Andrew Ross Sorkin: What can the Great Crash of 1929 tell us about today?

The 1929 Wall Street Crash serves as a critical historical benchmark for financial instability, characterized by a 90% market decline between 1929 and 1933. Financial journalist Andrew Ross Sorkin highlights that high leverage—often at 10-to-1 ratios—and a catastrophic lack of timely data were primary drivers of the collapse. During the crisis, ticker tapes lagged by several hours, forcing investors to physically visit Wall Street to ascertain their losses, which triggered widespread panic selling. While the 1929 crash saw price-to-earnings ratios peak just above 30, modern market valuations have recently exceeded 40 for only the second time in history. This elevation suggests that contemporary markets may be approaching a similar tipping point, as extreme multiples historically precede significant corrections. High levels of debt remains the primary indicator of systemic vulnerability, acting as the catalyst that transforms market downturns into enduring economic crises.