A legendary wolf of Wall Street anticipates a tragedy in the markets

In the semblance of one of Wall Street’s most famous wolves, the “super bubble” is dangerously nearing its final act after the recent rally in US stocks lured some investors into the market just before a potential tragedy. In good romance, the worst is yet to come. think so Jeremy Granhamthe legendary co-founder of investment manager Grantham, Mayo & van Otterloo (OMG), who has repeatedly warned investors of a bubble in the markets. He recently said in an article that “superbubbles are events like no other” and share some common characteristics.

“One of those features is the bounce back into the bear market after the initial stage of correction, but before the economy has clearly started to deteriorate, as it always does when super-bubbles burst,” he said. Grantham. “This phase, in all three cases above, used a rebound in which more than half of the market’s losses were recovered, luring in unsuspecting investors just in time for the market to turn lower again, only more viciously, and with a weakening economy. So far this summer’s rally (in the northern hemisphere) has fit that pattern perfectly.”

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