An inefficient, weak tax system. A bloated military budget. Multiple wars being waged simultaneously.
You can be excused for thinking the preceding sentence is about the United States, but in fact, it describes the Roman Empire two millennium ago as it began its long, hundred-year decline. Jeff Gundlach, CEO with DoubleLine Capital LP in Los Angeles, used the parallels between Ancient Rome and the U.S. to frame his latest webcast this week.
In the webcast, Mr. Gundlach goes on to point out that, like the Roman Empire of yesteryear, the U.S. today maintains a massive debt load and by far the world’s largest military budget. And like Rome, where a destitute underclass was granted little social mobility, a similar “underclass” is emerging in the U.S. as the country is dogged by a sluggish jobs recovery and high unemployment.
But of course, given the two-thousand year gap between these two societies, making comparisons works on a broader scale and not so well when taking a more nuanced view. Mr. Gundlach’s webcast is accompanied by a 70-slide presentation that highlights the many unique problems facing the U.S. today. Here’s a link to theslideshow hosted by Business Insider so you can take a look for yourself.
Mr. Gundlach transitioned his pessimistic overview of the U.S. economy with a cautious outlook for stocks this year. He warned investors to be cautious on risky assets in 2012, even despite the blistering hot performance stocks posted in January.
Mr. Gundlach is also bearish on financial stocks in particular. He warned investors holding Bank of America that despite the stock’s price rebound, anyone holding shares should sell immediately.
Financial Post
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