Wall Street Legend Warns Trump Economy Faces 1929-Style Crash After Rally

Mark Spitznagel, a hedge fund manager known as Wall Street's "crash guy," has issued a dire warning about the current U.S. economy, drawing parallels to the stock market conditions in early 1929 before the Great Depression. Spitznagel highlights that repeated federal interventions to rescue markets have allowed risks to accumulate, likening it to firefighters extinguishing forest fires but leaving dry tinder that could lead to a catastrophic "firebomb" crash amid near-record stock valuations. While he expects a short-term rally pushing the S&P 500 up to 8,000 points, representing a 20% gain, he cautions this could precede a severe market collapse similar to the 1929 crash, where the Dow lost nearly half its value in weeks and took decades to recover. Spitznagel's credibility is bolstered by his history of profiting from market crashes, including the 2015 Flash Crash, the 2008 Lehman Brothers collapse, and the Covid pandemic market turmoil. Despite his warning, he advises investors not to panic or hastily alter portfolios, as those who avoid selling may still achieve long-term gains. His assessment underscores the perverse nature of markets, which he says exist "to screw people," and stresses that the biggest risk to investors is often their own behavior.