Larry Summers warns bubbling asset prices are hitting levels of froth last seen prior to the financial crisis

Larry Summers, president emeritus and professor at Harvard University, at the World Economic Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 21, 2025. (Credit: Stefan Wermuth—Bloomberg/Getty Images)

• Investors have become complacent about risk, warns Larry Summers, and have succumbed to the kind of exuberance that preceded the 2008 crash or the dotcom collapse. A measure of underlying valuation in equity markets is at the top end of the range, and cryptocurrencies are booming.

Fear has surrendered to greed, with investors far too complacent about the growing imbalances in U.S. asset markets, Larry Summers warned.