#663: The Canary in the Coal Mine for Credit Markets with Ed Dowd

Summary

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TFTC #663: The Canary in the Coal Mine for Credit Markets with Ed Dowd

Date: September 20, 2025
Host: Marty Bent
Guest: Ed Dowd

Overview

In this episode, Marty Bent sits down with Ed Dowd—former BlackRock portfolio manager—to dissect the implications of the Federal Reserve’s latest interest rate move, structural vulnerabilities in the US housing and credit markets, and the broader macroeconomic and societal shifts underway. They analyze the “canary in the coal mine” signaling a credit crunch (Tricolor Auto bankruptcy), the ripple effects of immigration policy changes, asset bubbles, and the role of hard assets like Bitcoin and gold. The conversation ends with a candid discussion about societal division, institutional decline, and personal strategies to weather systemic tumult.

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Key Discussion Points & Insights

1. The Federal Reserve’s Rate Cut & Political Significance

• Fed Cuts and Political Timing
  • Ed Dowd: The recent 25bps cut is “a slap in the face to Trump” as prediction markets expected it, but macro data indicated a 50bps cut was needed. (01:01)
  • Housing data is “a disaster,” with millennials unable to afford homes and boomers unwilling to lower prices. The housing market is stalling even as agents continually relist properties.

“People can’t afford to own homes. The millennials can’t buy from the boomers. It’s a disaster.”
– Ed Dowd (01:32)

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2. Have We Been in a Recession? Immigration’s Role as the “Elephant in the Room”

• Ed Dowd: Core indicators suggested recession by late 2023/early 2024, but they were "wrong" until factoring in an economic variable: illegal immigration, which “juiced” the economy through government-funded spending (03:21).
• Government-fueled job creation and immigration deferred the recession, but with border closures and self-deportations rising, the artificial economic “juice is all gone now.”

“It created a false, juiced economy. Some of which are multifamily housing developers. That’s going to be the crisis…It’s not a single-family home crisis… it’s going to be a multifamily home crisis.”
– Ed Dowd (04:09)

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3. The Housing Market: Overbuilding, Affordability, and Inevitable Correction

• Anecdotal & Statistical Evidence:
  • Overbuilding in cities like Austin led to a glut, with no buyers at current prices (02:20).
  • Home prices fueled by post-COVID Fed liquidity, but cost pressures (insurance, taxes, HOA fees) have outpaced affordability.

“People are slowly…realizing that the prices they’re listing, they’re not going to get, because no one can afford it.”
– Ed Dowd (12:10)

• Permits & Housing Data:
  • Historic divergence between inventory and sales (gap of ~500,000 homes), a signal prices must fall (10:45).

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4. Tricolor Auto: The Canary in the Coal Mine for Credit Markets

• Subprime Auto Lending Gone Bust:
  • Tricolor Auto, heavily lending to undocumented immigrants, collapsed. The growth-Ponzi model couldn’t sustain once border inflows stopped.
  • Regional banks and asset-backed bond investors now scrambling to recover collateral (07:47–09:48).

“Any kind of Ponzi like this needs constant new illegal immigrants to keep it going. Once the growth stops, it’s exposed and they just went tits up, bankrupt.”
– Ed Dowd (07:47)

• Subprime auto is the first visible domino, but tighter credit and real estate will spark broader turmoil.

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5. “Yield Curve Control” – The Coming Policy Response

• Fed’s Tardy Action & Long-term Instruments:
  • Monetary policy effects lag 18–24 months. Previous cycles show that cutting rates doesn’t instantly bolster housing (13:45).
  • Predicts “yield curve control” (YCC) is on the table to manage debt; government will force institutions and citizens to own treasuries.

“The Fed’s going to come in and do yield curve control and bail you out. This is a national security issue; we have $37 trillion in debt…”
– Ed Dowd (15:19)

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6. Bubbles & Valuations: AI, Stock Market, and Historical Parallels

• AI is the New Dot-Com:

  • Current AI investment resembles the telecom/dot-com bubble. Real productivity boom won’t come for 5–6 years and most winning companies “don’t even exist yet” (19:54, 21:20).

• Stock Market Divergence & Overvaluation:

  • S&P highs are due to a handful of mega-cap tech stocks; average stock is languishing.
  • Forward P/E ratios are in dot-com-bubble territory; future 10-year equity returns likely zero (28:18).

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7. Hard Assets: Gold & Bitcoin’s Place

• Gold:
  • Short-term correction likely, but “long-term, you want to own gold” (22:23).
• Bitcoin:
  • Currently correlated with risk assets. Unless it decouples, will likely participate in the broader asset drawdown (22:23–23:49).

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8. Societal Division, Institutional Trust, and Class Dynamics

• Charlie Kirk Assassination and the "Fog of War":

  • A divisive event—Ed worries about narratives being spun to distract from class issues (32:04–34:13).
  • Urges listeners to resist division and focus on the real class struggle (“.01% that control the wealth”).

• Post-COVID Social Breakdown:

  • Lasting damage from vaccines, spike in disabilities and psychiatric claims (35:10).
  • “We have a population that’s getting sicker, that also isn’t thinking straight.” (36:28)

• Need for a National Reckoning:

  • Institutions—pharma, finance, education—are “bankrupt across the board.” Only a true national conversation and accountability can begin to set things right (46:03–47:16).

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9. Practical Advice for Individuals

• Portfolio Positioning:
  • Retail should hold cash equivalents or short-term T-bills, avoid leverage. “Raise some cash…have some dry powder in your portfolio” (48:07).
  • If you have no exposure, consider gold.

