Jeffrey Gundlach, chief investment officer of TCW Group, ticked off a host of cataclysmic forecasts for the financial services industry in a client conference call Wednesday that he titled No Market for Old Men, MarketWatch reports.
The market, credit and housing crises could continue for years, and the Standard & Poors 500 Index could decline another 30%, he warned. Defaults on prime mortgage loans could soar from 2% to as high as 10%, he said, calling the fallout sheer carnage.
Citigroup could be headed for trouble, Morgan Stanley and Wachovia are likely to be the next two takeover targets, and the total write-offs among financial services firms could top $1 trillion, he said.
If its like the Depression experience, and it sure is shaping up that way, it could take several years for the decline to continue, Gundlach said. Maybe we wont see a bottom in home prices until 2014.
Risk aversion is the order of the day, he said.