in Double Line Capital founder, CEO, and CIO Jeffrey Gunlock. Jeffrey, great seeing you. Um, you've been pretty adamant. I want to start with private credit because you've been so adamant about this. You know, last week you pointed out there's never just one cockroach, but even before then you posted about paying kind or pick and you know that's sort of represented in that blue aisle stock which is crumbling.
Explain to the audience what exactly is going on here. Well, we had a little bit of volatility earlier this year with the tariff tantrum and then everything came back to calming down and throughout the summer into the fall. We kept at the tightest credit spreads we've had in a long long time in the bond market and there was a lot of easy financing and there was kind of a a one rate sort of a offerings from some of the some of the capex in in the data center stuff and all this.
But in recent weeks, and maybe it's has something to do with the government shutdown and the data not being around. So now people have to look at more anecdotal data like layoffs of 30,000 at company A and 15,000 at company B and the ADP data which is not terribly reliable but has been weakening. The household survey is usually more accurate than the establishment survey at turning points and that's definitely been weaker.
So all these things have started to lead to observable changes where the market seems to be bifurcating. So you have uh triple B triple C high yield spreads have widened out not insignificantly. High yield spreads broadly have widened out. Uh corporate even investment grade corporate spreads are starting to widen out a little bit.
And then the private credit thing is starting to be less of a theoretical shake out where some will be survivors and some may experience troubles and now starting to see sort of the canaries in the coal mine kind of falling falling to the to the bottom of the cage. And we saw one deal where uh it was called Renovo where a firm reputable firm frankly had the bonds marked at 100 cents on the dollar and then a month later they revised the mark to zero.
That's a pretty big change. 100 is zero. And in their in Chapter 7 bankruptcy filing, they they they stated their uh liabilities at about $150 million. And they showed their assets to be less than $50,000. Now, I know private credit is less transparent and uh unregulated largely and all this, but you think that they would all be monitoring their credit positions.
It just seems weird to me that you wake up one day and you realize that the debt to debt to assets, debt to equity ratio is 150 million to less than $50,000. And that's that's really a interesting thing. And then a week later out comes an article that some major private equity private credit firms owned the same position and the marks had a pretty wide variation on them.
The high was at 91 and the low was at 77. Now 91 to 77 isn't 100 to zero. But that's a pretty big variance. And then [snorts] anecdotally, I met with one of our large insurance company clients who has very many uh positions in private credit and they have eight managers that own exactly the same position.
And the highest mark when they during a marking period earlier this year, this wasn't terribly recently, but was here in 2025. The highest mark was at 95 among these eight managers and the lowest mark was at 8. So this is starting to show up to be the problem that I've been referencing is that private credit and private equity frankly is being borrowed from private equity.
It's sold on a volatility argument primarily. Maybe there's some excess return for ill liquidity that you can get, but it's largely a volatility argument. But if the marks are estimates as opposed to true marks, the volatility could end up being realized volatility in the future could be much more in the observable volatility in the past.
And then you have the the news today that a firm has a publicly traded private credit fund and a and a non-publicly traded private credit fund. and they wanted to merge the two becau uh because the assets the the stock price of the publicly traded one was meaningfully below the stated asset value. Well, I think market participants are pretty smart.
I I don't think that they're going to be, you know, selling uh below the value of the below the value of the assets. And so I I'm suspicious if the assets are really uh higher value than the stock. And the other twisted was they had this uh private fund and they wanted to merge the two and when they announced the merger they said that the private investors would not be allowed to redeem until the merger had taken place which this is kind of the thing about unregulated markets just like the co market was previously to the global financial crisis.
It's like the wild west. And it starts out with a sheriff in town and things are going pretty well. But then as as the frontier town grows, you know, more people come in trying to exploit opportunity and you get to have maybe it started out with the good sheriff and good actors. But it starts to become highly appealing when you have massive asset inflows at high fees, by the way.
And it it's enticing for people who want to maybe color outside the lines a little bit and you start to get the potential for problems. And that's what I've been talking about now for a while. But in more recent weeks with spreads widening out in particular perhaps being a catalyst and bifurcation in the yields and CDS of you know data centers or people like that that are that are sponsored by major entities and ones that are sponsored by entities that are le less uh convincingly robust.
