The recent overwhelming events that were spawned by the financial crisis are subject of newspapers, television and radio reports every day. Passionate about history of economics and crises, Adi Lupsan, director at Intercapital Invest, told Wall-Street about the crisis of the past century and his opinion on what’s ahead of Romanian market.
“We will likely witness the greatest depression of the past century”
Experts in capital markets started to make various comparisons between the crisis we are facing now and the Great Depression in 1929-1933. Passionate about financial history and crisis, Adi Lupsan drew a comparison between the crises of the past century.
The latter crisis was the dot-com bubble in 2001-2003, an industry sector in the USA, yet not iconic for the American market. “Then there was an emotional crisis triggered by the September 11 2001 and ended with a crisis in Latin America. Dow Jones and S&P indices collapsed by 45%. The recession lasted less than a year, and it had an inflationary background, being in fact a sector crisis,” said Lupsan.
In the 70’s there was the “oil price shock” and ended in the 80’s. This has lead to a major market crash, indices sinking 40-50%, Intercapital’s director added.
50-60’s crisis had no major impact for the history of financial crises.
“In case of inflationary crises, even if the capital markets fall into a downward spiral, the access to lending is toughened, financing costs soar, oil and commodities prices boost as well, and the consumer is the one who has to deal with all the bad news”, he explained.
The last events are similar to those in the 30’s. “Oil and commodities fall into a downward trend, prices melt, and the burden will have to be born by the producer. He will be forced to lower the price. In 1929, several producers preferred to throw away the products rather than sel
