Skip to main content

‘A Dangerous Looking Moment in Global Economics’ — Veteran Investor Jeremy Grantham Warns S&P 500 Could Plunge Another 26%

'A Dangerous Looking Moment in Global Economics' — Veteran Investor Jeremy Grantham Warns S&P 500 Could Plunge Another 26%

Jeremy Grantham, the co-founder of the Boston-based asset management firm Grantham, Mayo, & van Otterloo (GMO) believes Standard and Poor’s 500 (S&P 500) could drop another 26% during the next 12 months, according to statements the veteran investor made last week. The GMO co-founder detailed his bearish sentiment by mentioning he’s shorting junk bonds and the Nasdaq Composite as well.

GMO Co-Founder Says ‘Deterioration in Fundamentals’ Is Shocking — ‘Central Banks Will Be Spooked, They’ll Do What They Can, Maybe’

The investor and GMO co-founder Jeremy Grantham’s stock market outlook is gloomy, and last Wednesday he told the Reuters Global Markets Forum that things could be far worse than the subprime mortgage fiasco 15 years ago. “This is a more dangerous looking moment in global economics than even the madness of the housing bubble of 2007,” Grantham opined during the Reuters event. Grantham is a well known investor and entrepreneur on Wall Street, as he started one of the first index funds in the early seventies.

In December 2020, GMO managed $65 billion in assets under management (AUM) and in recent times, Grantham has been a vocal critic of the world’s economic blunders. Grantham also had a lot to say during the 2007-2010 ‘Great Recession,’ in statements concerning Obama economics and the housing bubble that took place at the time. Speaking to the Reuters Global Markets Forum last week, Grantham said the S&P 500 stock market index could drop by 26% in the next year. During the discussion, he explained that he was betting against the Nasdaq Composite and junk bonds as well.

Grantham stressed that pockets of assets with super high valuations, called “superbubbles,” had topped by the end of last year. “The deterioration in fundamentals on a global basis looks absolutely shocking,” Grantham remarked. A year from now, Grantham predicts that the S&P 500 could print values of around 3,000 points, and even be “decently lower.” Reuters reports that inflation is affecting Americans a great deal, and holiday sales in the U.S. are expected to be much less this year.

Furthermore, global reinsurers are blaming inflation and the Ukraine-Russia war on the world’s rising risk protection rates. The legendary investor Grantham said people often forget about calculating inflationary pressures.

“People forget to adjust the S&P for inflation … your assets are worth 9% because of inflation in the last year,” GMO’s chief strategist of assets said. “That makes a marginal bear market a fairly serious bear market,” Grantham added. Grantham joins Michael Burry and other Wall Street gurus who believe a stock market crash is coming.

What do you think about Grantham’s opinion and S&P 500 prediction? Let us know what you think about this subject in the comments section below.



from Bitcoin News https://news.bitcoin.com/a-dangerous-looking-moment-in-global-economics-veteran-investor-jeremy-grantham-warns-sp-500-could-plunge-another-26/
Labels:

Comments

Post a Comment

Popular posts from this blog

Mt Gox Creditors Updated, Trustee Says Rehabilitation Custodian Is ‘Currently Preparing to Make Repayments’

On August 31, 2022, the Mt Gox trustee Nobuaki Kobayashi explained in a recent letter that the rehabilitation custodian is “currently preparing to make repayments” to Mt Gox creditors. Trustee Updates Mt Gox Creditors — Repayment Date and Exchange Still Unknown Last week speculation and rumors concerning the release of 140K bitcoin ( BTC ) from Mt Gox littered social media platforms and headlines. Bitcoin.com News covered the situation six days ago as a number of people and Mt Gox creditors called the rumors “ fake news .” During that same period of time, a bitcoin whale transferred 10,000 BTC to unknown wallets, and a 2018 annotation , heuristics, and clustering methods show the funds likely originated from the June 2011 Mt Gox hacks. Following the mysterious whale transfer, last Wednesday, Mt Gox published an official update from the court trustee Nobuaki Kobayashi that explains the court is “currently preparing to make repayments” to creditors. Mt Gox creditors have been wait...
Post a Comment
Read more

Fidelity Discusses Bitcoin as Portfolio Insurance — Could Soon Stand in ‘Stark Contrast’ to Path Fiat Currencies Take

Fidelity Digital Assets, a subsidiary of Fidelity Investments, says that bitcoin could be considered portfolio insurance. The firm notes that the cryptocurrency “may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank balance sheet expansion.” Fidelity Says Bitcoin Could Be Portfolio Insurance Fidelity Digital Assets, a subsidiary of Fidelity Investments, recently published a research study titled “The Rising Dollar and Bitcoin.” The research outlines “how bitcoin could be considered portfolio insurance” as the rising dollar impacts global currency markets. “The strengthening U.S. dollar is wreaking havoc among other countries and may put pressure on the Federal Reserve to soon reverse its tightening monetary actions, something that has precedent based on 1985’s Plaza Accord,” Fidelity explained. In addition, “more monetary debasement may be needed to ...
Post a Comment
Read more

Economists Discuss Russia, China Potentially Developing Gold-Backed Currency That Could Undermine US Dollar

Economists have weighed in on reports that China and Russia may be developing a new gold-backed currency that could undermine the U.S. dollar’s status as the world’s primary reserve currency. Russia and China May Be Developing Gold-Backed Currency Several experts have shared their views on Russia and China potentially creating a new gold-baked currency, Fox Business reported Saturday, emphasizing that China has been buying up huge quantities of gold while Russia was forced off the U.S. dollar due to sanctions imposed on the country following its invasion of Ukraine. The news outlet noted that some experts have cautioned that these moves, along with the closer relationship that has developed between Moscow and Beijing, point to the likelihood of China attempting to launch a gold-backed currency. However, neither Russia nor China has officially confirmed plans for such a currency. Craig Singleton, senior fellow at the Foundation for Defense of Democracies and a former U.S. diplomat,...
Post a Comment
Read more