In response to your anniversary pieces on the 1987 and 1929 stock-market crashes (Business, Oct. 19), nothing has really improved to stop a Depression-like crash, as a result of the following:
– Huge consumer debt. Buying stocks instead of paying off credit cards results in consumers buying on margin outside Security and Exchange Commission rules.
– Liquid world economy. Assets can quickly transfer to the best return for the least risk.
– Stock “inflation.” The prime earning years of Baby Boomers result in a small supply of stocks having a large demand of buyers, which raises stock prices artificially. The underlying value of the assets is overpriced. When the Boomers start to retire and re-distribute their portfolios to bonds or cash, then the reverse will happen, and the stock prices will fall.
Investors need to wake up to reality and not get overextended.
