Wall Street Titans Warn of Historic Market Collapse

ByElena Carter

Prominent market commentators are sounding alarms about a potential historic market crash following President Trump’s sweeping tariff announcements, with predictions ranging from another “Black Monday” collapse to an eventual 80% market wipeout. The warnings come after U.S. markets experienced their worst two-day selloff since the COVID-19 pandemic, with the Dow plunging 3,910 points and approximately $6.6 trillion in market value evaporating.

Mark Spitznagel, founder of the “Black Swan” hedge fund Universa Investments, believes the recent turmoil is merely a precursor to a much larger collapse. “I expect an 80% crash when this is over. I just don’t think this is it. This is a trap,” he wrote in commentary to MarketWatch on Monday.

Photo Source: ChrisG123/Mark Spitznagel/WikipediaCommons

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Short-Term Bullish, Long-Term Catastrophic

Despite his reputation as Wall Street’s preeminent pessimist, Spitznagel maintains a surprisingly bullish short-term outlook. “I’ve been calling for a blow-off euphoric high for two and a half years,” he told Fortune in a Friday interview. “I’m still waiting for that. I think it’s still probably going to happen.”

This contrarian view comes as Wall Street broadly turns bearish, with some analysts raising recession odds as high as 50%. Spitznagel describes the recent market volatility as merely a “head fake” that will eventually give way to further gains before the ultimate collapse.

“This is another selloff to shake people out. This isn’t Armageddon. That time will come as the bubble bursts,” he wrote. The investor, whose fund returned an astonishing 4,144% during the March 2020 market crash, believes the eventual downturn will be “far worse than ’08, ’09” and potentially the worst since 1929.

Cramer Predicts Potential “Black Monday” Scenario

Meanwhile, CNBC host Jim Cramer has issued his own stark warning, suggesting America could face another “Black Monday” market crash similar to the record 1987 collapse if President Trump doesn’t modify his tariff plans. “If the president doesn’t try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario… the one where we went down three days and then down 22% on Monday, has the most cogency,” Cramer said on his show Saturday, according to Yahoo Finance.

The 1987 crash saw the Dow Jones Industrial Average fall by 22.6% in a single day—the worst single-day drop in the index’s history. Cramer had initially supported Trump’s tariff strategy but has since changed his position in light of the market reaction. “If President Trump stays intransigent and does nothing to ameliorate the damage that I saw these last few days, I’m not going to be constructive here,” he added.

Global Economic Concerns

Trump’s announcement of a 10% blanket tariff on all imports to the U.S., with higher levies against major exporters like China and the European Union, has triggered retaliatory measures from trading partners. Apollo chief economist Torsten Slok warned that prolonged tariffs could have severe consequences: “If these levels of tariffs stay in place for several months and other countries retaliate, it will cause a recession in the US and the rest of the world.”

Spitznagel attributes the looming crisis to what he calls “the largest bubble in human history”—an explosion of debt stressed by the Federal Reserve’s aggressive rate-hiking cycle in 2022 and 2023. He believes current economic conditions featuring slowing growth, cooling inflation, and falling bond yields have created an environment where a financial disaster could unfold.

Photo Source: mediaite.com/CNBC.com

Advice for Investors

“We’ve had our clients riding this bull market for years,” Spitznagel noted. “All the doom and gloomers think it’s over and they have this figured out. Take it from a professional doomer, they don’t.” His firm employs a “tail-risk hedging” strategy that positions for rare, catastrophic events while allowing clients to participate in market upside.

For retail investors without access to sophisticated hedging strategies, Spitznagel has previously recommended buying low-cost, broad index funds and potentially adding to positions during downturns. The key, he suggests, is avoiding overextension that forces panic selling during market declines.

As markets begin trading this week, investors are watching closely to see if the dire predictions of a “Black Monday” scenario materialize or if, as Spitznagel suggests, this volatility is merely another step on the path to both higher highs and an eventual historic crash.

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Elena Carter

Elena is a seasoned political analyst who dissects elections, policies, and power plays with precision. Her expertise lies in breaking down legislation, campaign strategies, and the impact of political shifts on global markets.

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