Get Ready for the Next 'Great Crash'

NEW YORK: The next Great Crash is coming. Guaranteed. Maybe not today and maybe not tomorrow. But, in all likelihood, sooner than we think.

How can I be so sure? Because the history of modern markets is a story of meltdowns. The stock market crashed in 1987, the bond market in 1994. Mexico tanked in 1994, East Asia in 1997. Long-Term Capital Management blew up in 1998, Russia that same year. Dot-coms dotbombed in 2000. In 2007 — well, you know the rest.

And that was just the last 20 years or so. The stagflation of the 1970s, the Depression of the 1930s, the panics in the 1900s ... and back and back and back it goes, all the way to the Dutch and their tulip bulbs.

In those giddy years before the Great Recession, it seemed as if we’d grown accustomed to the wild ride. Wall Street certainly had. Jamie Dimon , the chairman and chief executive of JPMorgan Chase likes to say when his daughter came home from school one day and asked what a financial crisis was, he told her: ”It’s the kind of thing that happens every 5-7 years.”
No one should be surprised, Dimon insists, that booms go bust. That’s the way markets work. Most Americans probably find that answer unsatisfying to put it politely. After all, millions have lost their homes, their jobs, their savings. Perhaps something is wrong if CEOs expect the markets to break down every half decade or so. 

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