By Wall Street Journal
Copyright indiatimes
Hedge fund manager Mark Spitznagel is warning that the U.S. economy under Trump could face a huge crash, possibly the biggest since the 1929 Wall Street Crash. Spitznagel is called the “crash guy” or “Black Swan” investor because he has built a reputation for predicting and profiting from market collapses. “I’m the crash guy — I remain the crash guy,” Spitznagel said in his interview with The Wall Street Journal. He compared today’s market with early 1929, when stocks kept climbing after the Roaring ’20s, before the crash began. Spitznagel said repeated federal rescues of the markets and economy are like putting out forest fires too quickly — it leaves behind “dry tinder” that can later cause a giant “firebomb”. Spitznagel believes today’s near-record stock valuations make the risk even higher, as reported by Wall Street Journal. Trump economy market riskDespite this warning, U.S. Bank reported on Sept. 12 that the S&P 500 is up nearly 10% since Trump returned to office, similar to the start of his first term. The S&P 500 is also up nearly 30% from its April low and hit all-time highs in September, as per the report by Daily Beast.A White House spokesperson, Kush Desai, rejected Spitznagel’s warning, saying “President Trump has an unmatched track record at ultimately proving his haters and losers wrong—and doing so with charity and graciousness”.Historical market crash & Spitznagel’s warningHistory lesson, in the 1929 crash, the Dow Jones had climbed six times from 63 in 1921 to 381 in 1929. Then it fell nearly 13% in one day, almost 12% the next day, and within two weeks it had lost almost half its value. This started the Great Depression. Live EventsThe Dow did not recover to its pre-crash level until November 1954, 25 years later. Spitznagel has profited from past crises, which makes his warning more credible; his fund, Universa Investments, gained big when Lehman Brothers collapsed in 2008. He made strong profits during the COVID-19 market meltdown in 2020. He earned $1 billion in a single day for clients during the 2015 “Flash Crash”, as per the report by Daily Beast.In July 2024, Spitznagel already warned of something “really, really bad” coming, but first with stock gains. Since then, the S&P 500 has climbed 23%. He added that Federal Reserve interest rate cuts could push stocks even higher before the crash, predicting the S&P 500 could hit 8,000 points quickly — a 20% jump from current levels, as stated by NJ.com.Spitznagel bluntly said, “The markets are perverse. They exist to screw people.” He is not the only one concerned about Trump’s economy. Behind closed doors, many top business leaders are unhappy with his agenda. Jeffrey Sonnenfeld, a Yale professor known as the “CEO whisperer,” told CNN that 80% of CEOs in his focus group — most of them Republicans — are disappointed with Trump’s economic performance, as mentioned in the report by Daily Beast. FAQsQ1. Is the US economy under Trump at risk of a crash?Hedge fund manager Mark Spitznagel warns that Trump’s economy could face a major crash, similar to the 1929 Wall Street Crash, due to high stock valuations and repeated federal market rescues.Q2. Who is Mark Spitznagel and why is his warning important?Spitznagel, called the “crash guy,” is a hedge fund manager who profited during past crises like the 2008 Lehman collapse and 2020 COVID crash, giving weight to his warning about a potential market crash.Add as a Reliable and Trusted News Source Add Now!
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News ontrump economy crashmark spitznagel warningus stock market risks&p 500 forecastwall street crash 1929 comparisonfederal reserve rate cutsuniversa investments profitscovid market meltdowndow jones history crashceo concerns trump economy(Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates….moreless
