A hedge fund manager dubbed Wall Street’s ‘crash guy’ has sounded the alarm over the current state of the economy after spotting similarities with the 1929 market before it went into meltdown.
Mark Spitznagel, president and chief investment officer of Universa Investments, issued chilling warning to Americans about the ‘perverse’ market.
‘The markets are perverse,’ Spitznagel told The Wall Street Journal. ‘They exist to screw people.’
Spitzagel earned the moniker ‘the crash guy’ after earning $1 billion in a single day for his clients during the 2015 ‘Flash Crash.’
During the flash crash, automated trading caused nearly one trillion dollars in US stock market value to vanish within minutes – only to rebound just as suddenly.
His hedge fund also clocked major wins when the Covid pandemic sent markets into meltdown, and when Lehman Brothers collapsed in 2008.
Spitzagel blamed repeated instances in which markets and the economy had been rescued by federal authorities, comparing it to fire fighters quickly extinguishing forest fires and in the process allowing too much dry tinder to accumulate.
He said any eventual ‘firebomb’ would be more damaging as a result of the near-record stock valuations.
Mark Spitznagel, president and chief investment officer of Universa Investments, issued chilling warning to Americans a bout the ‘perverse’ market
During the flash crash, automated trading caused nearly one trillion dollars in US stock market value to vanish within minutes – only to rebound just as suddenly
The market crashed again in 2008, prompting bailouts and mass financial ruin
The hedge fund manager drew comparisons to the early months in 1929, when stocks saw sharp rises to their gains from the early Roaring ’20s.
At the time, many on Wall Street and the New York Stock Exchange believed the abundance and rising stocks would be a permanent fixture.
Instead, it all came tumbling down in a single day, when the Dow fell 13 percent and, within two weeks, had lost almost half its value – which triggered the Great Depression.
It took 25 years, until November 1954, for the Dow to return to its pre-crash heights.
Spitzagel warned another sign investors are preparing for a crash was that the amount investors needed to own investment grade level bonds hit a low not seen since 1998 last Friday.
Additionally, trade volume on the US stock exchange fell just short of the April record set during Trump’s Liberation Day announcement and the fallout from his tariff policy.
But the White House poured water on Spitzagel’s concerns, noting Trump’s ‘unmatched track record.’
‘President Trump has an unmatched track record at ultimately proving his haters and losers wrong—and doing so with charity and graciousness,’ spokesperson Kush Desai told the Daily Beast.
Pictured: Unemployed Americans queue for food in 1930, after the market crash sparked the Great Depression
The hedge fund manager drew comparisons to the early months in 1929, when stocks saw sharp rises to their gains from the early Roaring ’20s
At the time, many on Wall Street and the New York Stock Exchange believed the abundance and rising stocks would be a permanent fixture
Spitzagel expressed similar fears back in 2024, at the time we were on the verge of the biggest stock market bubbles in history, which inevitably will end with a burst as it did in 2008.
‘This is a stark red flag, it’s a stark warning sign,’ he said, forecasting financial ruin.
‘[It’s] a great comparison to 2007.’
The biggest sin in trading, he said, is to sell near a market low or buy near a peak.
The S&P 500 has gained nearly 10 percent since Trump returned to office, according to US Bank figures reported on September 12.
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