Yale Economist Called "The Greatest America Ever Produced" Declared Stock Prices Had Reached "A Permanently High Plateau." Nine Days Later, the Market Crashed 89%.

Irving Fisher wasn't some random pundit — Joseph Schumpeter called him "the greatest economist the United States has ever produced." Milton Friedman agreed. Fisher had pioneered mathematical economics, invented concepts still taught today (the Fisher equation, the Fisher hypothesis), and was America's first celebrity economist. On October 15, 1929, with the Dow at 381, Fisher gave a speech confidently declaring the market had found permanent equilibrium. Nine days later came Black Monday (down 13%), followed by Black Tuesday (down 12%). By mid-November, the market had lost half its value. By July 1932, the Dow bottomed at 41.22 — an 89% collapse from peak. It wouldn't return to pre-crash levels until November 1954, twenty-five years later. Fisher lost most of his personal fortune and had to be bailed out by Yale. The greatest economist America ever produced became a cautionary tale about the perils of calling a plateau "permanent."