This L.A. billionaire says it’s ‘terrible time’ to bet on U.S. housing

Jeffrey Gundlach, the billionaire money manager and chief executive officer of DoubleLine Capital, is down on real estate.

It’s a “terrible time” to bet on U.S. housing and homebuilder stocks because of high inventory and weak demand, Gundlach said Thursday in London.

Gundlach, whose Los Angeles-based firm oversees more than $140 billion, also repeated his forecast that the likelihood of U.S. recession before the 2020 election has grown, based on changes in the Treasury yield curve. The odds of a U.S. recession before the election are 75%, he said.

“We should be on recession watch before the 2020 election,” Gundlach said Thursday in London. “We’re getting closer but we’re not there yet.”

The best signal of a recession is not an inverted yield curve, the money manager said. “It’s the inversion occurring and then going away.”

Yields on 2-year Treasuries exceeded those on 10-years in August, forming an inversion, before flipping back this month.

In other comments, Gundlach said he’s turned “neutral” on gold, one of his previously recommended investments. “It’s had a big run.” And he believes the U.S. and China are unlikely to reach a long-term trade pact before the presidential election.