Billionaire WARNS: “A 70% Crash Has Already Started”

The man who called the 1989 Japan bubble, the 2000 dot-com collapse, and the 2007 housing crash just called this one too. And he says nobody selling you investment advice will ever tell you the truth about it.

Jeremy Grantham has been right before. That is the part that should stop you scrolling.

The 87-year-old co-founder of Boston-based GMO built his reputation over six decades by seeing bubbles before they burst and saying so publicly, even when it cost him. He avoided Japanese equities before the 1989 collapse that erased the Nikkei for 35 years. He warned clients out of dot-com stocks in 1998 and 1999, two years before the crash, and lost half his firm’s assets under management in the process because clients left for managers still riding the mania higher. He called the 2007 housing bubble before it broke the global financial system. At his firm’s peak in 2007, GMO managed roughly $155 billion in assets; Grantham himself has cited a figure of $165 billion at GMO’s height, and the firm still runs about $85 billion today.

Now, in a wide-ranging interview on The Diary of a CEO with Steven Bartlett, Grantham says the artificial intelligence boom has produced “the biggest investment bubble in American history,” and that a 70 percent decline in the stocks that have flown highest “would not be unexpected.”

This is not a fringe call. This is the same voice that has been right, at scale, three times before.

Grantham’s argument is not that AI is fake or worthless. It is closer to the opposite: AI is real, it will change everything, and that is exactly why it has produced a bubble. “The great bubbles always occur around the very most important ideas,” he told Bartlett. Railroads changed the world and still collapsed as stocks. The internet changed the world and the NASDAQ still fell 82 percent after the 2000 peak, with Amazon alone dropping 92 percent before it went on to dominate retail.

He places today’s US market at 35 to 40 times earnings, in the same territory as the 2000 peak. For comparison, Japan’s market hit 65 times earnings in 1989, at a moment when Japan briefly sold for more than the entire US stock market. It then fell for two decades. It took 35 years for Japanese stocks to fully recover.

Grantham singles out SpaceX as the clearest symptom of the mania: a company that, in his telling, defines its addressable market as a quarter of global GDP and talks about mining asteroids. “It’s a fabulous BS story,” he said, adding that in fifty or a hundred years people will tell stories about SpaceX’s prospectus the way they now tell stories about the South Sea Bubble. He discloses he is an investor in the company himself, calling it “such a fabulous BS story” even as he holds a position in it, which tells you something about how bubbles actually work: even the people who see them clearly do not always get out.

Here is the part that should make every retail investor in this country uncomfortable. Grantham says the entire financial advisory industry is structurally incapable of warning you.

“You will not receive this advice from investment advisers to get your tail out of the market, ever,” he said. “From 1929 onwards, the Goldman Sachs of the world have never said to you, get out of the market, it’s overpriced. Never.”

He is not speculating. At the peak of the dot-com run-up in the late 1990s, Grantham polled roughly 400 self-identified stock market experts at an industry conference. Every one of them agreed that if the market returned to a historically normal valuation, it would guarantee a major bear market. Ninety-nine percent thought it would happen. And on the same stage, representatives of the same firms whose own analysts believed a crash was coming were telling the public everything would be fine. Grantham calls it what it was: “a huge betrayal of trust.”

The incentive has not changed. A financial advisor who tells clients to leave an overheating market and turns out to be early, as Grantham was in 1998, loses business immediately. A financial advisor who rides the mania up loses nothing until the crash actually happens, and by then everyone is losing money together, which somehow gets treated as more forgivable than being right alone.

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Grantham’s forecast is not abstract. It has a mechanism, and the mechanism runs straight through the paychecks and home equity of ordinary Americans.

Layoffs. He expects the highest-flying companies, the ones that led the bubble up, to lead the layoffs down. As portfolios shrink, the wealth effect that made people feel richer and spend more reverses. People feel poorer, spend less, and the broader economy slows.

A tougher labor market for younger workers. Grantham points to Japan, where the number of 20-year-olds is now half of what it was in 1948, and connects a shrinking pool of young entrants to a market and an economy that struggles to regenerate itself.

Housing that is already unaffordable getting worse before it gets better. Grantham argues housing has been allowed to appreciate for 30 years in a way it never did historically, and he expects prices to fall, not because that is good news, but because family formation is already declining and fewer buyers are competing for homes priced for a market that assumed endless demand.

This is the part your financial advisor will not walk you through, because walking you through it means admitting the bubble exists.

Grantham’s warning lands inside an economy that is already the most unequal it has been in a century. This is not his opinion. It is Federal Reserve data.

