Goldman’s Oppenheimer Is Worried About Froth, Not Bubbles

The video explores the concept of financial bubbles, analyzing current market conditions to determine if we are in a bubble. It discusses signs of market exuberance, high valuations, and rampant market activities like M&A. The video also examines leverage and balance sheet strength, concluding that despite high valuations, the current market does not exhibit all characteristics of a bubble, unlike the late 1990s.

What are some signs of market exuberance mentioned in the video?

• Declining EV sales

• Low M&A activity

• Strong rebounds in equities

• Decreasing equity valuations

Which characteristic is typically present during financial bubbles but is currently absent?

• High private sector leverage

• Low household balance sheets

• Decreasing equity valuations

• Weak bank balance sheets

How do current market conditions differ from those in the late 1990s?

• Higher dividend yields now

• Similar investor optimism

• Lower risk premiums now

• Higher bond yields now

What was the dividend yield on the S&P during the late 1990s?

• 3%

• 2%

• 1%

• 4%

What was the risk-free 10-year bond yield in the late 1990s?

• 6% to 6.5%

• 5% to 5.5%

• 4% to 4.5%

• 7% to 7.5%