Monday, November 23, 2015

One of the "Scariest Indicators in the World"

I received this email today from one of my online financial news sources.  Remember, this is a totally secular article.

You gotta love the headline.

The Scariest Indicator in the World

Those Federal Reserve governors who intend to vote for an increase in rates at their December meeting need to take a close look at some of the charts Jeffrey Gundlach presented on Tuesday. One chart – which Gundlach called his “scariest” – carried a particularly ominous signal for the global economy.

Gundlach is the founder and chief investment officer of Los Angeles-based DoubleLine Capital. He spoke to investors via a conference call on November 17. Slides from that presentation are available here. The focus of his talk was DoubleLine’s asset-allocation mutual funds, DBLFX and DFLEX.

Gundlach reiterated what he has said in prior presentations: A rate increase is not a foregone conclusion, at least not until the December employment numbers are released, and he is not a strong supporter of an increase.

The weakness in the U.S. and global economies, as signaled by a number of charts, was the key new information in Gundlach’s presentation on Tuesday. He called the chart below “one of the scariest indicators in the world”:

The chart shows that nominal global GDP growth on a dollar-denominated basis is -5.0% on a year-over-year basis. It was this low only twice, in 2009 and 1982, he said. Coincidentally, the Fed raised rates in 1982, which was one of only two times it did so when nominal GDP in the U.S. was below 4.2%.

I’ll show some of the other slides that Gundlach called worrisome, but first let’s look at his comments on Fed policy and the economy.

The economy and the Fed

The implied probability of a rate increase in December, based on the market pricing, is 64%, according to Gundlach. “That seems just about right,” he said. If the employment data is similar or better, the Fed will raise rates, he said; if data is worse, they won’t. That means that two out of three scenarios favor a rate increase, consistent with the market’s 64% probability.

That probability is also consistent with the stated positions of the Fed governors, he said.

“The final outcome will be highly dependent on not just the economy,” said Gundlach, “but also the credit markets.” Gundlach said that many sectors of the credit and commodity markets are “falling apart.”

Unless the data starts to improve, he said the Fed may reverse an eventual rate increase, as has been the case in Sweden and several other countries.

Gundlach said he was struck by the divergence of policies in the U.S. and Europe. In the U.S., real GDP is growing at 2%, and in the E.U. it is 1.5%. The 50 basis points difference does not align with the aggressively expansive policy in Europe and the calls for Fed tightening in the U.S., he said, even though unemployment rates are much higher in Europe.

“These are not great economic growth rates anyway,” he said.

There is something of an “industrial recession” going on in the U.S., Gundlach said. Industrial production year-over-year is “already in recessionary conditions,” and is near zero.


Of course the article simply gives us more evidence that some very smart people are telling us, in very matter-of-fact terms, that the global economy is perched on the edge of a financial abyss.

So should it surprise any of my readers if another shoe dropped and we experienced a HUGE correction...maybe even worse than the one that scared so many people in 2007-2009?


Do I believe that the global economy is going to collapse and lead to total anarchy BEFORE Christ comes for His bride in the rapture?


Do I believe that it is quite likely that the rapture of the church will lead to millions of Americans vanishing WHICH THEN could lead to the financial collapse of America WHICH THEN could pave the way for a NEW global currency which will ultimately be taken over by the Antichrist?


1 Thessalonians 4 reminds us of our 'blessed hope'....

After that, we who are still alive and are left will be caught up together with them in the clouds to meet the Lord in the air. And so we will be with the Lord forever

If you are reading this an having a hard time believing that millions of people will simply be snatched away by Jesus one day to meet Him in the clouds...maybe consider ASKING JESUS YOURSELF whether this passage is really true....then see what happens?

Even so, come Lord Jesus!


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