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Jeremy Grantham Warns ‘Super Bubble’ in Stocks Has Yet to Burst

GMO's co-founder says overvalued equities, bonds and housing will collide with high rates and inflation to cause more pain.

Bloomberg business news
Jeremy Grantham Warns Stock ‘Super Bubble’ Has Yet to Burst
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Famed investor Jeremy Grantham said the “super bubble” he previously warned about has yet to pop, even after this year’s turbulence in the US stock market. 

The co-founder of Boston asset manager GMO, known for calling market bubbles, said in a note Wednesday that the surge in US equities from mid-June to mid-August fits the pattern of bear market rallies common after an initial sharp decline — and before the economy truly begins to deteriorate. Grantham, 83, sees more trouble ahead because of a “dangerous mix” of overvalued stocks, bonds and housing, combined with a commodity shock and hawkishness from the Federal Reserve.