Jeffrey Gundlach says we will never see 1.5m housing starts per year again and so he says we should short the S&P homebuilder ETF.
You have to go back to March 2007 for the last time we came close to 1.5m, and Dec 2006 when we were above it.
US housing starts
We’ve been banging on about the weakness shown in the housing sector for what must be nearly a year now. Starts are looking like they may get back into the upward trend but there’s signs that we’ve seen a top. With the chances of rates going up increasing the US could see a further squeeze on this part of the economy further down the line.
Speaking at the Sohn investment conference he said that problems dogging the housing market include expected mortgage rate rises and the amount of student debt carried by young adults making savings for down payments difficult.
Gundlach also commented last month that he
“believes there is more deflation in the world than most people appreciate”
and that
“we will see potentially a deflationary scare again”
Doubleline are not doing too badly in the funds game and have been seeing continued inflows into their funds while the likes of Pimco are still trying to plug the leaks of flows out. In April Pimbo saw $3.1bn pulled form it’s total return fund making a 12th consecutive month of outflows. Doubleline’s TRF saw around $320m come in.
