The parallels between October 1929 and today are striking.

Although the contemporary economy is far larger and more complex than it was eight decades ago, consumers were deeply in debt then, too. The gap between rich and poor had widened, thanks in part to tax cuts for the wealthy. Amid it all, the stock market—lightly regulated—grew into a speculative bubble, driven to unsupportable highs by investors who used borrowed money to purchase shares.

If you have any doubts that commercial real estate will be the next big shoe to drop, check out a random Thursday’s headlines on the Marketplace front of the WSJ:

“London Mall Opens in Worst of Times”

“As Las Vegas Slumps, Wynn Doubles Down”

“Beverly Hills Development Is in Doubt After Default”

Bloomberg notes that well-known shorts David Einhorn and Stevie Cohen aren’t having any problem raising money, unlike some of their other hedge fund peers.

  • 1
  • 2