—Comparison of Major Cycles in 1929, 2000, and 2008

On April 28, 2026, Brent crude oil remains firmly above $110, the Strait blockade remains unresolved, and consumer confidence sinks to historic lows. On the same day, the S&P 500 closes at 7,173 points, an all-time high. The Philadelphia Semiconductor Index just completed 18 consecutive gains, with a total increase of over 45%.
This extreme divergence between market and fundamentals has three reference points in financial history: the eve of the Great Depression in 1929, the dot-com bubble in 2000, and the global financial crisis in 2008.
This article will compare from five dimensions: valuation, earnings, leverage, sentiment, and geopolitics, and answer two core questions: Which crisis does this most resemble right now? How will it evolve in the future?
1. 2000 Internet Bubble: The Ultimate Carnival of the Market Dream Ratio
In March 2000, the Nasdaq Composite hit a record high of 5,048 points. The Shiller CAPE reached 44.2 times, still the highest in history. The core feature of this bubble was: many internet companies had no profits at all, and no clear business models, yet just a ".com" suffix could garner sky-high valuations. When the bubble burst, the Nasdaq fell from 5,048 to 1,114 points, a 78% decline, taking 31 months. During this period, there were 16 rebounds of over 10%, and 3 over 30%, each time leading participants to believe the bear market was over, only to be slaughtered again.
The current similarity to 2000 lies in the grand narrative—then it was "the internet will completely rewrite business rules," now it is "AI will fundamentally transform productivity." But there is a fundamental difference: the core component stocks of the 2000 bubble—most had no revenue at all. Today, the top ten weights in the S&P 500—Apple, Microsoft, Google, Amazon—are profitable with actual billion-dollar earnings. This is the first layer of reasoning why we exclude the "most like 2000" scenario: the current seven giants are profitable, which does not mean the bubble doesn’t exist, but that its form is more similar to 1929 than 2000.
2. 2008 Global Financial Crisis: The Hidden Leverage Meat Grinder
In October 2007, the S&P 500 peaked at 1,565 points. At that time, the price-to-earnings ratio was only 20.68—on the surface, the market seemed not dangerous. The real danger was hidden in the hundreds of trillions of dollars of implicit leverage in mortgage-backed derivatives. When Lehman Brothers went bankrupt, credit markets froze, and the S&P 500 plummeted 57% in 17 months. The similarity to 2008 is that leverage ratios are at extreme highs. Margin debt in the US has surged to record levels, hedge fund leverage is at its highest in five years. Hartnett from BofA has publicly warned that the asset price trend in 2026 "is disturbingly reminiscent of 2007-2008."
But there is a key difference: before the 2008 crisis, the Fed had over 5 percentage points of rate cut room. Today, the federal funds rate is held at 3.50%-3.75%, and Dalio has publicly stated that "cutting rates now would lose credibility." This means that once a crisis erupts, central banks will be unable to play the savior role they did in 2008. This is the second layer of reasoning why we exclude the "most like 2008" scenario: leverage structures are similar, but policy maneuvering space is completely blocked by $110 oil and structural inflation.
3. The Eve of the 1929 Great Depression: The Ultimate Myth of Profits
Three pieces of evidence point to 1929.
Evidence 1: Valuations at historical extremes resonate. Currently, the Shiller CAPE approaches 40 times, ranking third in history, behind only 2000’s 44 times and 1929’s about 32 times. The Buffett indicator surpasses 230%, setting a new record. The top ten components of the S&P 500 account for over 35% of the index, a record in modern financial history. These three indicators are all at extreme levels, having only occurred twice in history: once in 2000, once in 1929. Now, all three are flashing red simultaneously.
Evidence 2: The precise mirror of consecutive gains. In April 2016, the Philadelphia Semiconductor Index had 18 consecutive gains, with a total increase of about 45%. This record has only been surpassed once—after the burst of the dot-com bubble in 2002. But 2002 was a rebound from a bear market bottom, whereas 2026 is a continuation from a record high. The real comparable is the parabolic top of the Dow Jones before the crash in 1929—by July 1929, the Dow showed continuous upward momentum, and three months later, a major crash occurred.
Evidence 3, and the most critical: Profits are not a free pass—they are a deadly illusion.
This is the deepest lesson of 1929. Before the crash, the US was not inflated by the market dream ratio. The Dow Jones components were the most powerful industrial companies—US Steel, General Electric, RCA—each with monopolistic positions and strong profits. What happened after the crash? Profits collapsed off a cliff. It was not overvaluation that caused the crash, but the disappearance of profits afterward, turning what was once a "reasonable valuation" into a disaster. This is the most fatal logical blind spot for current bulls—they use the billion-dollar profits of the seven giants to argue "this time is different."
But the lesson of 1929 tells us: profits can plunge from record highs within a quarter. And the trigger that could cause a profit cliff today—$110 oil—is already knocking on the door. Also, there is a data point that did not exist in 1929: consumer confidence hit an all-time low. During the three major bubble peaks in history, consumers were euphoric and chasing highs; only this time, consumer confidence and the stock market are showing the most extreme divergence ever.
Combining the three pieces of evidence: valuation resonance, mirror of consecutive gains, profit illusion warning, plus an unprecedented collapse in consumer confidence unseen even in 1929—we conclude: at this moment, it most resembles 1929.
4. So, how will it evolve in the future?
History does not simply repeat; it only plays similar melodies with different lyrics. Overlaying the evolution logic of the three crises in 1929, 2000, and 2008 onto today’s reality, we can sketch the most likely path.
First stage: End of sideways trading (current to several weeks ahead).
Before the crash in 1929, the Dow first peaked in March, then traded sideways for about half a year until October, when it collapsed. But the conditions for sideways trading today are no longer present—1929 had ample macro liquidity and retail-dominated trading structures, whereas today, the largest buyer, CTA, has exhausted its ammunition, and pension forced sales of $25 billion are underway, with hedge funds reducing leverage for the seventh month. Sideways trading will not last half a year; it may end within weeks.
Second stage: The first wave of collapse.
When the buy orders are exhausted, the CTA’s roughly $32 billion long positions will, upon a trend reversal signal, instantly switch from buyers to sellers. Since the 18 consecutive gains have wiped out all shorts, there will be no counterparty to support the decline. Referencing the rhythm of October 28-29, 1929, a rapid collapse could wipe out 10-20% of market value within a few trading days.
Third stage: A brief rebound and a long clearing process.
After the initial plunge, some participants may think "it’s just a correction," and enter to buy the dip. This is the classic pattern from November 1929 to April 1930—Dow nearly recovers half of its decline in a few months, and many believe the bull market is restarting. But then fundamentals worsen—oil prices stay high, inflation erodes profits, AI investment returns remain delayed—and the market enters the real downtrend. Based on 1929’s cycle, the overall decline could last 24 to 33 months, with a final drop of over 50%, approaching the scale of 1929.
5. Epilogue: The Silent Return of Physical Laws
The common rule of the three major historical peaks is: when valuations are extreme, profits are on the cliff, and policies are locked, the market shifts from "faith-based pricing" back to "gravity-based weighing." Currently, the Shiller CAPE approaches 40, profits face systemic erosion from $110 oil, and the Fed’s hands are tied by inflation. History offers not a future roadmap but a warning about human nature. The super bull market’s last brick has been laid on the wall. Physical laws may be silent, but they will never be absent.