You're starting to see spreads going from very tight to one one to the other to something like 200 300 basis points and it's happened fairly quickly. So I I think that this is showing signs of stress and you're in a market where pricing is uh estimated and not and not known. So it hasn't really been tested yet and like you know most credit markets when they start out they they get tested and it turns out that some of the ideas that were used to uh you know to to do new new strategies and promote growth end up not being terribly sound.
And so that happens that there that leads people to be fearful, right? And when people are fearful, they don't like being in illlquid assets. And in the global financial crisis, people couldn't fund their private uh lockup fund commitments when they started to draw them down. So you you you you say you're going to invest in a fund and the the sponsor uh rightly and responsibly says, "We're waiting for it to get cheap.
We're waiting for it to get cheap, and when it does, we're going to draw your capital. But when it gets cheap, nobody has any capital because they're already locked up and everybody thinks it's cheap now cuz it probably is. And you start getting capital calls and these entities can't fund them. And so we have I think a mismatch here in terms of pe of large asset pools needs particularly during times of some stress
and their liquidity and so I this this I think could be a problem. Go ahead Charles. No, no. I mean, you know, as you were describing this and you eventually mentioned collateralized debt obligations and you know, a lot of there were a lot of terms that we learned the hard way during the housing crisis and you know, of course, there was a contagion.
There was marked to make believe. Anyone was making up their marks and to your point this becomes a ground swell of anxiety and certainly blue crew blue which is an company you were referring to uh we had that chart up stock is just completely falling apart. So, I want to pick up on this, but also uh I'm going to when we come back, I want to shift to the debt conversation because it's been a concern of Wall Street for a long time, but I want to point out to the audience, January 1st, 1835, President Andrew Jackson paid off the national debt, but that was the last time the US was at zero.
Jeff Gunlock, you've been worried about this for a long time. When we come back, let's talk about that, the potential AI bubble, and where there might be some opportunities. We'll be right back. Welcome back, folks. I'm here with the the bond king himself, Jeffrey Gumlock. And Jeffrey, I teased the debt.
It's something you've been concerned about. We're racing toward 40 trillion. Believe it or not, at one time we were zero. Here's my problem. Here's my concern. I don't think we'll ever stop. I don't think either party will ever have the willpower to to slow it, maybe to stop it. Maybe slow it down periodically.
So, the question is, what's the ultimate outcome? Well, it does seem like we're not going to stop it. I mean, we've got the tariffs put on and they are bringing some money. I mean, it's not the 500 billion or trillion that the president says it is, but it is ramping up and we are approaching about a run rate of 400 billion, but then the president turns around and he says, "I'm going to give $2,000 tariff rebate to uh families." And I'm sure it'll be limited to certain income level.
I've heard 100,000 being bandied around, but I mean depending upon what that level is, that $2,000 to these households would be somewhere between 400 and $600 billion. So, we finally got some revenue coming in to help bring the rate of the deficit to GDP a little bit better, but here we are talking about giving it away.
So, it does seem like it's never going to stop. Meanwhile, the bond market has started to act in an unusual way in the Treasury bond market, which suggests that we're getting closer to the hand maybe ultimately being forced here for the Treasury Department and the Treasury officials. And that is that the Fed started cutting interest rates, you know, a year ago, September, and they cut rates 150 basis points.
And typically when the Fed starts cutting interest rates, particularly when they cut it as much as 150 basis points, you get a rally in the bond market. You get a rally all across the yield curve. This time cumulatively now with 150 basis points, the 2-year Treasury yield is barely down from where it was the the day before the first Fed rate cut.
And the 30-year Treasury bond has a very negative return since that time period. This has never happened before. Another thing that's interesting is that the um is that the S&P 500 corrections going back to 2000, there have been 13 of them. And when the corrections came, you know, the correction means a drop of at least 10%.
The first 12 times of those 13 historic examples, the recent 13, the first the first 12, the dollar went up every single time. The dollar rallied uh when the stock market fell, which meant that the dollar was a flight to quality asset earlier this year in response to the tariff tantrum. The dollar fell as the S&P 500 went in correction mode and it fell by around 8 to 10%.
