The S&P 500 has gained 12.65% in 2026. It closed Friday at 7,711.75. A Wall Street Journal column argues the closer parallel to today's trading frenzy is not 1999 but 1901, the run-up to the Panic of 1907. Columnist Jason Zweig says the danger was never expensive stocks — it was borrowed money and gambling-style trading.
The Numbers That Rhyme With 1901
Zweig leans on one figure: New York Stock Exchange turnover reached 319% in 1901, meaning the entire market changed hands roughly every four months. Bucket shops supplied the rest, letting small customers bet at heavy leverage on whether a stock would tick up or down, with no shares ever changing owners. That bet is recognizable in the current market.
Same-day options made up 66.2% of all S&P 500 options volume in July, an all-time high, Cboe reported. Prediction market platforms have also widened their catalogues again, from token prices to sporting-event phrases. Meanwhile, borrowing has kept pace: margin debt reached $1.42 trillion in July, according to Financial Industry Regulatory Authority filings, up from $1.02 trillion a year earlier.
1907 Broke on Liquidity, Not Valuation
The 1907 panic started small, when two speculators failed to corner United Copper stock in October of that year. The damage then hit trust companies, lightly regulated lenders that kept about 5% of deposits in cash against 25% at national banks. Cash then vanished: call money rates ran from 9.5% to 70%, and to 100% two days later. J.P. Morgan hauled cash to the exchange loan post to keep trading alive, and Congress created the Federal Reserve six years later. The Dow lost 40.9% from its December 1906 peak to the November 1907 bottom, a National Bureau of Economic Research study found.
Valuation drives most earlier bubble comparisons: the Shiller price-to-earnings ratio sits near 42, against a long-run average of 17.4 and just under its December 1999 record. Zweig's warning, though, is quieter and harder to hedge. Crypto shares the same funding pipes, with Bitcoin trading near $78,618 after tracking the S&P 500 through past risk shocks.
Cash looks idle while markets climb, but it turns into leverage the moment everybody else needs it at once.
Source: BeInCrypto
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