The co-founder of Boston asset manager GMO, known for calling market bubbles, said in a note Wednesday that the surge in US equities from mid-June to mid-August fits the pattern of bear market rallies common after an initial sharp decline — and before the economy truly begins to deteriorate. Grantham, 83, sees more trouble ahead because of a “dangerous mix” of overvalued stocks, bonds and housing, combined with a commodity shock and hawkishness from the Federal Reserve.
"You had a typical bear market rally the other day and people were saying, ‘Oh, it’s a new bull market,” Grantham said in an interview. “That is nonsense.” Grantham became famous spotting and profiting from bubbles in Japan in the late 1980s, tech stocks at the turn of the century and in US housing before the 2008 financial crisis. Some of his other bearish predictions over the years have been wrong — or, at least, too early.
It has fallen so much already!
Housing is the true super bubble
Another 40% decline is expected in stocks.
Bet he has shorted the market heavily and is trying to talk himself into a windfall. No wonder people hate Wall Street.
PermaBear. If you say it for long enough, one day it will be true. Meanwhile, what is the opportunity cost to those who listen to him?
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