On September 20, the London Stock Exchange crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery. In order to see if the stock market crash brought about changes in expectations about stock market returns, we estimate simple OLS regressions with crude proxies for the subjective mean (μi) the subjective standard deviation (σi) and the heterogeneity of expectations. Simple mathematics reduces a credit-worthy company to bankruptcy — for example a company with a market capitalization of $50 million owing $9 million suddenly becomes a bad risk when its total value dives to…