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Notable Quotes & Moments (with Timestamps)

• On the perverted housing market:

  “The only way to readjust this and make the math work is price.”
  – Ed Dowd (12:10)

• On Fed policy lag:

  “People don’t understand about Fed monetary policy. It takes 18 to 24 months for that to get into the system. It doesn’t happen immediately.”
  – Ed Dowd (13:45)

• On AI hype:

  “All the people who made these investments initially are going to get wiped out as usual in a bubble. And that’s not a bad thing. That’s the way capitalism works.”
  – Ed Dowd (21:20)

• On generational wealth and market resets:

  “This pain is good. Lower home prices are good for millennials and Gen X that are younger… this reset is basically a passing of the baton of generational wealth from boomers back…to those actually doing the work.”
  – Ed Dowd (24:07)

• On yield curve control and financial repression:

  “Jamie Dimon…knows that financial repression is coming and it’s not pretty…the bankers’ creed is inflate or die. That’s why even a mild recession could take down the whole system.”
  – Ed Dowd (26:09)

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Major Timestamps for Key Segments

• Intro & Fed Rate Cut / Housing Start Crisis: 00:07–03:21
• Recession and Role of Immigration: 03:21–07:19
• Tricolor Auto collapse & Subprime Lending: 07:19–11:20
• Housing Overbuild & Affordability Crisis: 11:20–13:45
• Fed Policy Lags, Yield Curve Control Discussion: 13:45–16:39
• AI Boom Parallels & Market Valuation: 19:54–22:23
• Gold, Bitcoin, Asset Correlation: 22:23–23:49
• On Being Called a Doomer & Generational Wealth Reset: 23:49–25:49
• Crisis Policy Response & Jamie Dimon/Financial Repression: 25:49–27:27
• Societal Trends, AI, Market Valuations: 27:27–29:43
• Charlie Kirk Assassination & Class Divides: 32:04–34:43
• Vaccine Aftermath, Social Fallout: 35:10–37:19
• National Reckoning and Institutional Decay: 46:03–49:14
• Personal Financial Positioning (Actionable Takeaways): 48:07–49:14
• Private Credit, Shadow Banking, and Next Dominoes: 49:14–52:36
• Spiritual Battle, Media Propaganda, and Community Building: 53:54–63:26

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Closing Thoughts & Takeaways

• Major economic, social, and institutional imbalances are converging, with signs flashing red across credit markets, housing, and trust in public institutions.
• Resilience and prudence, both financially and socially, are crucial: hold cash, don’t over-leverage, build trustworthy personal networks, and avoid feeding into divisive social narratives.
• For the currently “frothy” Bitcoin and gold markets, expect volatility; Bitcoin remains vulnerable to risk-off shocks in legacy markets.
• There’s a generational and class reckoning in the works; to navigate it, keep perspective and don’t get sucked into the “fog of war.”
• Above all, Dowd urges listeners to “focus on what you can control” and “build new systems, communities, and relationships rooted in integrity.”

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End of summary.

Transcript

[Ed Dowd]

You've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for bitcoin.

[Marty Bent]

If you're not paying attention, you probably should be.

[Ed Dowd]

Probably should be. Probably should be.

[Marty Bent]

Crazy times sitting down again with Ed Dowd. And I think. I think we're going to. We're going to ease into it with somewhat benign information. Maybe it's not benign, but I think the least controversial topic of the week, which is the Federal Reserve finally cutting rates 25 bips. And you were telling me that you think this is a slap in the face to Trump.

[Ed Dowd]

Well, the prediction markets are expecting 25. Our math was showing they should have done 50. That was our. That was our call. I don't care that I'm wrong, because I said to people, if they do 25, it's kind of a thumb in the eye of Trump. They're probably going to be doing more cuts as we roll forward. Housing starts and permits came out today. They were a disaster. We've been predicting a real estate housing crisis. We put out a report in January that talked about that, that people can buy. And our conviction in that call is only just getting more convicted, I should say. And today the data is bad. My partner Carlos called me this morning. He said, I'm updating the dashboards and this is pretty bad. The housing market's rolling over. People can't afford to own homes. The millennials can't buy from the boomers. It's a disaster. And the boomers are keeping their prices high. Anecdotally. On Maui, I have a friend who's a real estate photographer, and his business is booming. Why is it booming? Nothing's selling, but people keep firing their real estate agent and relisting, and he keeps getting to go reshoot and or relicense his photographs. He's having a great time while no one's selling any homes.

[Marty Bent]

Yeah, I think, like you said, you retweeted it, but I recorded a melody right yesterday, and it seems pretty clear. I very much like people like her who actually get in their car and drive to go see these things. And one of the cities that was a topic discussion is the city I just moved away from, which is Austin, Texas. Moved back home to the Philadelphia area. But it was very clear to me when I was down there for the last four years that they were overbuilding to a degree that was astonishing, both downtown and in the sprawl. And so you couple the housing data and just anecdotally to your point, I'm a millennial father with children, with friends who are fathers and mothers with children in a similar situation and nobody's moving to buy these houses. The prices are simply too high. And then you factor in the jobs revision and it seems clear. I guess that's my big question, like have we been in a recession for the last two years?

[Ed Dowd]

You know, we think we have. So we, we, we made a, a call that ended up technically being wrong. We were looking for a recession at the end of 23, beginning 24. That's what all our early economic cycle indicators were telling us. They, they had worked for the last 60 years and then suddenly we were wrong. So we asked ourselves, hey, the laws of economic fundamentals changed or is something else going on? And we eventually figured out there was a new economic variable that really isn't talked about. And it's the elephant in the room. It was illegal immigration. When you drop 20 million people into a country over a four year period and you fund it via deficit spending, because that's how they did it. That's why we were running 8%.

[Marty Bent]

Debt.

[Ed Dowd]

To GDP deficits, which are crisis level deficits. Last time we ran those types of deficits was during the great financial crisis we ran for two years in 2023 and 2024. And there were two things going on. Unprecedented government job creation and importing illegal immigrants. And that was all funded via direct payments from the US government and Washington through the NGOs. It created a false juiced economy. A lot of signals were sent to decision makers that were wrong, some of which are multifamily housing developers. That's going to be the crisis is not a single family home crisis that's coming. It's going to be a multifamily home crisis. Structures with five or more units. We have not seen this type of overbuild since the 70s when the baby boomers were leaving colleges and going, you know, getting their first jobs before they bought homes. So we have multifamily housing crisis which is also going to drag down single family home prices. And we've had a, you know, there's an overbuild right now and high inventory in single family homes. The home builders are struggling to sell their inventory and no one could afford these homes. And with the cessation of the illegal immigration flow that started under Trump. So that's at zero now. And the current deportations are not that high yet, but self deportations are quite high. Lacy Hunt, an economist, thinks there's been about 1.2 million people that have self deported. I think there's only been a couple hundred thousand of actual deportations. But the second derivative on that is chilling. And a lot of the flow of funds to these illegals has been stopped or curtailed. So a lot of these people are leaving. So that, that what the juice that went into the economy in 23 and 24 that kept us afloat and kind of prevented a recession is all gone now. And now we're left holding the bag. And Trump, Trump is going to have a housing recession coupled with a stock market bubble. So we have a.com bust like you know, 2000.com bust coming and a housing crisis at the same time. So it's going to be ugly. It's not apparent yet to the average Joe because the stock market is a new all time highs based on 7 AI stocks, 8 AI stocks and if you look at the value line geometric index which is 17,000 issues, it has not gone above the 2022 highs. The average stock has not done well in this market. It's an unprecedented bubble of epic proportions and not a question of if the wind blows and we think it's sooner rather than later, trying to call top is a fool's errand. Well, you won't know the top until it breaks. We've never crashed from all time highs. You'll get a high, you'll get a sell off of 10 to 15%, then a counter trend rally and then if the counter trend rally doesn't go back to new all time highs and the bear market has begun. So we won't know we're in a bear market until we see some price action telling us that. But we think it's coming soon.

