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What is different about this time is how much a crash is expected, which is reflected in the run up in the gold price, for one. It’s also reflected in the publi

What is different about this time is how much a crash is expected, which is reflected in the run up in the gold price, for one. It’s also reflected in the public discourse about the high probability of a crash - as with this post and many others over the past couple years. 2008 was sudden and unexpected by most. The dot com crash was sudden and unexpected by most. If we crashed today it would have been expected by most and many would make money off the crash. I’m not sure what the effects of a highly anticipated crash are, but I’d love to discuss what they might be. It’s priced into gold, which I think reflects negative dollar sentiment. It’s not priced into the VIX, which is implied volatility across the S&P. Suggesting a crash in equities is not priced in.

mrbluecoat 9mo ago
The only thing that crashed yesterday was silver and gold
ccc3 9mo ago
I don't think that's exactly true of dot com and '08. In both cases the developing bubbles were identified and widely discussed in the years prior to the burst. The surprise in '08 was not that there was a bubble in real estate, but rather that a massive fraction of the financial system was built on leveraging that sector. To paraphrase Buffett, you don't know who's swimming naked until the tide goes out.
PeterHolzwarth 9mo ago
The dot com crash was absolutely expected - today's "cmon, get it over with! crash!" tone we see in regards to the AI bubble is hilariously reminiscent of the late 90s dot com bubble. It was the era that spawned the famous Economist leader "Crash Dammit!"
FrustratedMonky 9mo ago
" different about this time is how much a crash is expected, which is reflected in the run up in the gold price" Isn't this an indicator of a coming crash, not a counter point. Doesn't Gold go up, specifically as people buy it as a hedge against a crash.
Eridrus 8mo ago
Can an anticipated crash even happen? If you anticipate it, it means you start pricing it in, which means the price is not high enough to crash. I think many people understands there is a huge capital investment going into AI right now that is speculative and could blow up, but nobody actually knows if its going to pay off or not and everyone just defaults to their personality on how they process this risk. If you think that everyone thinks a crash is imminent, you need to expand your social circle. Someone is buying the other side of these trades. I don't know how any self-respecting person can write a blog post that starts with them hand drawing curved on an employment chart pretending they're doing analysis.
snek_case 9mo ago
Maybe not a particularly astute observation, but what I've seen in 10 years of investing is that the stock market seems to like to do the opposite of what most people expect. There's probably a game theoretic explanation to this, but as you seem to be suggesting, it basically comes down to: if the stock market was easy to predict and everyone could easily anticipate its movement, then everyone would make money, and this isn't really possible. There are big fish trying to take your money. The people selling you stocks or buying stocks from you do so because they think they are making the better move. IMO we'll see a correction some time after people get used to the crash not coming. Maybe the narrative will shift back to "money printing means it can't crash" for a while, the market will go "risk on" and then we'll get a surprise correction.
xivzgrev 9mo ago
What if the rise in index funds is a bubble on its own? It's massive and increasing amounts of money that is not price sensitive and keeps growing. There's an underlying bubble message: "the stock market always bounces back, so keep plowing your money into it even when it's down". Apparently passive funds are 60% of mutual funds / ETFs now https://www.avantisinvestors.com/avantis-insights/has-passive-investing-gotten-too-big/ https://www.avantisinvestors.com/avantis-insights/has-passiv... Even more insidious is that this is in part driven by retail who are not paying attention. It's literally the definition of passive, hands off So at some point, valuations will become increasingly disconnected from fundamentals. Active players will notice and find some way to take advantage. Passive yields will eaten. But at what point will the scales tip and people decide it's a sham and there are better places to park your money? That's when a huge bubble will collapse. I don't know. Honestly don't know if that will ever happen because I'm not sure what a better investment for average Joe would be than a passive broad stock market index.
- deleted 9mo ago
  [deleted]
- solatic 9mo ago
  US stock market index funds will crash when the US stock market crashes. That will require very large sums of capital to decide to move away from US capital markets. To give an idea of how much money would need to move - VTSAX alone is about $2.1 trillion, with hundreds of billions of dollars of shares of each Mag7 stock. You basically need the world to decide that EMEA/JAP markets are collectively stronger than the US stock market, and to collectively move their capital outside the US to be deployed in EMEA/JAP. Moves away from Mag7 to US value stocks will be captured by the US stock market index funds; moves into commodities will be seen as opportunities to buy the dip before a market rebound. You can view attempts by US private equity to purchase real estate as attempts to hedge against overvaluation in US markets, but if the US has another Great Depression, those real estate purchases won't be able to fetch high rents or prices anyway. In short, just follow the normal advice, which is not to put all your money into US domestic stocks, but to also purchase foreign stock market index funds, which help to hedge against the risk of the entire US stock market crashing. In the long run, US index funds are still a good investment - US courts still are quite powerful to settle contract disputes, the US does not have capital flight controls, and American business culture is still one of the hardest working, greediest forces on the planet - a Great Depression v2 would not change that.
le-mark 9mo ago
> 2008 was sudden and unexpected by most. The dot com crash was sudden and unexpected by most. In both those events there was clearly a bubble, and although no one could predict exact dates, corrections were expected. Exactly the situation now. The problem is predicting the top. Example;You might estimate now is a good time to pull your assets out of the markets, but then the markets go up another 10%. Then a 20% correction happens and you attempt to time the bottom but miss it. Best case you buy back in at about the same point you left. With transaction fees and capital gains you’ve lost money anyway. I did this in 2007, bought some rentals and missed a lot of gains post 2008.
xivzgrev 9mo ago
There's also the fact that US equities are now consistently best asset class. Used to be all over the map. But with rise of passive investing and global markets, capital flows to the winner. Success begets success. If something changes and suddenly foreign equities start consistently beating out US then capital would flow accordingly. But the US still has a massive advantage from passive flows propping it up in perpetuity.
- sbohacek 9mo ago
  International equities out performed US in 2025, e.g., see the chart near the bottom of the article in https://www.cnn.com/2026/01/04/investing/global-stock-market-year-international https://www.cnn.com/2026/01/04/investing/global-stock-market...
fogzen 9mo ago
Gold has crashed with previous economic crashes. In 2008 it fell 30%, silver fell by 50%.
- m-s-y 9mo ago
  This happened yesterday. Not quite 30/50, more like 20/30
ls612 9mo ago
Gold fell over 10 percent yesterday and silver almost 20 percent because Trump announced that the economist friendly choice would be nominated for the Fed. A lot of the precious metals market activity was based on fears about US monetary policy not fears of an imminent depression.
- werdnapk 9mo ago
  Gold and silver were up the most they'd ever been the previous 1-2 days... followed by them going back down. So don't mention the fall without the literal massive rise that happened hours before.
- jb1991 9mo ago
  This is a good example of a comment taken completely out of context to indicate something that’s not true at all. Take a look at a chart of gold. Crash of 10% makes it sound like gold depreciated a lot.

