Stock Markets Exposed

Do you think the U.S. will see another major Stock Market crash as bad as or worse than 1929? Why?

I have heard some leading economists claim that the U.S. WILL see another crash just as bad, if not worse than the one in 1929 and I want to know your opinion.

Public Comments

1. I look for a drastic decline in stock prices in the next couple of years. Could be sooner. What goes up must come down. It would be only a guess if it will be as bad as the 1929 crash.
2. Possibly not as bad as '29, but pretty close.....we deal in billions now and the artifical prices in real estate show us that other business will be in the same prediciment. First its real estate, then loan companies and banks, then insurance companies.....Its like an over-inflated balloon....... Its about to pop.
3. I did not have the opportunity to live through the crash of 29. My great uncle did. He lost nearly everything. He had bought a bunch of stocks on margin and when they started dropping he kept meeting the margin calls with stock that he owned outright. Before the crash he was very wealthy. Afterwords, he was not any longer. Margin requirements today are greater than in 29. 50% verses 10%. That in itsself will help prevent some of the drastic selloff. On the other hand, today we have the hedge funds to deal with. They did not exist back then. They are a force that could very well offset the margin rules. Another force that is present today that was not in 29 is the high leveraged consumer and I might also add the high leveraged federal sink whole. Both of these might very well lead to a 29 type of collapse. There is some opinion that the morgage mess, which I might add was caused by Alan Greenspan, might unravel the economy and cause a crash. Maybe it has already begun. Actually, there is a body of opinion that maybe a real good crash would do a world of good for the U S economy. Sort of clean out the attic so to speak.
4. THE Stock Market will not crash like it did in 1929 the FED will do something before that happen.
5. 1) No. 2) Because there are over a billion shareholders in the Planet including electricians, lawyers, medics, nurses and waiters. (Back then only the wealthy could afford to invest in stocks)
6. no..... what "leading economist" has said this???? reason: ... in 1929 people had to guess what demand would be like next year and produce goods to meet it far in advance... so Ford would build 1 million model t 's.... when the economy slowed they would only sell 200,000 of the million anticipated... so they would close the factory and lay people off until they could reduce inventory... this meant factory workers didnt have income to buy model t's and the problem would build upon itself.... Today most production is nearly on demand.. inventory levels are micro managed....companies don't over produce the way they used to since the information is nearly instanteous. #2 as muncie said... in 1929 people could borrow 10x their cash to gamble on stocks... today they have to put up 50%... That leverage caused enormous panic selling when things turned south... today there is much more regulation and protection to ensure we are not as risky. Thing may get ugly for a segment of our economy (subprime, housing, adjustible rate debt)... but our ability to react is unprecedented in corporate america... and as long as we have jobs we can pay our interest payments.. The worst case isn't the housing market or our debt levels.... its electing a protectionist president and congress that come in to protect american jobs by enacting tarrifs on foreign goods... AKA Hawley-Smoot Tariff of 1930... or a regional mid-east war that causes fuel prices to skyrocket..(perhaps a saudi-iranian conflict with the US allies backing saudi arabia and china /russia backing iran).. can everyone say hyper-inflation (hyper-staglfation?) ... but these are unrelated to our current concerns that have beaten up the market. i think we're in for a few more years of unbridaled optimism before a global recession blindsides us... and it will only happen once CNBC assures us we are well past any risk..Money magazine runs a full year of covers featuring the great bull market..... and china has established such levels of over-production that we get stuck in a deflationary global conundrum. enjoy and stay balanced.... dont fear