This is What “Always” Happens Before a Financial Crisis

There are always warning signs before a market financial crisis.
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I’m Kuran Francis, and this video breaks down the financial warning signs that have shown up before every major financial crisis in history, including the 2008 financial crisis, the Great Depression, the Panic of 1907, and even the first recorded market crashes that lead to financial crises with the Mississippi company and the South Sea Crash of 1720. Each of these moments may look different on the surface, but they all shared the same four ingredients: loss of confidence, a major new innovation, spread throughout the financial system, and unsustainable levels of debt.

We cover how government manipulation of stocks in the 1720s, along with a direct tie between those stocks and the government, lead to a financial crisis in Europe which contributed to the French Revolution. We then look at the Panic of 1907, where a new innovation in the form of investment trusts destabilized the economy, and required rescuing by a lender of last resort, eventually leading to the creation of the Federal Reserve. We then move to the worst financial crisis in US history: the Great Depression. Triggered by huge levels debt and an entire economy that was tied to the success of the stock market. Lastly, we see how every pattern appeared in the 2008 crash, fueled by complex financial instruments like CDOs and mortgage-backed securities. From the first stocks in the 1700s to the rise of wall street banks, the patterns repeat across centuries. This video connects the dots between financial history and today’s market environment, offering a clear framework to recognize the signs of a coming downturn. The next crash may be different in form, but the setup is usually the same.

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