CNBC’s Andrew Ross Sorkin Sounds Alarm on Stock Market Crash: Are We Facing Another 1929?

Wall Street might be on the brink of another stock market crash, similar to the one in 1929 that led to the Great Depression. Financial journalist Andrew Ross Sorkin, known for his work on CNBC’s “Squawk Box” and the *New York Times’* DealBook, recently shared his concerns on CBS News’ “60 Minutes.”

Sorkin, who explores the 1929 crash in his new book, points out that today’s booming, AI-driven market feels reminiscent of the “Roaring Twenties,” right before the dramatic downturn. “The stock market surged 90% from 1928 to September 1929,” he noted, highlighting how history can repeat itself.

Currently, the S&P 500 is up about 13%, and the Dow Jones has risen 9% as of October. Major tech stocks are driving these gains, but Sorkin warns this growth might be unsustainable. He called it a classic speculative bubble, attributing part of the excitement to influxes of investor money into AI companies.

“We could be experiencing a gold rush or just a sugar rush,” he said, indicating that the real impact of this investment spree may take years to reveal. He expressed anxiety over the increasing debt in the market and how easy access to credit is drawing in everyday investors, much like in the years leading up to 1929.

Sorkin also raised concerns about the recent loosening of financial regulations. He believes that protections put in place after the 1929 crash, like SEC rules and consumer safeguards, are now weakened. For instance, the Consumer Financial Protection Bureau is not as robust as it once was. Without these protections, Sorkin fears that speculation in private markets disguised as opportunity could lead to widespread financial peril.

Historically, the 1929 crash taught us crucial lessons about market regulation. Back then, many ordinary Americans invested based on easy credit promises. Today, similar temptations exist through private equity and venture capital. As Sorkin puts it, “It’s not that we’re going off a cliff tomorrow, but there’s speculation in the market today.”

In recent surveys, around 64% of investors expressed a belief that the market is operating under speculative conditions. This sentiment echoes Sorkin’s warnings, suggesting a growing anxiety regarding the future of investments.

As the call for more inclusive investing options grows, Sorkin cautions that opening up riskier markets might backfire. He highlights the ongoing push to allow small investors access to ventures that were once exclusive to the wealthy, arguing that while this could democratize wealth, it also risks exposing more people to significant losses.

While the market hasn’t crashed yet, the combination of high debt, speculation, and weakened regulations has many experts worried. As history shows, ignoring these signs can lead to dire consequences. Sorkin’s perspective serves as a reminder that a balance between innovation and caution is essential in today’s financial landscape.

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