| Dear Friend, The word “expert” was first used as a noun in the early 15th century and meant “a person wise through experience.” That definition fits Jeffrey Sherman, deputy chief investment officer at DoubleLine Capital and a speaker at the upcoming SIC, to a T. He is the master of fixed income and real asset management. In addition, he serves as a portfolio manager for multi-sector and derivative-based strategies—matters so complex that even many financial professionals have trouble understanding them. Just a few days ago, I discovered this fascinating 47-minute podcast with Jeffrey where he talks about the credit market, corporate bonds, interest rates, and deficits. I highly recommend you watch it. Here’s just one piece of the interview, which I present to you because it shows how clear-eyed Jeffrey is on economics and finance. The host, Lance Roberts, asked Jeffrey if he was worried about the credit markets. Here’s what he said: Ultimately, supply and demand rule financial markets, so when you have this glut of supply of treasuries coming to market and they were financing the tax cuts from the last year or so, you also have [...] reckless spending policies through Congress. So what happened here, there is no intention of balancing the budgets. We now have this new theory—I would like to put air quotes around the word “theory”—it’s this “Modern Monetary Theory” that says deficits don’t matter. And if deficits don’t matter, then we should spend, spend, spend. [...] But it matters over the longer term. And so, as people wise up to this idea and see how much debt’s out there and that we are on these paths of having just reckless spending or not even trying to balance budgets, ultimately it should put some pressure on corporate yields. So I don’t buy the argument that deficits don’t matter, and I would put back to Congress, “If deficits don’t matter, then let’s just stop collecting tax receipts, right?” Debt and deficits are matters that worry me too, as you probably know. I completely agree with Jeffrey, and I can’t wait to hear more from him at the SIC. If you want to be there with me live, all you need to do is get yourself one of our heavily discounted Virtual Passes. Aside from the ability to watch Jeffrey and the other five-star speakers in real time during the SIC, your Virtual Pass also includes video and audio recordings, transcripts, and slides, which will all be uploaded to the passholders site after the conference. The more I learn about our speakers, the more excited I get. I hope you’ll be joining us at the SIC with your Virtual Pass. Your deficits most definitely do matter analyst, John Mauldin
Chairman, Mauldin Economics | 