The stock market has formed the most extreme bubble in history, which may lead to its sharp collapse. Legendary investor and president of Hussman Investment Trust John Hussman, who predicted the crashes of 2000 and 2008, warned about it, Business Insider reports.

Stock prices now look as overvalued as they did in 1921 and 2021 before the subsequent crashes, the expert said. The U.S. stock market soared to new all-time highs on a wave of player optimism, buoyed by recent confirmation from the Federal Reserve of plans to cut the key rate this year. It's a common pattern for stocks to reach a speculative peak before starting to collapse, the investor reminded.
<br< Earlier this year, Hussman characterized current stock market conditions as among the worst in history, calling the state of the stock market a "cluster of grief." Market conditions are now among the 0.1% most negative seen all time. The losses from the collapse could surpass the collapse of the dot-com bubble - according to the expert, neither he nor his colleagues would be surprised by a 50-65% drop in the S&P 500 and a recession in the US.