Uploaded July 2026 | Updated September 2026, 3 weeks ago
Stock markets in the United States and the United Kingdom are flashing increasingly serious warning signs. Share prices are at extreme valuations, confidence is weakening, and the artificial intelligence boom is beginning to look much less convincing than investors expected.
In this video, I explain why these risks are reinforcing each other and why the consequences could extend far beyond those who directly own shares.
Robert Shiller’s cyclically adjusted price-to-earnings ratio, commonly known as the CAPE ratio, is now close to levels previously associated with the Wall Street crash of 1929 and the dot-com bubble of 2000. History does not tell us exactly when markets will fall, but it does tell us that valuations of this kind cannot be assumed to continue indefinitely.
The danger is not confined to the stock market. Banks and shadow banks have lent vast sums against inflated financial assets. A sharp fall in share prices could therefore spread through the financial system, threaten pensions, undermine lending and create a wider economic crisis.
AI may provide the trigger. The technology is expensive, unreliable and taking longer to implement than many forecasts assumed. If expected profits fail to materialise, the companies supporting today’s extraordinary market valuations could fall sharply.
Is Andy Burnham’s government prepared for that possibility? There is little evidence that it is.
Take a look at the poll below: youtube.com/post/UgkxP1CL83yVcBaOw8KgHysVPZZjYbk9M7NT
00:00 Could Markets Fall by 50%?
01:02 Three Major Warning Signs
01:53 Confidence Is Collapsing
03:08 The AI Boom Is Weakening
04:48 The Backlash Against AI
06:11 Extreme Share Valuations
08:08 What Could Trigger a Crash?
09:25 How Far Could Markets Fall?
10:12 The Risk to Banks
11:17 Is the Government Prepared?
TRANSCRIPT
A transcript for this video is available at: taxresearch.org.uk
IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. taxresearch.org.uk/Blog/2025/06/20/chatgpt-prompt-for-a-letter-to-your-mp
HOW TO SUPPORT US
Please consider donating: ko-fi.com/taxresearch
ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
RICHARD MURPHY ON BLUESKY:
https://bsky.app/profile/richardjmurphy.bsky.social
OR
ON MY BLOG: taxresearch.org.uk/Blog
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INTRODUCTION: youtube.com/watch?v=HdHsRPy3060
PLAYLISTS:
The Wealth Series
youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD
Ecenomics
youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4
Britain
youtube.com/playlist?list=PLvRueM6wBgobwTT4ATvJjsf8OO6S7wD10
Tax
youtube.com/playlist?list=PLvRueM6wBgoaMni_12J6ULp3yUJisUZoY
MMT
youtube.com/playlist?list=PLvRueM6wBgoZ6jvRGSW5YXu8qogE6aClX
Money
youtube.com/playlist?list=PLvRueM6wBgoYnLk1c7syTvoIo8bKYUs5m
Climate Change
youtube.com/playlist?list=PLvRueM6wBgob4_wsYaVivWd2WumpPLYwJ
USA
youtube.com/playlist?list=PLvRueM6wBgoYYd3dSyU2Oyl3x7bWJOP7H
Labour
youtube.com/playlist?list=PLvRueM6wBgoa-KhzG-fnjDSg1WROL1zMw
The Trump Administration
youtube.com/playlist?list=PLvRueM6wBgobz41-GLimTho27A3flVWQx
#richardmurphy #richardjmurphy #economy #economics #accountancy #accounting #tax #uktax #ukeconomy #greennewdeal #uk #money #economy #politics #government #tax #labour #health #life #StockMarket #StockMarketCrash #AI #ArtificialIntelligence #Investing #FinancialCrisis #Economics #USStockMarket #FTSE100 #WallStreet #CAPEratio #BankOfEngland #ShadowBanking #MarketBubble #EconomicCrisis #AndyBurnham #UKPolitics #RichardMurphy #FinancialMarkets #Recession
Stock markets in the United States and the United Kingdom are flashing increasingly serious warning signs. Share prices are at extreme valuations, confidence is weakening, and the artificial intelligence boom is beginning to look much less convincing than investors expected.