[Marty Bent]

Well, let's dig into these details starting with the effects of the closing of the border and self deportation you were tweeting about. You quote, tweeted the tricolor story, which I wasn't aware of until a couple days ago when I recorded with Melody Wright and she was under the impression that this is a canary in the coal mine, potentially first domino to fall in credit markets in terms of liquidity crunch.

[Ed Dowd]

Yeah, there's, it's one of many. But you know this Tricolor auto was basically lending to a large part of their book was lending Giving loans to illegal immigrants that didn't have, it's coming out now. They didn't have like licenses and, or documentation and they just gave them money to go buy cars and that, that's all gone. Poof. Because any kind of Ponzi like this needs constant new illegal immigrants to keep it going. So the growth, it's called a growth Ponzi. And once the growth stops, it's exposed and they just want tits up bankrupt. And it's going to. And there's a lot of banks that are lending to Tricolor Auto to finance these loans and now they're holding the bag and they're going to have to write off these loans. And this starts to send a chilling effect, you know, throughout the credit system. Credit credit is going to start to tighten. It already has. And additionally Tricolorado, you know, probably sold a lot of these loans in the asset backed market and a lot of these bonds are sold as aaa and I'm hearing that they're not trading like AAA bonds anymore, obviously.

[Marty Bent]

Here's the tweet that you quote tweeted. As you mentioned, the bondholders are scrabbling and I think the second paragraph is very telling. In Dallas, the regional bank Triumph Financial has dispatched teams of employees to use car lots where they're identifying, whisking away to safe locations the vehicles they believe are collateral in their loans. In midtown Manhattan, a boutique investment firm that built a position Tricolors Assetback Bonds. Clear Haven Capital Management has been calling other bondholders urging them to band together and fight to keep big banks away from the assets that belong to them. Those banks include JP Morgan, Fifth Third Bancorp. They've begun to forensically examine their own collateral to ascertain the magnitude of the losses. And this is an area of the market, I mean I think you've been on top of it, but not where I would expect this to start. Subprime auto lending.

[Ed Dowd]

Yeah. So this is gunpow. The real estate market has been floated by illegal immigration. Not so much in home purchasing, but you know, putting a floor on rents. And when you have rent floors, you know, owners of homes that rent to other individuals or multifamily housing can kind of get by with, with, with, with their economics. Well, that's all going the wrong way. And new tenant rents started plump, which is a quarterly series that's really not that well followed. We talk about it in one of our real estate reports. It's been plummeting since the fourth quarter and that started right around when Trump got elected. There were a Lot of self deportations when Trump got elected and new tenant rents started collapsing. New tenant rents are a canary in the coal mine for all tenant rents which then lead into shelter and prices of homes. It's beginning and you can see it's starting to show up in the housing starts numbers and the permit numbers. Permits have been. Permits peaked in 2022. New permits for single family homes peaked in 22. They've been rolling over. We have an unprecedented gap between homes for sale and homes sold normally. That time series closely follows each other and the gap is about 500,000 homes right now. So how does that close? That closes with prices coming down. And I think you talked to Melanie. When did you talk to her? Yesterday, the day before?

[Marty Bent]

Two days ago?

[Ed Dowd]

Yeah, yeah. She was talking about. And you were talking about the inability for people to make the math work. And what's happened is home prices spiked after the, after Covid and part of that was due to the Fed. I don't know if people know this, but the Fed went in and bought an unprecedented amount of mortgage backs and right after Covid and they took that supply out of the market. That gave liquidity to other lenders to reload and started a housing mini housing boom when rates were low before they started their interest rate spike. And that caused just, that's what we're seeing now is this overbuilding from that liquidity event. And then interest rates have gone up. That makes mortgages unaffordable for the average person. Then you have the insurance costs which have doubled since COVID You have property taxes which are up a lot. And then if it's condos, HOAs have doubled. People, people can't make the math work to buy a new home. And so there's the only way to readjust this and make the math work is price. And people are, people right now are slowly, it's dying on them that the prices that they're listing they're not going to get because no one can afford it.

[Marty Bent]

And I think there's a lot of people hoping that it solves. On the rate side of things, it's two part equation price or rates. And I think many are convinced and under a state of amnesia that the Fed beginning their rate cut regime will lead to a lower 30 year mortgage rate, lower 10 year bond, lower 10 year U.S. treasury yield, 30 year U.S. treasury yield. But as we learned last year, that's not a foregone conclusion. And I think that brings up the sort of profundity of this particular Fed meeting, really the lead up to this meeting over the last year with Trump berating him before the election, continuously berating him after. Lisa Cook getting kicked out, Stephen Mirren getting put in, and the Fed signaling that they want to add something to their dual mandate, make it a tri mandate, if you will, with implicit yield curve control. Yield curve control by any other name. And so what effect do you think that has, if any, on the housing market particularly?

