Bond Expert Gundlach: Housing Collapse to Spark Second Financial Meltdown

Thursday, 26 May 2011 03:07 PM
By Dan Weil

The housing meltdown hasn’t ended yet, and it could ultimately spark another financial crisis, says renowned bond fund manager Jeffrey Gundlach, CEO of DoubleLine Capital.

“The housing market is dropping . . . and about to go to a new low," he tells CNBC. "I think we're looking at some type of echo in the credit crisis coming up here. That's what I'm afraid of."

He notes that the S&P/Case-Shiller Home Price Index is approaching a new trough. The index measuring prices in 20 major cities dropped 3.3 percent in February from a year earlier, the biggest decline since November 2009.

At 139.27, the index has almost reached its six-year low of 139.26 set in April 2009. And Gundlach isn’t the only one worried about that development.

“There is very little, if any, good news about housing,â€