Since June 2014 or thereabouts, bank loan prices are down 10%, some junk bond indexes are down 17%, emerging market stock indexes are down 29%, commodities have fallen 40% and the Federal Reserve is signaling it will raise interest rates. To say DoubleLine CEO Jeffrey Gundlach questions their wisdom against that backdrop of financial data is an understatement.

Carnage is nearly ubiquitous and the consensus believe that the Fed will hike rates once or twice and call it a cycle. Yet Gundlach predicted in a webcast yesterday that once the Fed raises interest rates, the move will change the conversation, setting in motion a series of events few expect and one that the central bank may find difficult to control. Almost immediately, everyone will start talking about the next rate increase.

The Fed believes it needs to raise rates to maintain the central bank’s credibility, which has been hurt by its own procrastination. It also believes it needs ammunition for when the next recession occurs. Finally, savers have been penalized for seven years and forced into some of the risky investments Gundlach cited that have cratered in the last 18 months.

One indicator he cited revealed that the Fed could raise rates as much as 1.38% over the next year. By that time, everyone would be talking about another 12 months of rate hikes into late 2017.

At 2.0%, GDP growth is much weaker today than it was during the previous three initial rate hikes. In fact, it was about 3.0% in June 2004, 4.5% in June 1999 and 4.1% in February 1994.

Thirty-year Treasurys, known as the long bond, are “celebrating” the carnage in junk bonds, emerging markets and commodities, Gundlach said. That’s hardly a good sign for most asset classes, as the long bond typically rallies in bad times—just look at how well they performed in 2008 when virtually every other asset class got pounded.

Gundlach pointed to profit margin declines in the S&P 500 that others have called a profits recession. They are falling from their highest levels in history and he noted the last time this happened was in 2007. The year 1985 is the only time in recent memory when corporate profit margins fell by 60 basis points and the decrease in margins wasn’t accompanies by a recession.

“In 2007, people looked at junk bonds and said, it’s just subprime,” he recalled. Today, many are saying it’s just oil. High-yield spreads over Treasurys are significantly higher prior to first interest rate hikes than they were in previous cycles. “I don’t like buying things [like junk bonds] that go down every day,” he said. But “stress in the junk bond market is something we can apparently just explain away.”

Those who think the oil market is fishing for a bottom could be in for a rude surprise. Gundlach said that oil companies who hedged against lower oil prices several years ago are running out of time, a factor that could spell more trouble in the junk bond market.

The effect of a rising interest rate cycle in the U.S. on the rest of the world is perhaps the most frightening prospect. The Shanghai Composite “looks really bad, a lot like the Nasdaq in the year 2000,” he said.

Moreover, the only word to describe Brazil’s economy with GDP falling 4.5% is “depression,” Gundlach said. Charts of emerging market equities display a series of descending top after descending top—and that’s after five years of consolidation.

If you think Europe is doing much better, guess again. Wolfgang Munchau, the respected editor of the Financial Times, recently urged the European Central Bank to consider a George W. Bush style stimulus on a much grander scale. It would involve sending every one of the European Union’s 500 million citizens a check for 5,000 or 10,000 euros (Bush only sent a check for $500). “This is the Financial Times, not The Onion,” Gundlach remarked.

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