A famous hedge fund manager is warning of a massive economic crash that could rival some of the most historic downturns in American history.
Mark Spitznagel, the hedge fund wizard who’s made a fortune betting on market mayhem, isn’t mincing words: The U.S. economy under President Donald Trump is barreling toward a catastrophe that could rival the Great Depression.
With stocks riding high on early-term euphoria, Spitznagel sees eerie parallels to 1929—and warns that federal meddling has piled up enough dry kindling for a blaze that could torch everything.
Spitznagel, the founder of Universa Investments and Wall Street’s go-to “crash guy,” laid it out starkly in a recent Wall Street Journal interview.
“I’m the crash guy—I remain the crash guy,” he said, doubling down on his track record of profiting from chaos.
Markets Outperform Despite Economic Slowdown
Back in July 2024, he flagged something “really, really bad” on the horizon, even as stocks kept climbing.
Sure enough, the S&P 500 has surged 23% since then, hitting near-record highs and adding almost 30% from its April low.
Under Trump, it’s up nearly 10% since inauguration day, mirroring the kickoff of his first term, according to U.S. Bank data from September 12.
But Spitznagel isn’t buying the rally.
He draws a chilling line to the Roaring ’20s: The Dow Jones Industrial Average ballooned six-fold from 63 in August 1921 to 381 in September 1929, only to crater 13% in a single day during the infamous Black Tuesday crash.
It shed nearly half its value in two weeks, sparking the Great Depression—and didn’t claw back to pre-crash levels until November 1954.
Today’s near-record valuations, he argues, are primed for a similar “firebomb,” fueled by years of “repeated federal rescues of markets and the economy.”
It’s like dousing forest fires too quickly, he explains: All that suppressed risk builds up as dry tinder, waiting for a spark.
“The markets are perverse. They exist to screw people,” Spitznagel said.
Expert Sentiment
Spitznagel’s firm’s history lends weight to the doomsaying.
Universa raked in billions during the 2008 Lehman collapse, the 2020 COVID meltdown, and even scored $1 billion in one wild day amid the 2015 “Flash Crash.”
Spitznagel’s tail-risk bets—hedges against black swan events—have turned skeptics into believers time and again.
The warning lands amid growing grumbles from the C-suite.
Yale business professor Jeffrey Sonnenfeld told CNN that 80% of his CEO focus group—mostly Republicans—are “disappointed” with Trump’s economic showing so far.
Private gripes center on policy whiplash, from tariff threats to immigration crackdowns, that could gum up supply chains and spook investment.
The White House isn’t sweating it.
Spokesperson Kush Desai shot back, “President Trump has an unmatched track record at ultimately proving his haters and losers wrong—and doing so with charity and graciousness.”
Trump himself has touted the market’s pep as vindication, but Spitznagel’s crystal ball suggests the party might end in tears.
As investors eye midterms and whatever fiscal fireworks Trump unleashes next, Spitznagel’s call feels like a gut check.
In a world of easy money and endless bailouts, is this rally the calm before the storm—or just another false alarm from the crash prophet on the next economic crash in America?
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