{"id":15698,"date":"2015-12-27T09:39:04","date_gmt":"2015-12-27T14:39:04","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15698"},"modified":"2015-12-27T09:39:04","modified_gmt":"2015-12-27T14:39:04","slug":"david-collum-the-next-recession-will-be-a-barn-burner","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15698","title":{"rendered":"David Collum: The Next Recession Will Be A Barn-Burner"},"content":{"rendered":"
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David Collum: The Next Recession Will Be A Barn-Burner<\/a><\/h3>\n
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With very few places for capital to hide<\/strong><\/div>\n<\/div>\n<\/div>\n<\/div>\n

For those who enjoyed his encyclopedic\u00a02015: Year In Review<\/a>, this week we spend an hour with David Collum\u00a0to ask:\u00a0After processing through all of that information, what do you think the future is most likely to bring?<\/em><\/p>\n

Perhaps it comes as little surprise that he sees the global economy headed back down into recession, one that will be deeper and more damaging than the 2008 crisis:<\/p>\n

In 2008\/9, while the equity markets when down, the bond markets went up. And that buffered an awful lot of pensions and 401Ks and endowments and things like that. And so people felt pain, but they didn\u2019t realize that there was an offsetting gain. They did not notice that part as much, but I think the next downturn is going to be concurrent bond market collapse and equity collapse and there will be no slack in that downturn.<\/p>\n

I think stocks and bonds are both at ridiculously high levels now. The bond market can only go down from here, right? I mean, it can keep going up for a while, but there is just nothing left to be squeezed out of it. Interest rates are at seven hundred-year lows, supposedly – they\u2019re certainly at stupid lows, right. You have a third of Europe at negative rates…\u00a0And so I think at some point the bond market\u2019s got to collapse. It will start in the high yield market, and that is happening right now. Then it\u2019ll spread, maybe treasuries will get bid to the stratosphere, but at some point you\u2019ve got to get a real return. And so bonds have to sell off to get back to that real return — after all, all crises are credit crises, right,? And then equities are going to go once there\u2019s not leverage out there for share buy backs and stuff like that.<\/div>\n
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That’s why I think the next recession is going to be a barn-burner.<\/div>\n<\/blockquote>\n

Click the play button below to listen to Chris’ interview with David Collum (74m:53s)<\/p>\n<\/div>\n

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