Ed Dowd: 'Kooky' Valuations & Weak Economy To Lead To Big Downturn By Midterm Elections

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Jan 13, 2026

In this insightful conversation, Ed Dowd, founder of Phinance Technologies, delves into the potential for a significant market downturn by 2026 due to 'kooky' valuations and economic weakness. He discusses the housing market's overvaluation, critiquing current policies aimed at propping it up. Dowd also examines geopolitical shifts, China's risky growth outlook, and the likely impacts on global trade. With warnings on tech valuations and labor market stress, he suggests necessary adjustments for future stability.

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INSIGHT

AI CapEx May Be Peaking

AI data-center buildout may have peaked because power, not chips, is now the constraint.
This suggests AI-driven CapEx tailwinds could slow or roll over in the near term.

INSIGHT

China Faces Acute Real-Estate Pain

China's real estate and fixed-investment dynamics risk turning acute in 2026 and could push GDP negative.
That would export disinflation and slow global trade and commodity demand.

INSIGHT

China Exporting Deflation

China is already exporting deflation and that force will intensify as its domestic cycle worsens.
Global disinflationary pressures will weigh on commodities and growth in 2026.

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Change around the world, especially geopolitically, is accelerating as we enter 2026.Depending on your point of view, some of these changes are positive -- potentially historically great even.Some of them are much more concerning.Where is the world order headed from here? And more granularly, how are the economy and financial markets likely to perform in 2026?For insight, we're fortunate to welcome back to the program Edward Dowd, founder of macroeconomic consulting & research firm Phinance Technologies.Ed predicts that 'kooky' valuations and growing economic weakness will lead to a market correction & recession by the midterm elections.

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