17 days ago 1 min read

Elon Musk: 1929 Stock Market Crash And Current Bank Crisis

crypto currency-stock market-bank crisis-elon musk
  • Elon Musk draws parallels between the present bank crisis and the events in 1929 that sparked the Great Depression.
  • Musk agreed with Cathie Wood's assertion that regulators are concentrating on the incorrect issues.
  • Wood contends that authorities ought to have focused on the impending banking sector crisis.

The authorities should have focused on the banking system's impending crisis, which is characterized by a mismatch between asset and liability durations and a 19-fold increase in short rates in less than a year. For the first time since the 1920s, she claimed, deposits in the banking sector were declining year over year.

Musk agreed with Wood's view in a tweet and compared the current state of affairs to the notorious stock market crash of 1929, which helped lead to the Great Depression.

Public utility holding firms were blamed for engaging in "unethical" behavior prior to the Great Depression, which prompted congress to enact a number of federal rules intended to stabilize the markets. Similar to Wood's assessment under the current system, the Fed disregarded the issue and did nothing to stop the wave of bank collapses.

This time, it appears that the regulators are making an effort to control the situation. Plans to protect depositors from the current have been released by the Fed, Treasury Department, and FDIC. Investors remain optimistic about the future of their holdings, but it is unclear how the problem will be addressed at this time.

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