Mark W. Yusko thinks something like the 1929 stock market crash, which triggered the Great Depression, is imminent.
“I have this belief that we’re flowing toward the path of 1928-29 when Hoover was president,” Yusko, CEO of Morgan Creek Capital, said on CNBC’s Power Lunch.
Part of Yusko’s prediction rests on a president and a Congress that accomplish little. Yusko made his comments even before GOP leaders announced that the effort to repeal Obamacare likely was dead.
The economic downturn, Yusko believes, will occur this fall.
“Both [Hoover and Trump] were presidents with no experience who come in with a Congress that is all Republican, lots of big promises, lots of things that don’t happen and the fall is when people realize, ‘Wait, it hasn’t played out the way we thought,’” he said.
When Herbert Hoover became president in 1929, the unemployment rate was 4.4 percent; when he left it was 23.6 percent. The stock market crashed in October 1929, seven months after Hoover’s inauguration.
Yusko believes the stock market will crash because there simply is not enough economic growth in the U.S. to sustain current stock prices.
“[By the fall], we’ll have a lot more evidence of declining growth. Growth has been slipping,” he said.
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