English Daily what would happen if financial markets crashed

What would happen if financial markets crashed? 如果金融市场崩溃会发生什么？

“For historians, each event is unique," wrote Charles Kindleberger in his study of financial crisis. But whereas "history is particular; economics is general'-- it involves searching for patterns which indicate if a cycle is turning. Today American`s financial system looks nothing like it did before the crashes of 2001 and 2008, yet lately there have been some familiar signs of froth and fear on Wall Street, wild trading days on no real news, sudden price swings and a queasy feeling among many investors that they have overdosed on techno-optimism.

Having soared in 2021, shares on Wall Street have their worst January since 2009 falling by 5.3%. The prices of assets favored by retail investors, like tech stocks, cryptocurrencies and shares in electric- car makers, have plunged. The once- giddy mood on r/wallstreetbets, a forum for digital day traders, is now mournful. It is tempting to think that the January sell-off was exactly what was needed, purging the stock market of its speculative excesses. 

But America`s new-look financial system is still loaded with risks. Asset prices are high: the last time shares was so pricey relative to long-run profits was before the slumps of 1929 and 2001, and the extra return for owning risky bonds is near its lowest level for a quarter of a century. Many portfolios have loaded up on "long-duration" assets that yield profits only in the distant future.