[Ed Dowd]

Well, this is something people don't understand about Fed monetary policy. It takes 18 to 24 months for that to get into the system. It doesn't happen immediately and it doesn't benefit the economy. There's a time lag. And just like when they raise interest rates from 0 to 5.5%, it really doesn't start to hurt the economy until any cool inflation until 18 months later. And that started happening during the 2024 election. May of 24 was 18 months after the Fed rate hike cycle. So these cuts and people got to remember they started cutting interest rates in 07 and they cut all the way down to the bottom in 09, went to zero and home prices went straight down. And there's an 18 year housing cycle and we're back since 2007. We're 18 years from there. Here we are. And it's not going to. And not only that, they're behind the eight ball because the payroll numbers are fraudulent. So they should have been cutting a lot last year and they didn't. And so real yields are still around one and a half percent and that's a problem in inflation. We're predicting inflation will print a sub 2% number before the end of the year. CPI. Now everyone says, oh, CPI is fake. Yeah, it is fake, but it's rate of change and that's what people in the bond markets care about. And everybody's overallocated stocks and under allocated bonds because it's been a massive, unprecedented bond bear market for the last three years. One of our favorite asset classes is the 30 year Treasury. And to your point, everyone said, oh, the 30 year, they're not going to be able to sell those well in a slowing recession deflationary scenario which we see coming, the 30 year traditionally goes up quite a bit in price, down in yield. And you just mentioned the third mandate, yield curve control, which you win both ways. The economy slows, you make a lot of money on the long bond. And even if you're wrong there, the Fed's going to come in and do yield curve control and bail you out. Because this is a national security issue and we have 37 trillion in debt that needs to be refinanced. We have too much on the short end and the government is going to force the U.S. institutions and U.S. citizens to own these bonds. And that's why there's this stablecoin push, as you know, to fund the deficits. This is a national security issue. And don't bet against the government to force you into treasury securities.

[Marty Bent]

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[Ed Dowd]

Well, they're not necessarily wrong, but it takes time for these things to happen. Let's talk about these trade deals. We have a European trade deal announced. We have a Japanese trade deal announced, right? Well, those both have to be ratified by their respective parliament. So their agreements, memorandums of understanding, they're not ratified yet. And oh, by the way, trade needs to be rebalanced, but there's going to be pain along the way because tariffs are not inflationary. They are in the short term. But in the long term, when you look at the whole economic what the impact economically in the micro level, they're deflationary. We wrote about this several months ago and you're going to see a margin squeeze on America's corporations because they're not going to be able to pass the prices along and that's going to cause them to shed employees. This is all coming. So Trump, Trump has the right idea, but there's pain and a valley in between his policies taking effect. And the AI boom is classic. It's just like the dot com telco dark fiber buildup boom. It's a lot of speculation and hype. There's no revenues there and the productivity isn't going to come for five, six years from now by the way, most of the AI giant companies that we're going to want to own don't even exist yet. Because if you think about what happened during the dot com boom, the only one that came out of that, that went on to Gloria was Amazon, Facebook, Google, Apple really didn't exist until after the cheap broadband was utilized. And that's what's going to happen. Pricing for AI is off the charts ridiculous and it's going to have to be recapitalized at much lower prices. So all the people who made these investments initially are going to get wiped out as usual in a bubble. And that's not a bad thing. That's the way capitalism works. There was a railroad bubble where everybody invested in building out the railroads and the first investors, the speculative investors all got wiped out. And then we had the railroads built and then everything was recapitalized at much cheaper prices. Then the productivity boom came later. So people aren't wrong, it's just that they're wrong in the next two years and it's going to be a very painful problem.

[Marty Bent]

So we've seen gold scream to all time highs. Bitcoin is I believe about 5% below its previous all time high. How do you think these hard assets, neutral reserve assets fare?

[Ed Dowd]

Well, it's tough because if you look at gold had a run up into the great financial crisis and then corrected 50% once the margin call came. I don't know if gold's going to go down 50%. It'll have a pullback, but long term you want to own gold because they're making gold money again. We all know that the dollar reserve system at some point is going to become renegotiated again. The call on that is not imminent. But gold will have a pullback I think. I wouldn't worry about it, I wouldn't panic. I'd buy more. Bitcoin, as you know and we've talked about this is unfortunately very highly correlated with risk assets. And unless it decouples this time, which I don't know if it will if we get the financial asset correction, I'm predicting bitcoin will participate in that.

[Marty Bent]

Makes sense, which is it's funny because I'm just using pattern recognition sentiment indicators. Not everybody obviously yourself and others are ringing the alarm bell. But there's many people are convinced that we're going to 250, 300 in Bitcoin by the end of the year. And who knows, maybe that's the blow off top and that's when it may.

[Ed Dowd]

Be and Maybe bitcoin decouples. But if you want to go with historicals, it won't until proven otherwise.

[Marty Bent]

And I'm sure you've heard the meme floating around like never doom. And I'm a big. Just generally never doom. But when it comes to financial analysts covering these subjects, there's a growing contingent of people who don't want to hear any of the negative analysis and would call somebody like you a doomer.

[Ed Dowd]

Well, I'm not a doomer. And myself and other economists that have been doing this for a long time were wrong about the recession in 2324. But the problem is when you avoid the pain that should have come then and you blow a bubble like they did with illegal immigration, you've misallocated capital. The Fed made bad decisions, corporations made bad decisions, and the capital market made that decision. So when this all corrects and equilibrium is restored, because that's what markets are, they eventually reach their equilibrium. There'll be a lot of pain. Now, I'm not a doomer. This pain is good. Lower home prices are good for the millennials and Gen X that are younger. This is not. This is not necessarily a bad thing. Now, obviously, I don't want people to lose their jobs, but this reset, not great reset, but this financial reset is basically a passing of the baton of generational wealth from boomers back down to the generation below that's actually doing the work. And look, my fear is we get more of the same if we have a correction, what do we expect the Fed will do what it does do? Unprecedented monetary policy. The Trump administration might do things that harm the younger generation long term by bailing out the boomers. Again, this is a generational battle that's been going on. And the boomers, you know, they've been bailed out since the great financial crisis.

[Marty Bent]

Well, on that, to that point, if this crisis does materialize, we have correction. Housing market, stock market, and the government and the Fed are forced to react. What, in your mind, would be the most advantageous way to react to this particular Crisis compared to 20 2008?