Something funny is going on here that the uh Fed cutting interest rates is not really helping the dollar certainly obviously it wouldn't on a relative basis and it's not getting long bonds to rally. So my thesis has been for a long time that long rates are going to rise even if the Fed cuts interest rates particularly if the Fed is cutting interest rates in response to heightened recession risk because if there's a recession we know there's going to be a deluge of Treasury borrowing it has to be because tax receipts go down and unemployment stuff goes up and so pay out pay things up when that happens.
You know the problem with that is the long bond going up as issuance goes up, the yield going up is going to take us to a very uh nervous place where we already have interest expense having gone from 300 billion a few years ago to now up about 1.5 trillion and going higher because all the bonds that are rolling off in the next 3 years based on today's interest rate structure will have higher coupons than the ones that are maturing.
So we have an interest expense problem and an issuance problem. So here's my thesis, Charles. I think rates are going to go higher on the long end until such time as it's too painful. And I think that that might be somewhere approaching 6%. It might be too painful when they say we have to do something about this.
And one thing could be buying back the bonds, yield curve control. They did that in aftermath of World War II. Or else something really radical could happen like you to change the coupons on all the bonds. Can't change coupons on existing Treasury bonds, you say? Well, that's what they said about mortgages, part of the global financial predict.
And they modified the interest rates on all the mortgages. If that were to happen, it would solve the interest uh expense problem for, you know, you could drop it by about 2/3, but then of course you wouldn't be able to borrow anymore. No one could ever lend you money. Yeah, I get Well, that's that's the goal.
That's the goal. We want to get to a place where we're not borrowing any money. Okay, less than four minutes though. I got to get your thoughts on this market, the AI bubble. Are you concerned that there's an AI bubble? Well, it's obviously a huge momentum investment. There's so much passive investment now.
The the the passive assets and passive funds crossed over the assets and active funds. And that just means that money pours in and they have to and they're buying the market cap weighted indices like the S&P 500. And so it's a self re it's a virtuous circle and and it keeps going and keeps going until such time as cracks start to appear.
I'm not saying cracks are definitively here yet, but there things are starting to happen like I mentioned about the bifurcating of yields and CDS in in the AI related categories. So at some point it's going to reverse and the v virtuous circle will turn into a vicious cycle based on pees today and the the huge amount of of non-transparency that's going on in private credit and other things.
I'm very cautious. I I have uh I I recommend 20% cash in portfolios. I recommend 40% stocks, mostly foreign stocks like EM in local currency, which has been doing great uh this year and and then maybe 25% in bonds where you're you're taking 10 years in in immaturities and commercial mortgage back securities are doing very well.
There's renewed there's renew there's reduction of fear in the commercial real estate market and also uh the risk-free thing are uh non-g guaranteed mortgages residential mortgages that were issued five or more years ago because no one is going to default on those mortgages. They have way too much home price appreciation.
You'd be stupid as a rock to default on a price on a home when you can sell it for a profit. So there's no there's no credit risk in those residential loans. commercial the commercial market is definitely getting some animal spirits showing up. Maybe it's just in general animal spirits been picking up but I that's how I see things and 20% cash and still I like 10% or 15% in real assets.
Some people can buy gold. I do observe that over the past 12 months gold has gone up over 50% and Bitcoin has done zero. So it looks like the market is getting a little bit more sober about what's real and what's hype. and uh at the valuations of the hype assets. I don't want I don't want to play uh just in case the momentum flips the other way, which it probably will within the next year.
Less than a minute to go. The Fed, should they be focused more on jobs right now or inflation? I think they're in they are more focused on jobs. The unemployment rate's been going up. Uh it's it's it's now almost 50 basis points above its uh three three-year moving average. It's likely to move higher based upon the anecdotal data we've had since the government shutdown and the inflation rate uh has the inflation swap market has has actually come in.
I think the tariff effect on the CPI people are starting to think that it's dissipating and I think people don't expect inflation to rise as much based upon the inflation spot market. So the Fed is going to be more focused on jobs. I believe I I believe so too. I just there's an enormous amount of economists who don't.
Jeffrey, I really appreciate you spending all this time with us. We covered a lot. Thank you so much for your wisdom and hopefully we'll see you again real soon. Thank you. Thanks for having me, Charles. Good luck, everybody. Thanks.
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