In this video, I explain why these risks are reinforcing each other and why the consequences could extend far beyond those who directly own shares.
Robert Shiller’s cyclically adjusted price-to-earnings ratio, commonly known as the CAPE ratio, is now close to levels previously associated with the Wall Street crash of 1929 and the dot-com bubble of 2000. History does not tell us exactly when markets will fall, but it does tell us that valuations of this kind cannot be assumed to continue indefinitely.
The danger is not confined to the stock market. Banks and shadow banks have lent vast sums against inflated financial assets. A sharp fall in share prices could therefore spread through the financial system, threaten pensions, undermine lending and create a wider economic crisis.
AI may provide the trigger. The technology is expensive, unreliable and taking longer to implement than many forecasts assumed. If expected profits fail to materialise, the companies supporting today’s extraordinary market valuations could fall sharply.
Is Andy Burnham’s government prepared for that possibility? There is little evidence that it is.
Take a look at the poll below: youtube.com/post/UgkxP1CL83yVcBaOw8KgHysVPZZjYbk9M7NT
00:00 Could Markets Fall by 50%?
01:02 Three Major Warning Signs
01:53 Confidence Is Collapsing
03:08 The AI Boom Is Weakening
04:48 The Backlash Against AI
06:11 Extreme Share Valuations
08:08 What Could Trigger a Crash?
09:25 How Far Could Markets Fall?
10:12 The Risk to Banks
11:17 Is the Government Prepared?
TRANSCRIPT
A transcript for this video is available at: taxresearch.org.uk
IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. taxresearch.org.uk/Blog/2025/06/20/chatgpt-prompt-for-a-letter-to-your-mp
HOW TO SUPPORT US
Please consider donating: ko-fi.com/taxresearch
ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
RICHARD MURPHY ON BLUESKY:
https://bsky.app/profile/richardjmurphy.bsky.social
OR
ON MY BLOG: taxresearch.org.uk/Blog
HIT SUBSCRIBE & GET NOTIFICATIONS
Subscribe and get notified of new videos released.
INTRODUCTION: youtube.com/watch?v=HdHsRPy3060
PLAYLISTS:
The Wealth Series
youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD
Ecenomics
youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4
Britain
youtube.com/playlist?list=PLvRueM6wBgobwTT4ATvJjsf8OO6S7wD10
Tax
youtube.com/playlist?list=PLvRueM6wBgoaMni_12J6ULp3yUJisUZoY
MMT
youtube.com/playlist?list=PLvRueM6wBgoZ6jvRGSW5YXu8qogE6aClX
Money
youtube.com/playlist?list=PLvRueM6wBgoYnLk1c7syTvoIo8bKYUs5m
Climate Change
youtube.com/playlist?list=PLvRueM6wBgob4_wsYaVivWd2WumpPLYwJ
USA
youtube.com/playlist?list=PLvRueM6wBgoYYd3dSyU2Oyl3x7bWJOP7H
Labour
youtube.com/playlist?list=PLvRueM6wBgoa-KhzG-fnjDSg1WROL1zMw
The Trump Administration
youtube.com/playlist?list=PLvRueM6wBgobz41-GLimTho27A3flVWQx
#richardmurphy #richardjmurphy #economy #economics #accountancy #accounting #tax #uktax #ukeconomy #greennewdeal #uk #money #economy #politics #government #tax #labour #health #life #StockMarket #StockMarketCrash #AI #ArtificialIntelligence #Investing #FinancialCrisis #Economics #USStockMarket #FTSE100 #WallStreet #CAPEratio #BankOfEngland #ShadowBanking #MarketBubble #EconomicCrisis #AndyBurnham #UKPolitics #RichardMurphy #FinancialMarkets #Recession
