“The Panic Is Palpable”: Gundlach Covers All His Stock Shorts, Is Flooded With “Art At Slashed Prices”

One day after Jeff Gundlach predicted that the odds of a US recession are about 90%, which is ironic because according to JPMorgan a depression in Q2 is now a lock, the DoubleLine founder appears to be getting a tad more bullish because in a late Wednesday tweet he said that “for the first time in years” he is not short any U.S. stocks after he covered his last three shorts today at exactly 2:37 p.m EDT. 

“The profits were just too great to not harvest, and the panic is palpable.”

For the first time in years I am now not short any U.S. stocks. I covered my last three shorts today at 2:37 p.m EDT. The profits were just too great to not harvest, and the panic is palpable.

— Jeffrey Gundlach (@TruthGundlach) March 18, 2020

Then, instead of looking at FRA/OIS, currency basis swaps, or the record surge in the dollar, Gundlach appeared to discover another indicator of market liquidity, or lack thereof: liquidation of “blue chip, but not at all trophy, art works“:

“Today I received panic offers of blue chip (though not at all trophy) art at slashed prices,” he tweeted, saying this was further evidence of a liquidity squeeze.

As if we needed more evidence of a liquidity squeeze crushing asset prices, today I received panic offers of blue chip (though not at all trophy) art at slashed prices.

— Jeffrey Gundlach (@TruthGundlach) March 18, 2020

Finally, in a tweet which echoed everything that we saidon Monday  in our post describing the Boeing fiasco in which the aerospace now giant demands a $60BN bailout after spending tens of billions on stock buybacks over the past decade much of them funded with debt, Gundlach said that he doesn’t think “government bailouts of over leveraged companies that got over leveraged via share buybacks at all-time highs, enriching executives and hedge fund investors, will sit well with the American people.” We agree.

I don’t think government bailouts of over leveraged companies that got over leveraged via share buybacks at all-time highs, enriching executives and hedge fund investors, will sit well with the American people.

— Jeffrey Gundlach (@TruthGundlach) March 18, 2020