[Ed Dowd]

Yeah, I don't know what they're going to do. Yield Earth control, I think, is on the table and they're talking about it. And if you've been watching what they're doing at the banks, Jamie Dimon has been saying, hey, you need to loosen up the capital ratios on Treasuries so that the banks can buy more Treasuries. And there's a reason that Jamie Dimon knows the game. He knows that financial repression is coming and it's not pretty when it happens. And the problem is the system. The system relies on constant inflation. Bankers creed is inflate or die. That's why we're at the point now where even a mild recession could take down the whole system because there's just so much leverage and financialization of the US economy which was hollowed out over the last 30, 40 years of these NAFTA trade deals and exporting all the jobs overseas. So we have this kind of financialized economy where a lot of people's wealth is in their home, which home is a place where you live. Your wealth should be other things like savings and productivity and jobs. And it's been basically a Ponzi speculative financialization of our economy.

[Marty Bent]

Yeah, it's funny observing the Silicon Valley types that are really bullish on AI and they're totally convinced that it's going to lead to this productivity boom, which I think it will eventually, to your point, years down the line I used. It certainly made us more productive, more efficient, able to do more with less here at the media company and at the fund that I work for. But in terms of it being widely implemented within corporations across the country immediately to create that productivity boom, it doesn't seem like it's going to happen that quickly. And then you just look at forward PE ratios and they're above dot com levels right now, which is something that for some reason or another doesn't get brought up often enough. I think like something to point out like this doesn't seem sustainable, it's not sustainable.

[Ed Dowd]

And if you do the math, historically when we get to these types of dividend yields on the total stock market, the ten year forward projected returns which we wrote about in February are zero. What that means is if you buy in your 401k, a basket of the S and P right now, including dividends 10 years from now, you're projected to get back to even that means that implies there's a big drawdown in between now and year 10. And that's just, that's happened like clockwork and now it's not a timing tool. It can be like that for another year, but when it happens, it's going to be pretty epic now.

[Marty Bent]

And the other signal that I've been following, the indicator I've been following, is the credit spreads between corporate debt and the Fed's fund rate, which have compressed to levels of complacency that are very worrying as well.

[Ed Dowd]

Yeah, no, we've done the math on that. It's in our report we put out in January on predictions of a deep worldwide recession. We looked at these credit spreads and when you look at them when they're super tight like this, historically they go much wider. This is this. I mean, that's just the math. They're atom. They're like three standard DV or two standard deviations below normal. And we just know how this works. They're going to go. The rubber band goes the other way and it's going to go quick and fast.

[Marty Bent]

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[Ed Dowd]

Well, apparently again, we have to look at polling numbers, but anecdotally people are saying they're leaving the Democrats because they've lost a lot of normal Democrats who aren't high media consumers who just are watching what's going on and hearing some of the people that they thought were friends saying abhorrent things are running center to write. So that needs to show up in the poll numbers because right now it's anecdotal. The worry, of course, is this Charlie Kirk assassination. And Charlie Kirk interviewed me three times. He's a wonderful human being. Personally, I always thought, you know, I'm 58, and I marveled at his communication skills and his ability to create what he did from such a very young age. I mean, he was a phenom in 1819 and he just built something that, you know, quite frankly, I was in awe of. He was quite an individual. And I'm sad that he's gone. But when you step back and analyze this, my biggest fear is that this is the beginning of a divide and conquer strategy. I've said forever that this is a class issue, not us, Left versus right, black versus white, Hispanic, Muslim. This is a class issue and we are at the end of a grand cycle and you need to focus on who's really in charge. And the divide and conquer strategy has been well used throughout the millennium. It's. This is nothing new.

[Marty Bent]

No, it's not. I was told you before we hit record. I think my strategy is that recognize we're in the fog of war and to not make any knee jerk reactions. You know, I did tweet some stuff the day of and the day after, but I think over the weekend took some time to take a step back and recognize what you said. Hey, there's probably some ulterior or in the aftermath, there's going to be ulterior motives to really divide and draw a wedge between people.

[Ed Dowd]

Yeah, there's going to be all sorts of narratives that are spun out of this. And the key to Focus on is whatever narrative is coming out. If it's about dividing, ignore it. And remember, this is a class issue. And when I say class, I'm not talking about someone with $10 million. I'm talking about the oligarchs, the super ultra wealthy, the, you know, the, the uber.01% that control the lion's share of the wealth of the globe.

[Marty Bent]

Yeah, it's funny how easy people are riled up and we forget. I mean, especially not to, I mean, Covid. I think the implications of the aftermath of COVID Reaction to Covid, I think ended probably, I would say 2023, but 2023, really? So we're not too far after that and people are getting spun up into another mass psychosis right now.

[Ed Dowd]

Absolutely. And here's the other thing, people, I mean, look, we stopped doing a lot of new Covid research at the end of 24 because we did it for free. And free doesn't work as a business model. And you know, the science is now coming out, improving definitively that these vaccines are a disaster. The problem is it was a mass poisoning event. And we're left with the bill and the bill is continued disability increases. We're running around 6 million above where we were pre Covid. When you and I were talking, we were at 3 million. So the damage from the vaccine continues and it's going to cost the country a lot of money. And it's also, you know, I hate to say this, I put out a tweet in 2023 talking about a new concept called volatility, volatility of thought. There's a lot of psychological and psychiatric issues that have been caused by the vaccine that was shown in our UK personal independent payment system where they go, they get down into different claims, Psychiatric claims went off the hook starting in 21, 22, 23. They're just exploding. So there's, there's neurological issues. So we have a, you know, a population that's getting sicker, that also isn't thinking straight.

[Marty Bent]

Yeah, I discussed this with Jessica Rose when she was on a couple of weeks ago, but. And again, haven't been able to verify. Yeah, but it would not shock me at all. I saw one study that was, that was observing the brain, brain matter of people had taken the vaccine and it was essentially the effect that this study showed, I'm going to have to verify it was that people were essentially being lobotomized. It was graying out the front frontal cortex of their brains, which wouldn't shock me at all.

[Ed Dowd]

You know, look the anecdote, look, there's, there's the math, which we've proven something's going on in the population and then there's anecdotes and we all know people that. Not everybody. The good news, it's not everybody, but there's a, we all know people that have changed and they' not thinking straight.

[Marty Bent]

Yeah, well, that gets to another thing we discussed before we hit record last week. There was a lot of very positive momentum toward the direction of getting accountability and letting the public know that these vaccines are, were not safe and effective. Are not safe and effective. With the MAHA hearings on the Hill last Monday. And I was extremely optimistic Monday, Tuesday, after those, those hearings, because it was quite obvious that anybody standing up for the vaccine, that Jake, I forget his last name, the guy from Stanford got his, they mopped the floor with him and the data they brought, the arguments they brought were pretty clear cut and dry to me and I think many others who, even others who were skeptical of the narrative around the COVID vaccine not being safe and effective.

