Wednesday, January 3, 2018

Tyler Durden — Jeremy Grantham Warns: "Brace Yourself For A Near-Term Melt Up"

Summary of Grantham's guesses (described "absolutely my personal views")
  • A melt-up or end-phase of a bubble within the next 6 months to 2 years is likely, i.e., over 50%.
  • If there is a melt-up, then the odds of a subsequent bubble break or melt-down are very, very high, i.e., over 90%.
  • If there is a market decline following a melt-up, it is quite likely to be a decline of some 50%.
  • If such a decline takes place, I believe the market is very likely (over 2:1) to bounce back up way over the pre 1998 level of 15x, but likely a bit below the average trend of the last 20 years, as the trend slowly works its way back toward the old normal on my “Not with a Bang but a Whimper” flight path.
 Interesting tidbit.
Recently an academic paper titled “Bubbles for Fama” concluded that in the US and almost all global markets, the strongest indicator – stronger than pure pricing or value – was indeed price acceleration.
Zero Hedge
Jeremy Grantham Warns: "Brace Yourself For A Near-Term Melt Up"
Tyler Durden


Matt Franko said...

Remember Warren Buffett’s Statement: “if govt said it was going to keep rates at zero for 50 years the Dow would go to 100,000....”

Matt Franko said...

Rates are still very low .... 90 day Treasuries at 1.4%