Grantham shared his thoughts on the US economy and the possibility of a recession in a recent conversation with Bloomberg Television. His insights challenge the Federal Reserve's predictions on the trajectory of the US economy
In an interview with WealthTrack on July 1, the British investor said that stocks face a 70 percent risk of crashing in a few years, as there's a bubble forming in asset prices on the verge of implosion.
Grantham’s warning of a deep recession is similar to the views of economist Nouriel Roubini, who recently cautioned investors of a painful stagflation-driven recession for the global economy due to the cold war between the US and China
Grantham suggests that the Federal Reserve's low interest rate policy has fuelled this bubble by making borrowing cheap and driving up asset prices.
In fact, the 84-year-old money manager calculated that the value of the S&P 500 at the end of the year should be about 3,200, he says in a paper out Tuesday.
Next comes the economic decline, and historical parallels suggest this ending in a tragedy, according to his note
GMO added 308,300 American Depository Receipts of ICICI Bank to take its holding to 334,900 ADRs in the December quarter
Carl Icahn, Jeremy Grantham, John Hussman. This is not a list of one of the top money managers of the world. These are investors who have recently warned of an impending stock collapse, predicated upon their expectations of a major economic downturn.