So that settles it, according to the co-author of the recently released memoir, The Making of a Permabear, written alongside financial historian Edward Chancellor. He\u2019s not a bear \u2014 he\u2019s a dolphin, driven by a powerful streak of idealism, the kind that lets you pursue an uncomfortable truth, call it better than anyone else, and feel quietly satisfied even when no one wants to listen. He calls the whole framework \u201cMyers-Briggs crap,\u201d but admits the data shows it works\u2014which, he notes, is more than you can say for most of the academic models that are supposed to.<\/p>\n
Grantham has earned the right to trust his own instincts over consensus. Over 40 years, he called out the Japanese stock and real estate bubbles before they collapsed at the turn of the 1990s. He called the dotcom bubble before it burst a decade later. And in September 2007, he wrote in these very pages<\/a> that the U.S. housing sector was in \u201cgenuine bubble territory\u201d \u2014 months before that market\u2019s implosion triggered the Great Financial Crisis. As late as August 2007, the Federal Reserve was skeptical<\/a> of such bubble talk, while Grantham was dismissed as a pessimist, a dismissal that soon proved mistaken. <\/p>\n People don\u2019t react well to the bear\u2014or the dolphin\u2014in the room, Grantham said. \u201cIt makes people really angry,\u201d he explained, \u201cbut not uniformly.\u201d The angriest reactions are \u201cwhen things are getting really crazy\u201d in markets, he said, recalling a quarterly letter he wrote in 2021, around the theme of \u201cwaiting for the last dance.\u201d In January 2022, he talked about in a Bloomberg podcast appearance and found the response \u201cballistic and viral, I think is the expression.\u201d It struck a nerve with the Bitcoin crowd, he explained, who are \u201ccrazy as coots,\u201d and three particular comments \u201cwent to great lengths to point out that I had big ears, for God\u2019s sake. I had not heard that since I was about six or seven years old.\u201d<\/p>\n \u201cI irritated the stock market players, irritated the newbies who were investing their Biden\u2019s money, as it were,\u201d Grantham said, referring to the stimulus package<\/a> widely seen as fueling a surge in speculative investments, including the \u201cmeme stock<\/a>\u201d craze that still occasionally resurfaces. \u201cTo the moon, they were having a real time with those meme stocks. Everything worked out well.\u201d<\/p>\n The bubble within a bubble<\/p>\n Grantham\u2019s current thesis is that U.S. equities are trapped inside what he calls a \u201cbubble within a bubble.\u201d <\/p>\n The original super-bubble, as he sees it, was already inflating dangerously through 2021 before the S&P 500 started to crack. People don\u2019t remember it now, but the S&P 500 had actually fallen about 25% from January through October 2022, but then ChatGPT arrived. \u201cThe day after Chat came out, the Mag 7 lifted the market on its broad shoulders and staggered forward,\u201d he said, injecting a fresh speculative frenzy on top of an already overvalued system. The AI boom didn\u2019t fix the underlying problem, according to Grantham\u2014 t deferred it while making it larger.<\/p>\n His January 2026 paper, co-authored with Chancellor, was titled\u00a0Valuing AI: Extreme Bubble \u2014 New Golden Era \u2014 Or Both?<\/a>\u00a0The answer, in Grantham\u2019s view, is mostly the first. He has said there is a \u201cslim to none\u201d chance the AI bubble does not eventually burst, and that it could drag the broader market down to levels not seen since the worst bear markets in modern history. The market\u2019s price-to-book ratio and cyclically adjusted earnings multiples are at extremes that were only surpassed in 1929, 1972, 1999-2000, and 2021, he noted \u2014 each followed by devastating corrections. It\u2019s just what the data suggests, he told Fortune rather cheerily, noting that exuberance in the markets still isn\u2019t as dramatic as the dotcom boom. <\/p>\n His diagnosis is that the market is constitutionally incapable of looking further than the present moment. It extrapolates current conditions, piles fat price-to-earnings multiples on top of already-fat profit margins, and double-counts prosperity. \u201cThe stockbrokers would die of boredom\u201d if bubbles didn\u2019t get inflated, Grantham said. \u201cThe investors would die of boredom and a lot of money would be saved; the turnover would drop and everyone would end up making exactly the same money with a lot less excitement and doing a lot less crazy things.\u201d<\/p>\n It\u2019s almost as if owls, foxes, and dolphins are all jostling together, contending with their animal spirits more than with any rational analysis of data.<\/p>\n Layers of time around reality<\/p>\n Fortune responded that Grantham\u2019s worldview sounds like the 17th-century quote from the French philosopher Blaise Pascal: \u201call of humanity\u2019s problems stem from man\u2019s inability to sit quietly in a room alone.\u201d<\/p>\n That is \u201cabsolutely true,\u201d Grantham responded, before getting back to his nuts-and-bolt analysis of all the data he currently sees as quite disturbing. But this also takes him somewhere that most market commentators won\u2019t follow.<\/p>\n \u201cThere are kind of layers of time around reality,\u201d he said. \u201cForget the stock market, which really has a very short horizon and extrapolates today\u2019s conditions \u2014 the environment the current market is operating in is clearly about as bad as it ever gets.\u201d<\/p>\n This is Grantham\u2019s deeper, more dolphin-ish insight: a lot more than the fate of the S&P 500 is at stake. Nothing less than the long-term viability of the way we live is on his mind. Grantham put the turning point back in 2011, when he wrote a paper called Time to Wake Up, arguing that the earth was running out of abundant resources. \u201cWe were the first people that actually said, \u2018Dudes, for 100 years, we\u2019ve had technology at a bigger level than scarcity.’