Is the stock market on the brink of another 1929-style disaster? Andrew Ross Sorkin sounds the alarm—and it might just make you rethink your investments.
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By William Edwards (https://www.businessinsider.com/author/william-edwards)
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2025-10-14T14:25:21Z
Approaching the iconic east entrance of The Plaza Hotel, Andrew Ross Sorkin seems right at home in this luxurious setting.
Barely a moment after he steps in, he launches into vivid tales of what the hotel felt like back in the early 1900s, leaving me fumbling for my recorder to capture every word.
"Back in 1929, folks flocked here in a frenzy—business moguls everywhere, sizing each other up like it was a spectacle," he enthuses. "Think of the legendary Four Seasons lunches from the '80s and '90s; this was exactly that vibe."
The Plaza serves as a key backdrop in his latest work, "1929," which chronicles the notorious stock market collapse that ushered in the Great Depression. It's where the book's protagonist, Charlie Mitchell—head of what became Citibank and a major player in inflating the bubble—often mingled. One chapter kicks off in June 1929 with Mitchell dining at the hotel alongside General Motors' founder William Durant, while onlookers gazed in admiration at these titans. And now, Sorkin experiences a similar spotlight: on a balmy September night, guests exiting the hotel nod and offer well-wishes on his book's debut.
Beyond its role as a hangout for New York's elite, The Plaza was also a hotspot for jumping into the stock mania sweeping the nation. Its enduring Oak Room bar doubled as an EF Hutton brokerage office back then.
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"With Prohibition in full swing, bars were shut down, so speculating became the national obsession," he explains to Business Insider, gesturing toward the hotel's north side. "Brokerages popped up on street corners just like coffee shops do today."
Fast-forward nearly a century, and the landscape has transformed. Cocktails are back on the menu at The Plaza. Many of the messier excesses from the 1920s era have been curtailed by regulations. Thankfully, it's no longer permissible to hire actors to artificially inflate stock prices on the New York Stock Exchange floor. Corporations are required to provide detailed prospectuses for their shares. And, of course, we now have the Securities and Exchange Commission overseeing things.
Yet, Sorkin harbors concerns that certain patterns from the prelude to history's greatest meltdown are resurfacing, as AI-obsessed traders push markets to unprecedented peaks.
And this is the part most people miss: "It's in our human DNA to crave more," he notes. "Greed is the engine of the market."
Releasing a book about the 1929 crash in this moment feels almost like a deliberate nudge from the author.
The recent hype around AI (https://www.businessinsider.com/stock-market-ai-bubble-crash-outlook-forecast-debate-valuation-risk-2025-10) has skyrocketed stock prices to dizzying heights, prompting comparisons to infamous historical bubbles. The Shiller CAPE ratio sits at its third-highest mark on record, and the Warren Buffett indicator (https://www.businessinsider.com/warren-buffett-indicator-stock-valuations-cape-pe-ratios-ai-boom-2025-10) has hit an unprecedented level.
Sorkin, who's been crafting this book for years, swears the release timing is purely coincidental.
"Honestly, my publisher wanted this done ages ago," he admits. "And my wife? Let's just say she'd have preferred I wrapped it up sooner too."
But as we stroll across 59th Street and into Central Park, settling on a bench beneath The Plaza's shadow, Sorkin openly voices his fears that investors might face tough times ahead.
Lanna Apisukh for BI
"When I embarked on this project, I envisioned it as purely historical," Sorkin reflects. "But as I delved deeper, it struck me that nearly every aspect of 1929 mirrors our current reality."
"I'm not claiming today's market is a carbon copy of 1929—that's impossible to predict and probably not the case," he adds. "But are we in some sort of bubble? Absolutely, we're navigating one. The big question is, when will it pop?"
With bestsellers like "Too Big to Fail" on the 2008 crisis and now "1929" under his belt, Sorkin knows bubbles inside out. He outlines several striking similarities between then and now, noting how stocks soared 500% from 1921 before crashing 90% in the ensuing years.
First, there's the transformative technology captivating investors. In the 1920s, it was RCA—its shares inflated wildly, and while radio transformed communication, the stock tumbled from around $530 to just $3 in the crash.
Today, Sorkin sees AI as potentially revolutionary. However, doubts linger about whether the massive investments—billions poured into infrastructure—will pay off sustainably.
But here's where it gets controversial: "I'm not saying AI isn't fantastic for society or progress, but is there excessive overbuilding?" he questions, pointing to Nvidia's $100 billion investment in customer OpenAI as an example. "When suppliers finance their own clients, what does that really mean for long-term viability?"
Second, high-risk market segments are opening up to everyday investors.
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"The notion of trading right in hotels back then was framed as democratizing finance—everyone could get in, right?" he says. "That resonates strongly with today's push to integrate crypto, private equity, private credit, and venture capital into 401(k)s and retirement plans, thanks to new legislation like the Trump bill."
Third, safeguards that have stabilized markets are being weakened. Proposals include cutting quarterly earnings reports to twice a year, which could reduce investor visibility. The Consumer Financial Protection Bureau is facing dismantlement. And the criteria for an accredited investor—who needs to demonstrate financial savvy or substantial assets for certain opportunities—are under revision.
Of course, bubbles aren't all doom. They spur economic shifts and prosperity, with some folks striking it rich. Speculation, Sorkin emphasizes, fuels innovation. We depend on risk-takers backing bold entrepreneurs.
However, our innate greed often leads to overindulgence, followed by inevitable downturns, in his view.
In "1929," Sorkin incorporates a poignant quote from Albert Einstein, penned on October 26, 1929—just days before Black Tuesday's 11% plunge.
It states: "The ordinary human being does not live long enough to draw any substantial benefit from his own experience. And no one, it seems, can benefit by the experiences of others. Being both a father and teacher, I know we can teach our children nothing…Each must learn its lesson anew."
For beginners diving into market history, think of a stock market bubble as a period where prices inflate far beyond what's justified by fundamentals, often driven by excitement and speculation. The 1929 crash, for instance, wiped out fortunes and led to widespread unemployment, teaching us about the dangers of unchecked greed. Today's AI boom echoes this, with investors piling into tech stocks—much like the radio craze—but no one knows if the hype will hold.
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What do you think—could rolling back regulations actually benefit innovation, or is it a recipe for disaster? And are we truly in a bubble, or just witnessing healthy growth? Do you agree with Sorkin's view that greed is inevitable? Share your opinions in the comments below—we'd love to hear your take, even if it's controversial!
