A Framework For Understanding Equity Market Bubbles
In Section II, Jonathan presents a new indicator that investors can use to track the odds of bubble formation in real time and shows how it fits into a larger framework that accurately explains US bear market severity over the past century. The US equity market is not in a bubble today, but it is meaningfully overvalued. Investors should expect a relatively severe cumulative loss from equities in a recession scenario.
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The Bank Credit Analyst has been published continuously since 1949, covering developments in the US and global economy, with a focus on inflation, debt, and policy trends in order to generate investment advice.
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