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Cailianshe News, July 22 (Editor: Huang Junzhi)Wall Street's most bearish hedgefundOne of the managers, who is good at profiting from tail risks,Black Swan EventThe founder of the fund said recently that the United Statesstock marketAs stocks head toward a historic sell-off, he again appeals to those who have invested heavily in the artificial intelligence boom.US stocksInvestors, satisfied with steady gains, are issuing extremely pessimistic warnings.

In a recent interview, Mark Spitznagel, founder of the Black Swan Fund Universa Investments, said,The years-long rebound in the U.S. stock market is equivalent to "the biggest bubble in human history."

He pointed to similarities with the dot-com bubble, when investors poured money intoTechnology stocks, then the frenzy subsided,NasdaqIndex in 2000Crash。

“You don’t feel like a fool for taking a bearish view,” he added.

Spitznagel, a former trader and protégé of Nassim Nicholas Taleb, author of the 2007 bestseller “The Black Swan,” made billions during the 2008 stock market crash, the 2015 flash crash and the coronavirus outbreak in early 2020.

Over the past week, the US stock market has continued to fall, with both the Nasdaq and S&P 500 recording their biggest weekly declines since April. Currently, the market needs to assess the impact of many factors, including the Federal Reserve, earnings season, and the progress of the US election. Biden's announcement of his formal withdrawal from the US presidential election has also injected more uncertainty into the market outlook at this critical moment.

Glen Smith, chief investment officer at GDS Wealth Management, said the stock market is undergoing a long-overdue rotation, with investors moving money out of large technology stocks and into other areas of the market.

The impact could be even more extreme

Spitznagel further warned that the impact of this bubble and its burst will be more extreme because the government's $34 trillion debt will make it more difficult for the Federal Reserve to turn the economy around in time to avoid a recession.

He noted that the current rally could continue for several months as inflation continues to retreat and the Federal Reserve eases monetary policy, but added thatU.S. stocks could quickly lose more than half their value in the ensuing sell-off.

In short, Spitznagel said the market situation is a "giant tinderbox time bomb."

“I think we’re heading towards something very, very bad,” he said.

This is not the first time Spitznagel has issued such a warning; he has been warning of an economic collapse since January 2023.But he said this time the timeline of the impending crisis was now clearer and a recession could occur before the end of the year.

He has also previously warned that the S&P 500 is expected to suffer the worst stock market crash since the Great Depression of 1929 after it breaks 6,000 for the first time. He said, "Investor euphoria will reach its peak, and the subsequent market collapse will be worse than the global financial crisis."