tl;dr
Edward Dowd, a former BlackRock fund manager, warns of an upcoming deep recession and market meltdown driven by a housing crisis and an AI bubble burst. He cites falling new home permits and tenant rents as signs of a housing crash, and predicts a potential 50% stock market drop by early 2026, follo...
Edward Dowd, a former BlackRock fund manager, predicts a deep recession and market meltdown fueled by a housing crisis, an AI bubble burst, government spending cuts, and reduced illegal immigration. Early warning signs include collapsing new home permits and falling tenant rents, signaling a housing market crash.
Dowd forecasts a potential 50% drop in the stock market, with the bottom expected in the first quarter of 2026, followed by a recovery. The current 15% decline in the Dow Jones Industrial Average is viewed as just the beginning of a broader credit crunch tied to global debt issues and stimulus measures from the COVID era.
The crisis is exacerbated by rising delinquencies in commercial real estate and auto loans. Looking ahead, Dowd anticipates long-term deflationary pressures that may force the Federal Reserve to cut interest rates and resume money printing.
For investors seeking protection, Dowd recommends holding cash, Treasury bills and bonds—highlighting Berkshire Hathaway’s significant holdings—and physical gold. He advises caution with Bitcoin due to its high volatility and correlation with risky assets.
In summary, the warning paints a picture of an old-fashioned deep recession rather than a systemic collapse, encouraging preparedness through diversified, lower-risk holdings while remaining watchful of economic indicators and market trends.