As of the most recent readings from the Fed’s Distributional Financial Accounts, the top 1 percent of US households holds roughly 31 to 32 percent of the country’s entire net worth, the highest share on record since the data series began in 1989. The bottom half of American households, by contrast, holds about 2.5 percent of the nation’s wealth. Since 1989, every wealth group below the top 1 percent has lost ground, while the top 0.1 percent alone has grown its share by nearly 70 percent, from 8.6 percent of national wealth in 1989 to 14.5 percent today.

Grantham’s framing is blunt: from 1935 to 1975, under a more redistributive tax structure, the US saw broad-based growth where the poorest quarter of Americans actually gained ground faster than the average. Since 1975, average inflation-adjusted wages have barely moved while wealth concentrated at the top. He points out, correctly, that historically extreme wealth concentration rarely gets resolved through gentle policy. It tends to break through civil collapse, war, or revolution. He would clearly prefer the fourth option: a society that chooses, deliberately, to change course before it is forced to.

That is the opening this movement exists to walk through. But first, the part of this story that gets almost no coverage at all.

Everything above is what happens to your money. This is what is happening to your family, and it’s arguably the more urgent story, because unlike a stock portfolio, it cannot be rebuilt once the damage is done.

Grantham has spent nearly three decades funding research into this, separate from his investing career, through the Grantham Foundation for the Protection of the Environment. He points to the work of Dr. Shanna Swan, a reproductive epidemiologist at the Icahn School of Medicine at Mount Sinai, whose research found that total sperm count among men in Western countries fell nearly 60 percent between 1973 and 2011, with the rate of decline accelerating rather than slowing. Extended forward, Swan’s own modeling puts the median male sperm count on a path toward zero by 2045, meaning half of men would be functionally infertile without medical help.

That is not a fringe claim from a finance podcast. It is a peer-reviewed epidemiologist’s data, and Swan has been explicit that if the current trend line holds, “the median sperm count would be zero” on the current trajectory, a threshold she calls “a global existential crisis.”

Grantham links this directly to a class of chemicals called endocrine disruptors: phthalates in cosmetics and food packaging, BPA in plastics and thermal receipts, PFAS “forever chemicals” in nonstick cookware and rain gear, and pesticides like atrazine, still the second most widely used herbicide in the United States despite being banned in the European Union for over two decades. He is not the only one raising the alarm. A May 2024 University of New Mexico study published in the journal Toxicological Sciences found microplastics in 100 percent of the 23 human testicular tissue samples analyzed, at concentrations nearly three times higher than in the canine samples tested alongside them, with higher plastic concentrations correlated to lower sperm counts.

If you are trying to start a family in America right now and it has been harder than you expected, this is not just in your head, and it is not just about waiting too long. The World Health Organization now estimates roughly 17 percent of couples need medical help conceiving, up from near zero just fifteen to twenty years ago.

Here is the piece that should make every reader based in the US sit up: this is regional, and the US is losing on purpose.

Grantham lays out the regulatory gap in stark terms, and independent comparisons of the two regulatory regimes back him up.

The EU’s Cosmetics Regulation bans or restricts more than 1,300 ingredients for toxicity, carcinogenicity, or hormone disruption. The FDA, by its own account, has banned 11. On pesticides, the gap is just as wide: atrazine, the second most widely used herbicide in the United States, with an estimated 70 to 80 million pounds applied to US crops each year, has been banned across the European Union since 2004 over groundwater contamination and endocrine-disruption concerns. It remains legal, and widely detected in Midwest drinking water, in the US today.

That gap shows up in a number Grantham calls the clearest measure of civilization there is: how many mothers die giving birth. According to the CDC’s most recent data, the US maternal mortality rate stood at 18.6 deaths per 100,000 live births in 2023, higher than the large majority of high-income countries. By comparison, the Commonwealth Fund’s international analysis puts the UK at roughly 13.4 per 100,000 and notes that Norway, Ireland, Switzerland, and Italy all report fewer than three deaths per 100,000, meaning the US rate runs six times higher or more than several of its peer democracies. For Black women in the US, the rate is 50.3 per 100,000, roughly three and a half times higher than for white women. Louisiana’s maternal mortality rate, at 41.9 per 100,000, sits between Mexico’s and the Seychelles’. California’s, at 9.5, sits between Canada’s and Kazakhstan’s. The same country contains both outcomes, depending entirely on which state you’re standing in.

Grantham’s diagnosis is not that Americans are doing something wrong individually. It’s that the systems meant to protect families, from chemical regulation to maternal care, have been allowed to erode while the people positioned to demand better have had no real, ongoing mechanism to make that demand heard between elections.

That is where this movement picks up the thread.