[Ed Dowd]

You know, before the Charlie Kirk assassination. Let's go back a couple weeks. Trump put out that true social statement about Operation Warp Speed maybe not being as great as he thought. That was a huge sea change in the Trump mindset that he was willing to, and that gave me hope that Kennedy had his support. And also the attacks on Kennedy proved to me that they're scared of what he's coming up with behind the scenes. You know, it's hard for us to know what's really going on because, you know, when you're head of hhs, you're not communicating what's going on. So we only had to, like, you know, crumbs to go on, some of which were new MRNA vaccines being approved. But when I saw Kennedy being attacked and the ferocious blitzkrieg against him, that's when I'm like, Bobby's doing the right thing. And then Trump put out that, that, that tweet, then we had the hearings. And I think that Scott, I think the last doctor that presented the other side, his name was Scott, last name Scott, maybe Jake Scott was his name. But he got, like you said, he got wiped, wiped out by everybody else. I was super optimistic that the truth's finally going to start to come out and then, boom, it's gone. No one's talking about it anymore. Charlie Kirk, you know, on Wednesday, the hearings were Monday, Tuesday, Charlie Kirk, and now no one's talking about it. Everyone is enraged about this assassination and I find the timing a little too Convenient, personally.

[Marty Bent]

Do you think? I mean, obviously the momentum in terms of public attention on this topic has waned significantly, understandably so, in the wake of Charlie Kirk. But do you think it's completely stomped out? I mean, there was hearings this morning as well, I believe.

[Ed Dowd]

No, no, it's not because this has happened before. People don't remember, but we were getting a lot of traction in Covid truth about the MRNA vaccines in 2022 and then the Ukraine war started and wiped it off the map. So the COVID story has been wiped off the map a couple of times. But the bad news is the reason it's not going to get wiped off the mat is the damage continues to grow and more and more people are realizing how bad this is. And I think there was a Rasmussen poll that came out recently that 54% of Americans believe that they know somebody's either been injured or died from the COVID vaccine. So we're over, we're over the tipping point now. And that's the sad part of this, is they're not going to be able to get away from the COVID story because the damage continues to steamroll and slowly gather moss.

[Marty Bent]

And it's not only that's Rasmussen poll, it's like people who know people have been injured or died from the vaccine. But I think the other sort of negative externality of the vaccines becoming blatantly obvious to people is the turbo cancer maybe that I don't know if that's considered an injury in these polls, but I think if you look at the rates of colon cancer in men in their 30s, the amount like I know multiple people, some of which got cancer and died within a few months, some that got it and it's already at stage four. And I think it's becoming so big that you can't ignore it.

[Ed Dowd]

And also the, the birth, the birth rate dip, that's a problem that's going to, that's going to continue for a while. Look, I said this years ago and I still believe this, you know, this what happened during COVID with these vaccines, one of the greatest crimes against humanity, you know, and 70, 60, 70% of this country was poisoned to one degree or another. It's a mass poison, not only this.

[Marty Bent]

Country, but yeah, the globe. And I mean, talk about sort of black swan events for the financial could the, if there is accountability and the big pharma companies are held to account. Anthony Fauci is held to account. Like what effect does that have on pharmaceuticals? Obviously it will leak in the media too. Trump and RFK have didn't go as far as to ban advertisements for pharmaceutical drugs on TVs, but they made it so you have to verbally utter every potential side effect which is going to make it very expensive and unlikely that pharma ads actually get on air. But there's gotta be some financial consequences for these companies. But then as you mentioned for the country overall, as we have to take care of the people who've been negatively affected by these vaccines.

[Ed Dowd]

Yeah. So the budget of the Medicare expenses in the US is going to continue to rise. Social Security is saving money because of the death of the older people from COVID and the vaccines. So they're saving money on Social Security. But the disabilities and the continued care of those who are injured is only rising. The implications of a Covid reckoning I think are so scary. And that's why there, it's kind of the elephant in the room and they don't like to talk about it that much is because corporate America would be liable. Fortune 500 companies mandated this. So it's not just pharmaceutical industry, it's a lot of people. So they're very hesitant to open up the floodgates of litigation because it would cripple the economy. And I said that Pre Trump election 2024 that my biggest fear is that they try to memory hold this because there's so many vested interests that don't want to talk about this because it's just a giant mess that has huge economic implications.

[Marty Bent]

That's what I'm just thinking through that. You think there's, I don't want to laugh because it's not funny, but the only solution, like open the floodgates and say hey, we fucked up crime against humanity, poisoned tens of millions of Americans, half the country, 60% of the country. But you're not allowed to sue these companies because it would cripple the economy.

[Ed Dowd]

They could try that. I don't think it'll work. I think the problem is this isn't going away and there's a reckoning coming and I don't know when. And I think you and I have been shocked. The, you know, this, this vaccine should have been pulled in February of 2021 on the VAERS data alone. I mean we had a swine flu vaccine that killed 25 people and they pulled the freaking thing. The VAERS has got, you know, 16,000 US deaths or even more now and globally like 34,000. And you know, that's, that's an under reporting factor of 40, anywhere from like 20 to 50, let's call it 40. So in the US alone, it's probably 800,000, 1.2 million people dead, who knows? But the point is, and then of course, the disabilities and the injuries, they should have been pulled in February of 21. The signal was there. And then people like me should never exist as a Internet phenomenon. I should not have existed if things were working properly. And here we are, it's 20, 25, and we're still, you know, not having a national conversation about this.

[Marty Bent]

It's absurd, it really is, and I think it's necessary.

[Ed Dowd]

It just goes to show how broken the institutions are across the board.

[Marty Bent]

Yeah, I think whereas Covid, Charlie Kirk, again, fog of war. But I think one thing that's clear is that the institutions, particularly the universities, have indoctrinated a, a generation or part of a generation with overtly Marxist communist views and they've become completely detached from reality to a certain extent. And I think that's exacerbated by the economic situation as well, where people are more willing to go down the path of either radical right or radical left sort of political views because they're not getting any help from the moderates that exist in the system today. And I think across the board, the institutions, pharma, financial, university education, it's become clear that it's completely bankrupt across the board. And that's why when it comes to Covid, the vaccine specifically, if we get accountability, we need the national conversation and a period of it's blatantly obvious that all these institutions are corrupt at their core. We need to do something different.

