- JPMorgan’s CEO is warning that we’re headed for a stock market collapse similar to the 2008 meltdown.
- One prominent investment strategist believes that we’ll face the greatest liquidity crisis of all time.
As the novel coronavirus strangles the economy, we can expect a chain of bankruptcies.
JPMorgan Chase’s top honcho Jamie Dimon is painting a gloomy economic and stock market outlook.
Dimon is the only current chief executive who navigated a big US bank through the global financial crisis. When Dimon talks, the financial world tends to listen.
Dimon Expects Big Economic Downturn
In a 60 – page letter to investors, JPMorgan’s CEO said that the coronavirus outbreak will ignite a big economic recession . The level of stress will be similar to the crash of 2008. Dimon says,
at a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008.
During the global financial crisis, the S&P. 650 lost nearly 90% of its value from peak to trough. This year, the bellwether index shed over % from the all-time high yet many are already calling a generational bottom.
Raoul Pal, a former Goldman Sachs executive, also believes that the pain for investors is not yet over . In a recent podcast, the founder of Global Macro Investor and Real Vision Group said that
In the interview , Pal says that investors will succumb to the greatest liquidity crisis of all time as the coronavirus pandemic suffocates multiple industries.
I think the balance of probabilities are that this is a much longer event in terms of the economic impacts … And I think it’s going to be the largest insolvency event in all history.
Pal expects many companies to file for bankruptcy as they struggle to find the cash to meet their financial obligations. The series of bankruptcies will likely ignite a severe economic downturn and put tremendous stress on the financial market .
Pal’s expectations align with Jamie Dimon’s outlook. Both expect the stock market to collapse as the novel coronavirus exposes the weaknesses of the U.S. economy .
Instead of buying the dip, these institutional investors are saying to sell every stock market rally.
The opinions expressed in this article do not necessarily reflect the views of CCN.com. The above should not be considered trading advice from CCN.com.
This article was edited by (Sam Bourgi)
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