To significant degrees, the market is being manipulated indirectly by the dovish and wishful-thinking policies of the Fed and directly by the high frequency traders. Although there were worrisome declines in March across the board and in certain stocks during the summer, there was no stock market crash until the fall. Farmers were hit by the depression as there was a famine during that time and they did not have any food or money.

Our most robust finding is that cross-sectional heterogeneity in expected returns, an indicator of the amount of disagreement, increased substantially with the stock market crash. The fraction of fifty-fifty probability answers in the past is a strong predictor of uncertainty about stock market returns. We decided to use the 2008 measures for the analysis despite its potential endogeneity. By Friday, the situation was so out of control that the decision was made to close down the …