[Ed Dowd]

Well, the other thing, the reason why we need a national conversation is because there's still so many people who don't know why they're sick. And if you don't know why you're sick, you can't treat it. I mean, there are protocols to clean up the spike protein. I don't know which ones are the best. I'm not a doctor. But if you don't know what's causing your ailment and you can't take proactive action, you're going to go to the doctor and go, I got this, I got that. And they're going to give you more pharmaceutical drugs to hide the symptoms rather than fear. And, you know, I'm a hopeful person. I believe that the bodies of, you know, God gave us this body. It's very resilient and I think people were aware of what was going on. They could heal themselves.

[Marty Bent]

Yeah, I completely agree. How are you positioning yourself? Obviously you talked about 30 year treasuries through the, the ugly duckling in the pond that nobody.

[Ed Dowd]

30, 30 years are for. For people that would be like a, you know, an institutional client that likes to speculate. The average Joe should be in 3 month T bills just waiting to buy, you know, cash equivalents, you know, the average Joe should be just raised. I've been saying this the last two years. Fortunately I was early like Warren Buffett. But have some dry powder in your portfolio to take advantage of bargains when they come and don't be over levered. I, you know, I had a, I had a consultation, I do some consulting on the phone and somebody who's a real estate investor asked me what I thought and I said well what's your leverage profile look like? You've got a lot of rental property income. He's like I don't have any leverage. And I said that's fabulous and you should probably think of relevering in the bottom of this market and expand your empire. And he was like that's a good idea. If you have leverage, reduce it. If you have a portfolio, raise some cash. I'm not going to tell you, you know, I'm not going to tell you to get out of everything. It's up to you. And if you don't have gold, get some.

[Marty Bent]

Yeah. And so with tricolor going down, where, where should we be looking next to the knock on effects from that, if that's.

[Ed Dowd]

Well, the banks have been extending and pretending they've been hiding the commercial real estate losses. The Fed put out a statement about that. In November of 2024 the New York Fed did a report saying the banks are extending and pretending. So there's huge losses on the bank's books right now. The Federal Reserve came in. People forget this but in 2023 we had a duration problem meaning everybody's bank bond portfolio was underwater because they raised interest rates and there was a deposit of flight. The Fed came in and lent money to the banks against their losses and shored up the system that was duration, interest rate risk. What they're not going to do is lend money to banks to bail them out of credit risk. And the credit part of the cycle is coming. This tricolor is probably going to set off a knock on effect. It'll start slowly. It's already been going on behind the scenes. I think Japan has issues so that's a black swan. I bet none of us can predict. Japan goes tits up. They're in trouble. They have a currency crisis brewing. I follow this guy on Twitter who said that bank of Japan has been doing interventions every night for the last 45 days. We got issues and there's a lot of insolvent banks. And the question is, when do the credit markets care? And I think they're going to start caring soon.

[Marty Bent]

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[Ed Dowd]

I think banks hold mortgages on their balance sheet because they got higher yields than Treasury. So there might be some issues. Definitely there'll be some regional bank issues. The big banks will gobble them up. It's the shadow banking system. These private credit funds, private equity. I think Melanie was saying that there's a lot of different lenders that stepped up. Those are the ones that are going to go. But the problem is the banks are exposed to them because they lend to them. So let's say you're a private credit fund. Where do you get your leverage? You get it from a bank. So the banks are on the hook. They're just not as direct as they were last time.

[Marty Bent]

So they'll just have to assume those assets. Right?

[Ed Dowd]

Yeah. I mean, so it's an indirect problem.

[Marty Bent]

Yeah, it definitely feels like, weird. So there's a lot going on. You mentioned the, the numerology of the markets before we hit record. A bit demonic. Approaching 6666 on the S and P. And just when you consider everything that's going on, not only economically with the employment numbers, inflation slowing down, the PE ratios that we're seeing, but socially with Charlie Kirk, the COVID vaccines are just. I, we've talked about this before and I feel very comfortable talking about it with you. I mean, it feels very clear that we're in a spiritual battle right now. I actually wrote a newsletter about it last night. And I think while a lot of our discussions and many other discussions I have in the show focus on the data and sort of policy decisions, I think many people need to begin thinking more spiritually, like, what are we actually doing here? And what type of world do we want to live in? I don't think you can solve the problems by manipulating policy and trying to push the data one way or another. I think we have to have a sort of societal confrontation with what we're doing as a society.

[Ed Dowd]

Yeah, look, there's cycles. You mentioned spiritual battle. There is. I mean, there, you know, the secular. Secular secularism of this country, which started in the 60s and is with us now. People don't have an inner compass anymore, and their idea of what's wrong and right has been distorted. And, you know, let's be. Let's be honest. The intelligence agencies have been working this, like, you know, to the best of their ability. We got rid of the Smith Mundt act under Obama. Said we as a country, we've been propagandized. Media doesn't tell the truth, and they're not on the hook for it. We have literally, the media is an apparatus of the government, and we know about Operation Mockingbird. And to think that went away, you got to be naive. And if you believe most of anything that comes out of the media, I don't know what to tell you. And also, we have to be very leery of the alternative media because you don't think the CIA has figured out a way to infiltrate that and get control? And we, you know, and there's been scandals lately of big influencers getting paid to promote stuff. So there's, you know, I'm currently not paid by anyone to promote anything. I'm just, you know, trying to, you know, I get paid by selling my economic research. I don't get paid by telling you how to vote or think about something. I'm just giving my raw opinion. But there's a lot of influencers out there that are getting paid.

[Marty Bent]

I'm getting paid, but by advertisers to push Bitcoin products.

[Ed Dowd]

Yeah, that's called sponsorship. You're not getting paid to push a tweet on India or Coke.

[Marty Bent]

No.

[Ed Dowd]

And not disclose it. It's about disclosure. Yeah.

[Marty Bent]

And that's the. I mean, obviously, fog of war. But this whole Bill ackman Hampton story, B.B. netanyahu trying to pay media organizations and influencers to talk a certain way about Israel, it's very clear. That's definitely happening in alternative independent media. I mean, if you're just, if you have more than two brain cells and you're aware, you just.

