The U.S. stock market is significantly overvalued, warns GMO asset management co-founder and investor Jeremy Grantham, known for his ability to pinpoint such bubbles. He predicted the collapses of 2000 and 2008, reports RBC. According to his estimation, the recovery on the American stock markets, observed in June-August, demonstrates a typical pattern of short-term growth in a bear market, which is followed by a collapse. Such a surge usually precedes serious problems in the economy.

Before a major bubble deflates, the market rebounds first, as it did in the first half of this year, followed by a small rebound, explained the investor. After that the major indices collapse and the market bottoms. The expert pointed out that the positive dynamics of the U.S. stock market last week were misinterpreted by players, who thought the market had turned bullish - in fact, this did not happen.

The investor warned a year ago that a "grand bubble" had formed on the U.S. stock market.