Merryn Talks Money Yes It’s an AI Bubble. Here’s Why (with Albert Edwards)
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Nov 10, 2025 Albert Edwards, a veteran global strategist at Société Générale, dives deep into the AI bubble, likening today's excessive optimism to the TMT mania of the late '90s. He warns that both earnings and valuations are more fragile than they appear. The discussion covers the potential impact of Fed policies on prolonging this bubble, China's deflationary pressures, and the risks to consumption from a market crash. Edwards also explores gold's role as a safe haven and the necessity of cautious trading strategies amidst this market frenzy.
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1990s Echoes In Today's Tech Mania
- Albert Edwards says today's tech optimism echoes the late-1990s Nasdaq/TMT narrative with rich valuations justified by future growth.
- He warns that such seductive stories often end in painful corrections when conditions change.
Cheap Capital Distorts Investment
- Edwards highlights a bubble in both earnings and valuations driven by cheap capital and excessive capex in sectors like telecom in the 1990s.
- He argues that wasted investment and capital concentration strangled other parts of the economy then and could repeat now.
Y2K Baked Beans As Market Insurance
- Edwards recalls the Y2K scare when markets expected computers to fail and investors bought cash and tins of food as insurance.
- He uses that episode to show how liquidity withdrawal popped the late‑1990s Nasdaq bubble.