Posted on 01/21/2022 5:11:10 PM PST by BenLurkin
Stocks are off to a tough start this year. The tech-heavy Nasdaq is already in a correction, a more than 10% drop.
Jeremy Grantham, co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO) said in a report called "Let the Wild Rumpus Begin" that stocks are now in the midst of a "superbubble," that it won't end well.
He noted that US stocks have experienced two such "superbubbles" before: 1929, a market fall that led to the Great Depression, and again in 2000, when the dot-com bubble burst. He also said the US housing market was a "superbubble" in 2006 and that the 1989 Japanese stock and housing markets were both "superbubbles."
Grantham believes that the Federal Reserve's moves to cut rates to zero -- and then keep them there for nearly two years -- is a main cause for the market's current frothiness. The Fed is widely expected to begin raising rates at its March meeting. "One of the main reasons I deplore superbubbles -- and resent the Fed and other financial authorities for allowing and facilitating them -- is the under-recognized damage that bubbles cause as they deflate and mark down our wealth...To allow bubbles, let alone help them along, is simply bad economic policy..."
Other investing experts share some, but not all, of Grantham's concerns. Jordan Kahn, president and chief investment officer of ACM Funds...isn't as bearish as Grantham. Rather than an epic crash, he foresees a series of what he calls "bubble-ettes," mini manias in corners of the market such as crytpocurrencies and speculative, unprofitable tech stocks.
"There has been a lot of blind faith," Kahn said. "There are areas where there has been a lot of speculation and there will be pain there."
(Excerpt) Read more at cnn.com ...
Is this your own forecast?
It takes a genius to figure that one out? 🙄
To much government printing and spending money drives the markets crazy it’s in a yoyo mode now waiting to see their next move.
“No Idea,,,”
I’m with You but I’d just
Like to Watch this from a
Safe space in what Time left the Good Lord sees fit to give me.
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Hang Tough, Kiddo.
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