How to make $35 trillion ... disappear

Darian Woods interviews Gita Gopinath, former IMF chief economist, about the potential for a dot-com style bust in the current AI-driven stock market. Gopinath highlights the exceptional growth of the US stock market, particularly the "Magnificent Seven" tech stocks, and notes that the current price-to-earnings ratio is at its second-highest level in 100 years, similar to the period before the 2000 dot-com crash. She projects a scenario where a similar crash could lead to a $35 trillion loss in global wealth, with US households losing $20 trillion and the rest of the world $15 trillion, potentially causing US economic growth to halt and pushing it close to a recession. Gopinath also discusses the global spillovers, particularly to European economies, and the US government's limited capacity for increased spending due to high national debt. She advises investors to pay attention to valuations and consider diversifying their portfolios, while acknowledging the difficulty of predicting market corrections.