Three Massive Bubbles in 17 Years: When Will This One Bust? A 60% Decline Coming?
The comments above & below is an edited and abridged synopsis of an article by Mish
John Hussman presents a message no one wants to hear, because nearly everyone is too busy believing for the third time in 17 years that “It’s different this time.”
Hussman recently wrote about valuations, sufficient statistics, and breathtaking risks. His most recent post, “Behind the Potemkin Village,” is more of the same.
The markets are so overvalued now that Hussman expects a 60% decline from here. Even if he is only half-right on the duration and strength of the decline, public union pension plans in states like Illinois will be broke.
In his article, Hussman presents a total of seven charts to make a compelling case.
Most people ignore Hussman because they don’t like his message. It’s certainly not the message Wall Street wants you to hear. Wall Street can repeat its message way more than those in the Hussman camp.
Some know full well the stock market is in a bubble, but they expect they will get out on time. A few might manage. In aggregate, it’s impossible.
Many of Mish’s readers think the Fed won’t allow another major stock market decline. But if the Fed could prevent bubbles from popping, why did we have two crashes already?
No one knows when this bubble will burst, but the bigger the bubble, the louder the pop.