As the stock market appears to be taking a break from setting new highs, an analyst who correctly predicted the 2008 financial crash warned of a bubble brewing in overall household wealth. Jesse Colombo, an analyst at Clarity Financial, pulled no punches flatly stating “The U.S. household wealth boom since the Great Recession is a sham, a farce and a gigantic lie that is tricking everyone into believing that happy days are here again even though the engines that are driving it are bubbles that are going to burst and cause a crisis that will be even worse than the 2008 crash.” Data this summer showed that household wealth topped $100 trillion for the first time, far outpacing the rate of economic expansion. Colombo contends that wealth that gallops past economic growth is a “telltale sign that the boom is artificial and unsustainable.” The last two times the share of household-wealth growth peaked above gross domestic product was during the late 1990s dot-com bubble and the mid-2000 housing bubble, he notes.
The Everything Bubble
| October 22, 2018