The stock market has seen a strong recovery since it nearly plunged into bear market territory in late December.
Experts attribute this renewed strength to the Federal Reserve’s dovish shift in recent weeks — one that’s likely to postpone further rate hikes for the foreseeable future.
John Hussman — the outspoken investor and former professor who’s been predicting a stock collapse — isn’t buying it. He explains why current conditions remind him of the environment right before the last two market crashes.
It’s no secret that John Hussman isn’t exactly a fan of the Federal Reserve.
The former economics professor and renowned market bear has shared choice words about the central bank on multiple occasions before.
His main argument is that the Fed’s monetary easing practices have created unsustainable market conditions. By lowering interest rates to near zero, the central bank made it so companies — even those with questionable credit profiles — could have easy access to debt financing.
Hussman — who is currently president of the Hussman Investment Trust — says the final result has been a “yield-seeking carnival of speculation” that’s pushed valuations to their “most offensive extremes in history.”
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Source:: Businessinsider – Finance