\u201d The takeaway: \u201cWe are going to have to get used to slower growth rates, lower resource use.\u201d And most societies, he said, have no plan for dealing with it.<\/p>\n Start with population. Grantham said he has become increasingly alarmed by what he sees as a mathematically certain demographic collapse. South Korea\u2019s fertility rate<\/a> has fallen to 0.7 \u2014 roughly one-third of the 2.1 births per woman needed to sustain a population. Japan\u2019s cohort of 20-year-olds has already halved from its peak. The same forces \u2014 urbanization, female workforce participation, expensive housing, scarce childcare \u2014 are now spreading to China, Europe, and eventually the United States. \u201cIf they\u2019re going to conquer anyone, they\u2019d better get it over with fast,\u201d Grantham said of China, \u201cbecause anyone falling in population at that speed is not going to do much of anything.\u201d <\/p>\n Although the U.S. fertility rate is below replacement, it is nowhere near South Korea\u2019s figure, but Grantham stressed the long view, globally: \u201cWe\u2019ve palled up with the experts who\u2019ve studied these things for literally 30, 40 years, they think that in as little as 20, 25 years, the average young couple will need help \u2026 [and] in 40 to 50 years, the viability of the species is at risk.\u201d<\/p>\n Then there are resources. Copper ore grades that once ran at 4% have fallen to 0.6% or less<\/a>. Nickel, zinc, and lithium are present in the Earth\u2019s crust at concentrations of less than 0.01%<\/a>. These are not recoverable shortfalls. \u201cYou don\u2019t have them in the Earth\u2019s crust,\u201d he says. \u201cYou don\u2019t have them available.\u201d And the data centers powering the AI boom that Wall Street is currently pricing at extraordinary multiples depend entirely on these same scarce metals. The International Energy Agency, S&P Global, BloombergNEF, Wood Mackenzie, and Goldman Sachs have all corroborated Grantham\u2019s point, with the IEA projecting shortages in copper and lithium within a decade.<\/p>\n Perhaps most alarming, and certainly least discussed, is what Grantham calls the toxicity crisis. He has long funded research<\/a> into declining male fertility and points to meta-analyses showing that sperm counts have dropped by more than two-thirds since the early 1970s. The culprits, in his view, are the endocrine disruptors embedded in plastics, cosmetics, and above all pesticides, which a pregnant mother absorbs at levels that can affect not just her child but potentially her grandchildren. He claimed that a study of Parkinson\u2019s disease rates found they were double within a mile of golf courses compared to areas farther away, a statistic he relayed with a certain grim relish given that his weekend home sits exactly one mile from a golf course.<\/p>\n The dolphin\u2019s consolation<\/p>\n So why isn\u2019t any of this depressing him?<\/p>\n \u201cI see it as a wonderfully challenging topic,\u201d he said. \u201cWhat depresses me is when the government goes out of its way to do things that go backwards.\u201d He attributed his composure directly to his dolphin nature \u2014 the same idealistic, questing quality that keeps him willing to swim against the current of bullish consensus, stare at uncomfortable data, and conclude, with something approaching pleasure, that he has made the case more rigorously than anyone else. He said that he sometimes make bullish calls, as he did in March 2009 with a letter titled \u201creinvesting when terrified<\/a>.\u201d He argued in it that \u201cthe market does not turn when it sees light at the end of the tunnel. It turns when all looks black, but just a subtle shade less black than the day before.\u201d<\/p>\n He also told Fortune he was philosophical about human nature and the animal spirits that drive economies\u2014and societies\u2014forward. \u201cI suspect over hundreds of thousands of years that pessimism was not a great help to survival,\u201d he said. \u201cEveryone left hanging on by their fingernails, good times, bad times, everyone\u2019s dying, running out of food, lots of food, running out of food again. But being an optimist is probably a great help.\u201d We are probably an optimistic species as a result, he argued, \u201cbut optimism, in a sense, by definition, means you\u2019re not in a great position to do unbiased analysis.\u201d<\/p>\n Grantham has decades of experience, he has just published his memoir, and he is telling you, with the cheerful conviction of a man who has been right before and expects to be right again, that the world is running out of time, resources, and people. <\/p>\n He is also telling you that almost no one wants to hear it. But that\u2019s the thing about being the only dolphin in a room full of owls: you get used to swimming alone.<\/p>\n","protected":false},"excerpt":{"rendered":"Jeremy Grantham has been called many things. Permabear. Doom merchant. Cassandra with a British accent. For decades, the…\n","protected":false},"author":2,"featured_media":580659,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,507,32048,25070,74],"class_list":{"0":"post-580658","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-bubble","12":"tag-hedge-funds","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/580658","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=580658"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/580658\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/580659"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=580658"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=580658"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=580658"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/04\/Jeremy_Grantham-photo-2.jpg\"\/)
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