On September 20, the London Stock Exchange crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery. In order to see if the stock market crash brought about changes in expectations about stock market returns, we estimate simple OLS regressions with crude proxies for the subjective mean (μi) the subjective standard deviation (σi) and the heterogeneity of expectations.
Simple mathematics reduces a credit-worthy company to bankruptcy — for example a company with a market capitalization of $50 million owing $9 million suddenly becomes a bad risk when its total value dives to $10 million thanks to the sudden switch from profit to loss caused by the fall in the price of oil.
Academics see the Wall Street Crash of 1929 as part of a historical process that was a part of the new theories of boom and bust According to economists such as Joseph Schumpeter , Nikolai Kondratiev and Charles E. Mitchell , the crash was merely a historical event in the continuing process known as economic cycles The impact of the crash was merely to increase the speed at which the cycle proceeded to its next level.
Nobody on the planet can truly say with any real certainty that a market crash (which I’m guessing you’re equating to a selloff that will trigger economic recession) is already happening, though such claims would certainly be much easier to accurately predict if earnings fundamentals supported such claims.
Even though the stock market crashed in September 2001 at the end of a Shemitah year, and in September 2008 at the end of another Shemitah year, and it is crashing again in September 2015, somehow there are still people out there that do not think that this is real.