\u201cHistory doesn\u2019t repeat itself, but it often rhymes,\u201d Mark Twain is supposed to have said.<\/p>\n
And the rhyme in the financial market is sounding eerily like something that has played out nearly 100 years before, according to a rising chorus of expert voices.<\/p>\n
One of the loudest warnings comes from financial commentator Andrew Ross Sorkin, who recently authored a book called \u20181929: Inside the Greatest Crash in Wall Street History \u2013 and How It Shattered a Nation\u2019.<\/p>\n
In a recent interview with CBS, Sorkin noted similarities between conditions prevailing now and those ahead of the 1929 crash.<\/p>\n
\u201cI just can’t tell you when, and I can’t tell you how deep. But I can assure you, unfortunately, I wish I wasn’t saying this, we will have a crash,\u201d Sorkin said.<\/p>\n
To be sure, the conditions between the 1920s \u2013 also called the Roaring Twenties \u2013 and the 2020s aren\u2019t the same.<\/p>\n
The 1920s boom was led by margin funding in stocks, a move that Wall Street copied from General Motors\u2019 playbook of offering cars on easy finance. The leverage buildup in stocks combined with central banks\u2019 inability to print their way out of a problem \u2013 thanks to the pesky gold standard \u2013 meant that a crash on Wall Street was accompanied by deflationary spiral on Main Street.<\/p>\n
Today is much different, as ECB President Christine Lagarde noted in a widely-acclaimed speech last year, pointing to how central banks have used monetary policy to boost the economy while also being able to tame inflation that followed in the wake of their steps.<\/p>\n
But while the conditions aren\u2019t the same, there are similarities. There are three factors.<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cHistory doesn\u2019t repeat itself, but it often rhymes,\u201d Mark Twain is supposed to have said. And the rhyme…\n","protected":false},"author":2,"featured_media":96854,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-96853","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/96853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=96853"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/96853\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/96854"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=96853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=96853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=96853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}