mrbluecoat 9mo ago

The only thing that crashed yesterday was silver and gold

ccc3 9mo ago

I don't think that's exactly true of dot com and '08. In both cases the developing bubbles were identified and widely discussed in the years prior to the burst. The surprise in '08 was not that there was a bubble in real estate, but rather that a massive fraction of the financial system was built on leveraging that sector. To paraphrase Buffett, you don't know who's swimming naked until the tide goes out.

PeterHolzwarth 9mo ago

The dot com crash was absolutely expected - today's "cmon, get it over with! crash!" tone we see in regards to the AI bubble is hilariously reminiscent of the late 90s dot com bubble. It was the era that spawned the famous Economist leader "Crash Dammit!"

FrustratedMonky 9mo ago

" different about this time is how much a crash is expected, which is reflected in the run up in the gold price" Isn't this an indicator of a coming crash, not a counter point. Doesn't Gold go up, specifically as people buy it as a hedge against a crash.

Eridrus 8mo ago

Can an anticipated crash even happen? If you anticipate it, it means you start pricing it in, which means the price is not high enough to crash. I think many people understands there is a huge capital investment going into AI right now that is speculative and could blow up, but nobody actually knows if its going to pay off or not and everyone just defaults to their personality on how they process this risk. If you think that everyone thinks a crash is imminent, you need to expand your social circle. Someone is buying the other side of these trades. I don't know how any self-respecting person can write a blog post that starts with them hand drawing curved on an employment chart pretending they're doing analysis.

snek_case 9mo ago

Maybe not a particularly astute observation, but what I've seen in 10 years of investing is that the stock market seems to like to do the opposite of what most people expect. There's probably a game theoretic explanation to this, but as you seem to be suggesting, it basically comes down to: if the stock market was easy to predict and everyone could easily anticipate its movement, then everyone would make money, and this isn't really possible. There are big fish trying to take your money. The people selling you stocks or buying stocks from you do so because they think they are making the better move. IMO we'll see a correction some time after people get used to the crash not coming. Maybe the narrative will shift back to "money printing means it can't crash" for a while, the market will go "risk on" and then we'll get a surprise correction.

