Much has been made about how much wealth is sloshing around in U.S. households and the significance of that fact.

Our call of the day, pulls no punches as it warns that all that oft-referenced increase in affluence, has been artificially inflated by the Fed, which is ultimately bad news for the economy and the stock market. Here’s how Jesse Colombo, analyst at Clarity Financial, explains it:

“The U.S. household wealth boom since the Great Recession is a sham, a farce and a gigantic lie that is tricking everyone into believing that happy days are here again even though the engines that are driving it are bubbles that are going to burst and cause a crisis that will be even worse than the 2008 crash,” Colombo said in a video he posted via the Real Investment Advice blog.

There has been a fair bit of buzz on the topic since data this summer that showed household wealth topped $100 trillion for the first time in June. Colombo’s isn’t the only invective against bloated U.S. wealth and how it could go terribly wrong, but the commentary delivers, perhaps, the most potent argument to date, including charts, such as the following, that illustrates the degree to which wealth has been outpacing economic expansion:

Real Investment Advice Pro

Wealth that gallops past economic growth is a “telltale sign that the boom is artificial and unsustainable, he said. The last two times the share of household-wealth growth exceeded gross domestic product, or GDP, was during the late 1990s dot-com bubble and the mid-2000 housing bubble, he notes. “Both of which ended in tears,” he said.

And that means the coming crash could be even more painful, warns Colombo.

Just below is another Colombo chart that shows how household wealth as a share of nominal GDP is running red-hot at 505%, vs 473% in the housing bubble peak and 429% in the dot-com bust. The current figure is totally out of whack, compared with the average of 379% that is sustained since 1951. All that means that a “violent reversion to the mean is inevitable,” he says.

Real Investment Advice Pro

The primary driver of this bubble are common stocks, which have been on a yearslong march higher, and that includes those held by big mutual funds, he says. “Extremely-inflated” equities drive up that wealth, but such as in prior busts, they drag it right back down when a bear market, or decline of at least 20% from a recent market peak, takes hold.

Colombo believes equities are overvalued on several fronts such as a favorite indicator of Berkshire Hathaway’s Warren Buffett—total value of stock market divided by GDP, which shows the market more overvalued than it was during the halcyon days of the dot.com era.

Housing prices are also way overinflated, and another contributor to that household wealth, a big chunk of middle class wealth, he says. Behind it all, is the Fed, which has sprinkled easy-money fairy dust all over the economy. And that central bank is going to bust the household wealth bubble right open, he warns, with rising interest rates and tightening monetary policy.

Read:The housing market’s slowdown is going to kill the home renovation boom too

Just a scaremonger? Colombo, who blogs at The Bubble Bubble, is among a handful of market watchers credited with predicting the 2008 housing bubble and subsequent financial market collapse. By the way, he was still a college student; so, he offered up his prognostications via a website he built called “stock-market-crash.net.”

Read:Stocks are cheap, says billionaire hedge-fund manager Leon Cooperman

The market

The S&P SPX, +1.59% , Dow DJIA, +1.33% and Nasdaq COMP, +2.26% are all down as trading gets going.

Gold US:GCU8 is softer and crude US:CLU8 is under a fair bit of pressure. and the dollar DXY, +0.23% are softer The pound is steady for now, but that make-or-break EU summit is under way. Potentially positive news has come via reports U.K. PM Theresa May may be willing to extend that Brexit transition.

Check out the Market Snapshot column for the latest action.

Read:What is Brexit? And why is it proving so complicated?

Europe SXXP, -0.09% is struggling, while China stocks SHCOMP, -0.11% had a miserable session, falling nearly 3% Asia.

The chart

Our chart of the day is from JPMorgan Chase & Co. strategists, led by Dubravko Lakos-Bujas, who said the recent equity pullback was a “temporary correction within a continuing bull market.” And those investors who want to take advantage of cheaper prices should hit up stocks primed for buybacks.

They expect buyback activity for S&P 500 companies to come in at around $800 billion this year, and think that is a conservative estimate, as they see that activity getting boost from lower stock prices and valuations. Here’s their chart showing buyback activity well above what’s been seen in recent years:

Among those that JPMorgan said are ripe for buybacks—ConocoPhillips COP, +0.29% Eastman Chemical EMN, +0.33% , Textron TXT, +1.70% , Caterpillar CAT, +0.53% , Harley -Davidson HOG, -1.38%

The buzz

Alcoa AA, -1.28% is well up on better-than-expected earnings, and the company said it sees an aluminum deficit for this year. Among those reporting Thursday — Philip Morris PM, -1.24% and Travelers TRV, +0.26% , with American Express AXP, +0.84% and PayPal PYPL, +2.77% due after the close.

Endocyte US:ECYT is screaming higher after Novartis NVS, +0.93% NOVN, +0.13% said it would buy the cancer-drug maker for $2.1 billion.

Read:As opioid crisis raged, Insys pushed higher doses of addictive drugs, leaned on salespeople

EBay EBAY, +1.35% is taking Amazon AMZN, +2.49% to court, claiming the e-commerce giant poached sellers.

The U.S. Treasury stopped short of calling China a currency manipulator, but is worried about weakness in the yuan, which hit a January low Thursday.

Some family members in control of Campbells Soup CPB, +1.60% are gearing up to help fight activist investor Daniel Loeb over changes to the board of directors.

Missing Saudi journalist Jamal Khashoggi spoke of an Arab governments muzzling the news in his final column for The Washington Post, which the paper published Wednesday night. Meanwhile, the U.S. is reportedly now asking for Turkish audio that allegedly proves he was brutally tortured and murdered.

The economy

Jobless claims data showed another drop and a Philly Fed manufacturing index showed steady growth. Leading economic indicators are still to come.

Random reads

Death toll at Crimea school rises to 19 after gun massacre

Florida man gets 40 years for plan to bring Target stock prices down by planting bombs in stores

India’s ##MeToo movement arrives with the departure of government minister M.J. Akbar over sexual-harassment allegations

Shredded Banksy painting? Artist shows in a video how the whole thing should have been destroyed.

Mad-cow disease shows up on a Scottish farm

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