Source: Reuters article and Jeremy Grantham
More and more prominent public figures are speaking up about the looming market crash that we have foreseen for a long time.
The latest example comes from today´s Reuters interview piece where GMO´s Grantham shares his thoughts on the pending market fall.
In the article, it states: “This is a more dangerous looking moment in global economics than even the madness of the housing bubble of 2007,” Grantham, co-founder and chief strategist of asset manager GMO, told the Reuters Global Markets Forum (GMF).
Furthermore, he says in the interview that “Financial markets should brace for further pain, with global economic health at its most precarious level in years, due to stubborn inflation, hawkish central banks, and geopolitical tensions.
He explains that pockets with highly overvalued assets which he calls “Superbubbles” already peaked last year.
“Markets will now have to cope with valuations of “hyper-inflated” growth stocks collapsing, inflation and potential turmoil in the global housing markets, as rising interest rates put pressure on homeowners”.
“The deterioration in fundamentals on a global basis looks absolutely shocking.”
We at Nranalysis have rung the doom bell for a long time now for the scenario where the markets hit a spiraling downturn for the very very worse. In fact, our head analyst who is an expert in DeMark Indicators™ has sounded the alarm countless times when the bullish trend continues.
He has laid out the roadmap for the near future into the next year and it looks devastating indeed. For how long can the buying frenzy last before it collapses?
“Economic and market turmoil will likely test global central banks’ resolve to combat inflation through monetary policy tightening”, Grantham said.
“(Central banks) will be spooked, they’ll do what they can, maybe.”
The Reuters interview points out that Mr. Jeremy Grantham thinks, based on the current trendline, the S&P 500 could be trading around 3000 points in a year from current 3979, though does note it could easily head “decently lower”.
He continues with: “Inflationary pressures are likely to be persistent, owing to climate change-related economic disruptions, a shrinking global workforce, and limited commodity resources.”
That will put further pressure on equity returns, he noted.
“People forget to adjust the S&P for inflation … your assets are worth 9% because of inflation in the last year.”
“That makes a marginal bear market a fairly serious bear market,” Grantham said.
Our head analyst says: “The big 50% drop next year is set regardless of path #spx2500”