The last two days have seen the US stock market open down, only to end up. The rollercoaster ride is attributed to coincide with the earnings report season, Russian threats at the border of Ukraine, and the threat of tighter monetary policy from the Fed. One financial guru, Jeremy Grantham, is calling it a “super bubble”. (See the Guardian article.)
But how many times have we been told that the bubble must burst, and it’s about to do it any moment now? As an economist I am often asked if it’s a bubble, and when will it burst. I usually say yes, and anytime now. And I’ve never been right. I didn’t predict the tech crash of 2000 and I didn’t predict the mortgage based crash of 2008. I sure didn’t predict the pandemic, and when the next crash happens, I’ll be the first to admit I didn’t predict it.
My gut says this all has to come crashing down at some point. But that prediction feels similar to me declaring that the sun will rise again tomorrow morning – but without the accurate timing.
See you on the other side.