[Ed Dowd]

Yeah, yeah.

[Marty Bent]

Look at the, the road shows that some people go on and the, the shows that they'll go on, on that road show and they're turn out to be the same.

[Ed Dowd]

Oh yeah, no, this is, we're in the fog of war and just step again. I like yourself, was a very emotional the first two days and I made a point of not saying what I actually how I felt. And so it's called about having some discernment and self control. But when you feel yourself enraged or emotional, step back, realize, you know, this is, this is what they want. They want you to think emotionally and just come back to the 30,000 foot view. This is a class issue. That's it. And when you think that way and you say, what do I have in common with an oligarch worth $100 billion? Absolutely nothing.

[Marty Bent]

And that's again, this is rhyming with the conversation I had with Jessica. If and when, when the next economic crisis materialize, I think that's going to be really, that's going to determine obviously where we go for decades. But in 2008 it was bail out the boomers and screw the millennials and all that. But I think this time around it's going to be the decision, do we bail out the boomers yet again or do we give the millennials and the zoomers a chance to actually do something with their lives and build wealth?

[Ed Dowd]

Well, the other thing is historically there's precedents for this. If you look when wealth gaps like this get created and they take a long time to manifest and we're at one now, they're settled one of two ways. There's an existential threat to the owners of the wealth like the French Revolution, or there is a reset like the Great Depression and the big New Deal. The New Deal economics, they share again with the middle class. Those are the only two options you have. So it's going to be interesting to see how they go. I think it should be very interesting for people to understand why do they want to create a digital control grid system? Because they want to avoid the French Revolution and they want to probably not give you a good New Deal. So this whole digital currency thing, palantir24.7 surveillance and the obsession with that, that is a real thing and they probably don't want to give us a New Deal is my guess. And they're racing to get that system in place. And that's why you have to resist any kind of calls for. Like yourself, Pambon, you talk about hate speech, which is. Charlie Kirk said that was nonsense. Anything that curtails our speech. No. Anything that gives us less choice and options, like digital currencies. No. I'm a freedom loving individual and I know it's coming and they're going to try. These people cannot admit that the system is. That they screwed it up and then the collapse. They're going to blame everybody but themselves and try to control and take everything.

[Marty Bent]

But Ed, Alex Karp stood up in LA last week at the all in Summit and promised us that Palantir is not surveilling or spying on individual American citizens. It will never do that.

[Ed Dowd]

I don't believe that for a second. We have them on record saying crazy things. And these people, you got to remember these people live in bubbles and they all talk amongst each other and they're super wealthy and they think it's a chess game. They really do.

[Marty Bent]

Yeah, well, and it's just like I was sitting there and I was watching that. I was like, for a second I was like, oh, wow, maybe I misunderstood Palantir. And then it's like, wait a second, you, like literally use metadata to track and identify and then ultimately target people with attacks. How can you do that without surveilling people? And it's, it's like blatant in your face, gaslighting, if you will. And I think Palantir, I mean, this is, I've talked about this with Whitney Webb and she gets a lot of backlash for it. But you have sex to the right, which I'm, I sort of sympathize with to a certain degree. Like in terms of, you got to be optimistic, can't always be dooming. But if you look at the PayPal, Palantir, Tesla mafia that is now sort of in control in terms of the influential cognoscenti behind the Trump administration from the tech sector. They're not really working on things that give us more freedom at the end of the day.

[Ed Dowd]

No, they're not. And look, I'm not in the black pill community. I think there's always hope, but there's also such grand systemic cycle, things out of our control going on that, you know, you do what you can, but, you know, also build. You know, I was talking to Katherine Austin Fitz met her in Maui a couple weeks ago and you know, I agree with her. Build. And I said this years ago. Build, build new systems. Build, build new Communities and like you're doing and you know, just kind of don't get too, you know, freaked out by what's going on that you can't control. Try to control what you can.

[Marty Bent]

No, I really appreciate Catherine. I've never had her on the show. I know she's highly skeptical of bitcoin and thinks it's a CIA project. It's unfortunate to me that she does because I think I could sit down with her for an hour and sort of walk her through how it's pretty obvious that it's not. She would be a bitcoin advocate, but that's why I do what I do. It's like we need to create these opt out options for people to escape the system that they're trying to trap you in. That's one of those.

[Ed Dowd]

And I think she talked about a currency that I talked about a couple years ago. But the currency of personal relationships will become more important in trust and integrity in a world where that seems to be lacking quite a bit. And surround yourself with people that you can trust and like that have the same values. And you know, my friend group is pretty well vetted, so no one would say anything stupid about Charlie Kirk. But if I said openly on Twitter that any acquaintance says anything stupid like that, you know, I'm not going to, I'm not going to like scream at him just to say, look, I can no longer associate with you. Just kind of quietly walk away. You know, you don't give it energy. You just, you just don't give it zero energy. Like you're no longer worthy of my interactions.

[Marty Bent]

Not I, I said that an hour ago on Rabbit Hole recap the show. I just did that. Like that's, I think, to your point of recognize we're in the fog of war. Recognize they're trying to divide, to divide us. Because that you're not giving your energy to those people because that's what the evil side feeds off of, is that negative react.

[Ed Dowd]

Yeah, you don't want to yell at them. You don't want to, you don't want, you don't want to hurt them. But you just, you just, you zero energy. And that's how you stop this. They want energy. The people that are angry want you to engage with them. They want to argue, they want to yell at you. But if you ignore, nothing hurts these people more than being ignored.

[Marty Bent]

Develop the courage to ignore. Ed, thank you for coming back on the show. I think timely week for an update with Ed Dowd. So I appreciate your time and yeah, stay frosty out there, everybody. It seems like, I mean, it doesn't seem, it's very obvious that things are crescendoing to I think, some singularity at some point in the future. And it's going to involve many things, financial, social, liberty oriented things. So I think keep a clear mind.

[Ed Dowd]

Thank you for having me on. And Marty, great to be here. All right.

[Marty Bent]

Peace and love, freaks. Thank you for listening to this episode of tftc. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. Also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can, leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that $5 a month get you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time and until next time.

[Ed Dowd]

Again.