Renowned short-seller Bill Fleckenstein, who correctly predicted the financial crisis in 2007, warns the entire market could be heading for calamity.
"The market is uniquely crash-prone,"
Fleckenstein told CNBC.
"I think the market is very brittle because of high-frequency trading, ETFs, a lot of momentum investors. I don't think there's going to be any painless back door."
Fleckenstein, the president of Fleckenstein Capital, said the market is almost out of gas after running on the "fumes" of the Fed's quantitative easing program, which was "unlike anything" the investment world has seen before.
"The critical thing is from a short-selling standpoint and managing risk, the Fed is out of the equation. They may hike, they may not be able to hike, but they can't ease," he said.
"So the market's kind of on its own, and it's sort of tenuous under the surface. It's a lot weaker than the averages look like," he said.
"The Fed's out of the way, stocks are reacting to bad news, expectations are very high, and I don't think they can be met," he said.
Other experts also see the global financial gloom of recent years easing just a bit.
“With hindsight it is clear that the world economy came within a whisker of recession earlier this year,”
noted The UK Telegraph’s Ambrose Evans-Pritchard.
“This episode is now behind us. Leading indicators and monetary data in the US, Europe and China point to an accelerating rebound over coming months,” he wrote.
“America is slowly weathering the effects of the strong dollar. The economy grew at a 2.3 percent rate in the second quarter. Capital Economics expects it to accelerate to 3 percent in the second half. It is not a glorious boom, but nor is it the stuff of global meltdowns.”
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