Wall Street veteran who warned of previous financial crises sounds the bubble alarm: US stock valuations, leverage, and positions are at their most extreme levels in 40 years of industry experience.

According to Jinse Finance, David Rosenberg stated that the US stock market is increasingly resembling a bubble, with valuations, leverage, and investor positions all at extreme levels never seen in his 40-year career. The Toronto-based founder of Rosenberg Research & Associates Inc. believes that the current bull market relies far more on advances in artificial intelligence (AI) than the stock market depended on the tech sector before the internet bubble. He said he has continuously been buying US Treasuries and overseas stocks in his investment portfolio, and called the US the "center of tech prosperity" where investors are paying excessively high prices.

“I have worked in the industry for 40 years, and I can’t recall ever seeing so much disparity, extremity, and imbalance—not just in the markets, but in the economy as well,” he said at Grant's Annual Fall Conference in New York. “If you don't want me to call it a bubble, I won't. But the situations I’m seeing now are truly unlike anything I've seen before.”

Rosenberg is well-known for his bearish stance. He was formerly the chief economist for North America at Merrill Lynch & Co. and gained prominence after warning about the US housing bubble before the 2008 financial crisis. Afterwards, he worked at Gluskin Sheff for more than ten years before leaving to start his own research firm.

In addition to warning about the market's increasing dependence on AI for further gains, Rosenberg also pointed out some fragility in the US economy's fundamentals. He especially highlighted that consumers are becoming increasingly reliant on continued gains in the stock market to fund their lifestyles.

“I am genuinely worried about the social consequences that the next bear market will bring,” Rosenberg said. Using those who have retired early and rely on their investment portfolios for living expenses as an example, he stressed that they will face tough choices. “What will happen to these people? Will they end up seeking cashier jobs at Walmart, only to find that even those positions have been replaced by robots?”