Even if there was a 29 style crash, assuming you can hold for 20 or so years, less than the length of most home mortgages, you would still come out ahead. Not that it wouldn’t be painful for seniors and those who are middle age and not well diversified, but it’s hard to not see a US crash as a buying opportunity for international capital.
A 1929-style crash was accompanied by mass unemployment (~25%), meaning people were often forced to sell at the bottom precisely because they had no income. You can't "hold" if you're selling assets to eat. Also just because it recovered in the past doesn't mean it'll follow the same trajectory in the future.
"A 1929-style crash was accompanied by mass unemployment (~25%), meaning people were often forced to sell at the bottom precisely because they had no income. You can't "hold" if you're selling assets to eat."
That's the evil thing about economic crises. People with enough capital usually can sit them out and often even benefit. People with less capital often lose everything and when the recovery comes, they have nothing that could benefit from it.
I am close to retirement and I often think how quickly your reserves can be wiped out in a long enough crisis.
How was the GFC worse? Not in unemployment rate. Not in losses to bank depositors, either. (As a kid, my mother lost money in a bank that went down in the Great Depression.) Not in business bankruptcies.
It was worse because we bailed out the banks, because they were too big to fail, teaching them the lesson that they can do stupid shit and not really pay and consequences. There's no number on that to compare to a different situation, but thems the breaks.
right. And because we know of the crashes of 2022, 2008, 2001, etc. the market is showing a lot more resiliency. Which is good, but it will take longer to have a correction. Which may be bad by itself.
Stabilizing from those crashes were all about the injecting liquidity and faith and credit in the US Treasury. Hoover didn’t handle the events subsequent to 1929 well, but more out of ignorance than malice.
In 2026, the POTUS, his family and friends are looting the treasury with brazen acts of fraud. The government is buying losing futures contracts to manipulate oil and other markets, and “mysterious people” are buying securities before scheduled, secret events to profit from it.
The US assassinated the leaders of a hostile power after they essentially gave in to our demands.
We eliminated the governments experts in a variety of strategic topics including oil, and installed toadies to run the fiscal service that disburses government funds.
People are working on undermining the FDIC and decapitating social security.
So a crash now is really disturbing. Nobody can have the level of confidence in the faith and credit of the United States as we did in 2008. The people who understand the complex issues have been purged by the government, and the rest of the leadership is complicit in criminality and is counting on loyalty to secure pardons for later. So you should be anxious.
I definitely don't think it's a case of more market resiliency but rather a case of central banks willing to act much more aggressively to respond to these things. This is often what Ben Bernanke argues, given he wrote his thesis on the '29 crash, and how he handled the '08 crisis.
Most people who have significant savings in the stock market don't have the lifespan to ride out a 25 year recovery cycle. And those young enough to have the time usually don't have much in savings yet.
I guess it depends what you call "significant". I am 40 and have over 200k in my 401k, which I think is significant. And I could most likely expect to live 25 more years. If there's a crash tomorrow, my money wouldn't grow the way I am hoping it will over that time, but I should come out ok considering that I will be getting discount stocks while the market recovers.
It is significant if you remain healthy and employed with income.
But it is basically nothing if you get laid off at age 56, and you can't find another job due to age discrimination, your COBRA runs out after 18 months, but you are not 65 years old yet for Medicare . Obamacare may be completely neutered by then, so private health insurance may cost $30k/year for a 57 year-old. You still have a mortgage, you can't afford health insurance, so you take a risk and decide to skip it, because you are healthy. Then you get pancreatic cancer, and without health insurance, your chemotherapy completely depletes your 401k in one year. Then you die of cancer at age 59, because you cannot pay for the treatments anymore.
Given your government is trying very hard to relive the global demand for the US dollar and thus repatriate the trillions of dollars held outside the US that seems very unlikely.
If you're only expecting to live to 65, you would be trying to time your 401k into a roughly 5 year window (assuming you wait until 59 1/2 to begin withdrawl).
What's more important is that before the crash there was a period of crazy market growth. So averaged out over ~10 years it didn't look all that bad. Especially accounting for deflation that happened in the same time.
Arguably people who got caught in 1970s bear market had it worse.
On the other hand, in 1970s no one got hungry - in 1930s they totally did - but it had very little to do with the stock market, agricultural crisis was because of unexpectedly quick recovery of European crops after WWI and consequential overproduction of US farms (i.e. production that they assumed will be easy to sell to Europe, found itself without market), that precipitated crisis of bad debt, attempts to compensate prices with quantity, even more bad debt as a result, and ecological disaster due to overexploitation of soil - but stock market had nothing to do with it.
A 29 style crash would be accompanied by a 29 crash in other countries. Besides most countries (besides Argentine) suffered, some more some less. The US market wouldn't necessarily be a bigger bargain than others.
