Grantham is the founder of GMO, a firm that manages $118 billion. He’s widely respected for warning about the 2000 market crash and the 2008 financial crisis.
Although most large money managers will tell you to always be in the market (which means you will always pay them fees), Grantham is willing to speak his mind, even if that means telling people to get out of the market.
Grantham just made another bold call. He thinks the US market is “ripe for a major decline” in 2016. He says it could spark the worst crisis since the Great Depression. The Financial Times explains:
The famously bearish and often prescient money manager said this could trigger a “very different” type of crisis, because many governments had become considerably more indebted and much of the liabilities had shifted to the balance sheets of central banks.
Given that central banks were able to create money to recapitalize themselves, this “could be a crisis we could weather,” Mr Grantham said. “If not, then we’re talking the 1930s, where you have a chain-link of government defaults.”