It appears that a former BlackRock fund manager, Edward Dowd, has donned his fortune-telling hat and is issuing a rather alarming proclamation regarding the state of the US economy. One might say he’s the modern-day Cassandra, but with a penchant for financial forecasts instead of doom-laden prophecies.
In a recent tête-à-tête on Market Disruptors, Dowd has predicted a recession and a market meltdown that could make even the most stoic investor clutch their pearls. The culprits? A housing crisis that’s about as welcome as a wet sock and an AI bubble that’s about to burst like an overripe fruit. 🍐
He points to the plummeting new home permits since 2022 and the falling tenant rents as the early warning signs of a housing crash. It’s like watching a slow-motion train wreck, but with more spreadsheets and fewer whistles.
Moreover, Dowd warns that government spending cuts and a slowdown in illegal immigration will sap economic growth faster than a leaky bucket. He suggests that stock markets could face a potential 50% drop, which, if history is any guide, is about as likely as a cat avoiding a sunny spot.
“The idea here is you have a recession that we think manifests itself pretty soon, and the stock markets bottom sometime in the first quarter of 2026,” he muses, sounding like a financial Nostradamus. “Then you have a recovery, that’s the ideal situation… We’re not claiming anything’s going to go systemic. We’re not doom and gloom. It’s just we think it’s an old-fashioned deep recession and hopefully it’s quick.”
He continues, “Typically speaking in recessions like in the dot-com recession and the great financial crisis, stocks went down 50% before they recovered, so we’re nowhere near down 50% yet and we think that’s coming.” Well, that’s comforting, isn’t it? Like being told the dentist will only use the small drill.
The Dow Jones Industrial Average has taken a nosedive from its all-time high of 45,073 in December 2024 to a low of 38,314 last month, which is a rather alarming 15% decline. One can only imagine the stockbrokers’ faces—like a cat that’s just been told it’s time for a bath.
Dowd traces this impending crisis to a global debt problem, which was temporarily masked by the COVID-era money printing spree. It’s like putting a band-aid on a gaping wound and hoping for the best. With commercial real estate and rising auto loan delinquencies signaling a broader credit crunch, it seems we’re in for a bumpy ride.
In the long run, he expects deflationary pressures to force the Federal Reserve to slash rates and print money, which sounds like a recipe for financial chaos. For protection, Dowd advocates holding cash, pointing to Berkshire Hathaway’s massive position in T-bills/bonds, as well as physical gold. He also cautions against Bitcoin’s volatility, which is about as stable as a one-legged man in a butt-kicking contest.
Read More
- Masters Toronto 2025: Everything You Need to Know
- We Loved Both of These Classic Sci-Fi Films (But They’re Pretty Much the Same Movie)
- ‘The budget card to beat right now’ — Radeon RX 9060 XT reviews are in, and it looks like a win for AMD
- Valorant Champions 2025: Paris Set to Host Esports’ Premier Event Across Two Iconic Venues
- Forza Horizon 5 Update Available Now, Includes Several PS5-Specific Fixes
- Gold Rate Forecast
- Street Fighter 6 Game-Key Card on Switch 2 is Considered to be a Digital Copy by Capcom
- The Lowdown on Labubu: What to Know About the Viral Toy
- Karate Kid: Legends Hits Important Global Box Office Milestone, Showing Promise Despite 59% RT Score
- Mario Kart World Sold More Than 780,000 Physical Copies in Japan in First Three Days
2025-05-24 10:22