Juggling Dynamite

The mainstream never sees a recession or bear market coming not even when leverage and price-indiscriminate buying have reached record levels.  Now that a major loss cycle has arrived once more, the same crowd is saying that everyone has lost and no one could have seen this coming (neither is true) and that everything will rebound quickly in the second half of the year.  Probabilities do not favour this outcome.  As explained in this segment, the base case suggests a recession and bear market as bad as 2008, at least.

Dr. Nouriel Roubini returns for an in-depth analysis of the coronavirus crisis. Roubini explores coronavirus-related destruction in the real economy, the impact and shortcomings of the containment effort, and his view of the risks caused by an underlying debt bubble. He also explains to Real Vision’s Ash Bennington the individual elements of the policy response with a special focus on monetary policy and the US dollar. Here is a direct video link.

Good discussion of historical precedents and probable market paths from here.

John Hussman, Ph.D discusses his valuation framework, the problematic 12-year expected equity returns, the most likely inflation outcome and shows why we’re a long way from a slam-dunk buying opportunity. Here is a direct video link.

Hmmminar 5 – John Hussman (8 April 2020) from Grant Williams on Vimeo.

All types of debt have exploded in recent years due to indiscriminate lending and appetite for excessive borrowing which enabled an epic wave of real estate speculation and household spending.  This was always doomed to end in a firestorm of defaults and contracting credit. COVID-19 has presented an overdue spark.

How has COVID-19, job loss, declining income, and physical distancing impacted the mortgage industry? And how are home values going to be affected by all this? Enter Ron Butler. Ron is a seasoned mortgage broker and a first-time guest on the Debt Free in 30 podcast. On today’s show, we discuss the current real estate market and what will happen when the lockdown is over; why banks are tightening HELOC availability for borrowers; and why now may not be the best time to refinance your mortgage if you are carrying unsecured debt. Ron also provides insight into the ‘death’ of the private mortgage industry and describes the new world of mortgage lending. There’s lots to learn from this mortgage insider.  Here is a direct video link.

Not just in Canada, see Here’s why it’s much harder to get a mortgage, or even refinance.