Zeberg, a well–known macro analyst, warns that the markets are in a huge bubble and a collapse awaits us, worse than the Great Depression of 1929.

His thesis about an overheated market is valid, but there are also counterarguments that can mitigate or delay the expected “crash.” Let's analyze the pros and cons.

Why could Zeberg be right?

1️⃣ Market valuation at historical highs

• P/E S&P 500 (Price-to-Earnings) and market capitalization to GDP (Buffett Indicator) do indicate an overheated market, which has historically been accompanied by corrections.

• The stock market capitalization of 260% of GDP is higher than before the dotcom crisis (~140%) and before 2008 (~105%).

2️⃣ Economic cycles and recession

• Every 7-10 years, markets go through cyclical downturns.

• After aggressive growth since 2020, the market may find itself in a period of “hangover” – high inflation, expensive loans, falling company profits.

3️⃣ Money supply (M2) and growth in printed money

• The graph shows that the strong growth of the stock market coincided with a period of active money printing (QE).

• But now the Fed is still conducting QT (withdrawal of liquidity), which poses a risk to the markets.

4️⃣ "Blow-off Top" before the collapse

• The logic of the bubble: before the collapse, the markets make a final vertical takeoff (“Blow-off Top”), as it was in 1929, 2000 and 2007.

• The bull market of 2024-2025 looks exactly like such an impulsive growth.

Why can Zeberg be wrong (or panic early)?

1 . The Fed may change course and begin easing

• For now, the Fed is keeping rates high, but if they stop withdrawing liquidity and lower the rate, the market may not fall for a long time.

• The expectation of a rate cut in the second half of 2025 may support the market.

2️⃣ Global liquidity is growing again

• Despite the tightening of the Fed, Europe, China and Japan are flooding the economy with money.

• This could offset the liquidity squeeze in the US and support stock markets.

3. Bitcoin, Gold, and Tech Companies are Still Trending

Historically, the dotcom bubble was caused by the reassessment of loss-making companies. AI, Bitcoin, and technology are making real money now.

• If there are real incomes in the market, the bubble may not burst, but simply adjust.

4. People are still afraid to invest (which means there may not be a bubble)

• In 1999 and 2007, everyone was insanely optimistic, but now many, on the contrary, expect a crash.

• When too many people are waiting for the fall, it is postponed because there is no euphoria on which the last buyers “burn out".

Conclusion: will there be a collapse?

In the short term, markets are likely to grow (“Blow–off Top”) if the Fed does not decide to sharply squeeze liquidity.

Medium–term (1-2 years) - the probability of a serious correction or even a crisis is high if economic data continues to deteriorate.

The Fed's factor is the main trigger: if they start printing money before the crash, the market can avoid a large–scale collapse, but if not, a correction is inevitable.

, What should I do?

• It is important to monitor the Fed's decisions and global liquidity – if they continue to ease, there may not be a collapse.

• Be prepared for a possible correction, but do not rush into a short – there may be another final upward impulse.