"The Greatest Economist America Ever Produced" Said Stocks Had Reached a "Permanently High Plateau." Nine Days Later, They Crashed 89%.

Irving Fisher was not some cable news pundit or newsletter huckster. Joseph Schumpeter called him "the greatest economist the United States has ever produced." Milton Friedman agreed. Fisher had multiple equations and theorems named after him. He was the first celebrity economist, a Yale professor, and wealthy from his own business inventions.

On October 16, 1929, Fisher told the Purchasing Agents Association at a dinner in New York that stocks had reached a "permanently high plateau." The Dow stood at 305.

Nine days later, Black Thursday hit. By October 29 — Black Tuesday — panic selling had taken hold. The market would eventually fall 89%, bottoming at 41.22 in July 1932. Fisher lost his entire fortune (estimated at $10 million, roughly $180 million today) and had to be bailed out by Yale, which bought his house and rented it back to him to save him from homelessness.

The most respected economist in America had made the worst-timed market call in history. His academic reputation never recovered during his lifetime. "Permanently high plateau" became Wall Street shorthand for catastrophic overconfidence. Ninety-five years later, we're still quoting it every time someone says "this time is different."