Economists warn: "The market is in the biggest bubble ever!" The most severe recession is expected to come.

Economist Henrik Zeberg is issuing warnings about the state of the US stock market, believing it is approaching what he considers to be the largest financial bubble in history.

(Screenshot Source: Finbold)

In an X post on May 10, Zeberg emphasized that this situation is building up and could lead to a severe economic recession and market crash. The technical analyst has long held a pessimistic outlook on the economy.

His warning is based on the Buffett Indicator, which compares the total market capitalization of the US stock market to GDP, and it has now climbed to historically extreme levels.

The latest chart shows that by the end of 2025, the indicator is approaching 230%, about 75% above its long-term trend.

Data shows valuations far exceed the historical upper bounds, including the +2 standard deviation zone, which is typically associated with excessive speculation and overheated markets. The current level also surpasses the highs seen during the dot-com bubble and the post-pandemic market rebound.

Historically, the Buffett Indicator lingered around or below the long-term trend line for decades, but has soared rapidly since the mid-2010s, pushing the market further into a region associated with high downside risk.

Zeberg believes that investors ignoring the bubble are overlooking clear warning signs in the financial markets, insisting that the current cycle is fundamentally no different from previous speculative manias.

Although he thinks there may still be room for the market to climb before peaking, Zeberg warns that market conditions are already nearing a critical point.

(Screenshot Source: X)

Zeberg's Ongoing Economic Warnings

Overall, Zeberg has consistently believed that global markets are approaching the final frenzy of a years-long bull cycle, a scenario that he sees as brewing the most dramatic downturn in decades.

As of early May 2026, the expert describes the current rally in the stock and cryptocurrency markets as a classic "blow-off top" pattern; he points out that despite weakening economic fundamentals, excess liquidity and investor optimism continue to drive the uptrend.

He predicts that the S&P 500 could further climb to the 8,000 to 8,200 range before a sharp reversal occurs.

Zeberg highlights worsening consumer financial conditions, rising default rates, and slowing private sector job growth as signs that the economy is already deteriorating.

According to his business cycle model, the current parabolic rise—driven by credit expansion and investor "fear of missing out" (FOMO)—may peak in the first or second quarter of 2026, followed by a major crash whose potential impact could be more severe than the 2008 financial crisis.

Zeberg's warnings come at a time when high market valuations have sparked concerns, yet investor sentiment remains buoyed by the artificial intelligence boom, strong corporate earnings, and expectations of future interest rate cuts.