xivzgrev 9mo ago

What if the rise in index funds is a bubble on its own? It's massive and increasing amounts of money that is not price sensitive and keeps growing. There's an underlying bubble message: "the stock market always bounces back, so keep plowing your money into it even when it's down". Apparently passive funds are 60% of mutual funds / ETFs now https://www.avantisinvestors.com/avantis-insights/has-passive-investing-gotten-too-big/ https://www.avantisinvestors.com/avantis-insights/has-passiv... Even more insidious is that this is in part driven by retail who are not paying attention. It's literally the definition of passive, hands off So at some point, valuations will become increasingly disconnected from fundamentals. Active players will notice and find some way to take advantage. Passive yields will eaten. But at what point will the scales tip and people decide it's a sham and there are better places to park your money? That's when a huge bubble will collapse. I don't know. Honestly don't know if that will ever happen because I'm not sure what a better investment for average Joe would be than a passive broad stock market index.

deleted 9mo ago
[deleted]
solatic 9mo ago
US stock market index funds will crash when the US stock market crashes. That will require very large sums of capital to decide to move away from US capital markets. To give an idea of how much money would need to move - VTSAX alone is about $2.1 trillion, with hundreds of billions of dollars of shares of each Mag7 stock. You basically need the world to decide that EMEA/JAP markets are collectively stronger than the US stock market, and to collectively move their capital outside the US to be deployed in EMEA/JAP. Moves away from Mag7 to US value stocks will be captured by the US stock market index funds; moves into commodities will be seen as opportunities to buy the dip before a market rebound. You can view attempts by US private equity to purchase real estate as attempts to hedge against overvaluation in US markets, but if the US has another Great Depression, those real estate purchases won't be able to fetch high rents or prices anyway. In short, just follow the normal advice, which is not to put all your money into US domestic stocks, but to also purchase foreign stock market index funds, which help to hedge against the risk of the entire US stock market crashing. In the long run, US index funds are still a good investment - US courts still are quite powerful to settle contract disputes, the US does not have capital flight controls, and American business culture is still one of the hardest working, greediest forces on the planet - a Great Depression v2 would not change that.

le-mark 9mo ago

> 2008 was sudden and unexpected by most. The dot com crash was sudden and unexpected by most. In both those events there was clearly a bubble, and although no one could predict exact dates, corrections were expected. Exactly the situation now. The problem is predicting the top. Example;You might estimate now is a good time to pull your assets out of the markets, but then the markets go up another 10%. Then a 20% correction happens and you attempt to time the bottom but miss it. Best case you buy back in at about the same point you left. With transaction fees and capital gains you’ve lost money anyway. I did this in 2007, bought some rentals and missed a lot of gains post 2008.

xivzgrev 9mo ago

There's also the fact that US equities are now consistently best asset class. Used to be all over the map. But with rise of passive investing and global markets, capital flows to the winner. Success begets success. If something changes and suddenly foreign equities start consistently beating out US then capital would flow accordingly. But the US still has a massive advantage from passive flows propping it up in perpetuity.

sbohacek 9mo ago
International equities out performed US in 2025, e.g., see the chart near the bottom of the article in https://www.cnn.com/2026/01/04/investing/global-stock-market-year-international https://www.cnn.com/2026/01/04/investing/global-stock-market...

fogzen 9mo ago

Gold has crashed with previous economic crashes. In 2008 it fell 30%, silver fell by 50%.

m-s-y 9mo ago
This happened yesterday. Not quite 30/50, more like 20/30

ls612 9mo ago

Gold fell over 10 percent yesterday and silver almost 20 percent because Trump announced that the economist friendly choice would be nominated for the Fed. A lot of the precious metals market activity was based on fears about US monetary policy not fears of an imminent depression.

werdnapk 9mo ago
Gold and silver were up the most they'd ever been the previous 1-2 days... followed by them going back down. So don't mention the fall without the literal massive rise that happened hours before.
jb1991 9mo ago
This is a good example of a comment taken completely out of context to indicate something that’s not true at all. Take a look at a chart of gold. Crash of 10% makes it sound like gold depreciated a lot.