Is This 2008 All Over Again? Fears of a Financial Crash Grow Among Investors
Between escalating oil prices stemming from another war in the Middle East and signs of instability in the financial system, Americans' concerns about another 2008-like crash are mounting almost two decades after the global financial crisis.
Stocks' poor performances have compounded those worries this year, resulting in the Nasdaq slipping in and out of correction territory over the past week.
"Asset performance in 2026 is more ominously close to price action seen from mid '07 to mid '08," according to a March 12 note to clients written by Michael Hartnett, chief investment strategist at Bank of America.
The recent surge in oil prices since the United States and Israel launched attacks on Iran on Feb. 28, as well as illiquidity issues in the private credit market, bring to mind a famous Mark Twain quote: "History doesn't repeat itself, but it often rhymes."
While the current states of the market and economy may not mirror 2008, there are parallels to that year, which saw the S&P 500 crash by 38%. Many Americans have unfond memories of the subprime mortgage crisis decimating the housing market and triggering the Great Recession.
We talked to experts about what makes conditions today reminiscent of then, why it's happening now and what big differences they see.
Oil market volatility today is very different than 2008
Hartnett's assertion that market conditions today resemble those in the lead-up to the financial crisis centers on two principal factors: a rapid increase in oil prices and vulnerabilities in the financial system.
He noted that the price of oil doubled between July 2007 and August 2008. Today, Brent crude — the global oil benchmark — is trading about 60% higher than it was in early February, in large part because Iran has shuttered the Strait of Hormuz, a waterway that is vital to global supply chains.
From its one-year low of $58.66 on Dec. 16, oil prices have climbed more than 78% to over $100 per barrel at press time.
But according to Dustin Thackeray, head of portfolio management at Crewe Advisors, that rapid escalation is rooted in very different price drivers than in 2008. And it has very different implications.
" In 2007, there were some supply issues and massive demand," Thackeray says. "Today, there's less of a supply issue — other than the Strait of Hormuz being closed — and we're starting to see demand destruction in global oil."
According to the U.S. Energy Information Agency, U.S. crude oil production hit its highest levels ever last year, growing by 3%, or the equivalent of 350,000 barrels per day. That resulted in a surplus in early 2026 and underscores how — unlike in 2008 — supply is not the main problem at hand.
Thackeray also points out that the oil industry had been underperforming since energy led the S&P 500's 11 sectors in 2022 amid the last bear market. "Energy companies had been due for a little bit of a balance," he says.
This year, things have changed dramatically. Energy has delivered a market-leading 32% year-to-date gain, while the tech sector is down more than 6% and the broad S&P has lost nearly 4%.
While Thackeray acknowledges that a protracted conflict with Iran could continue to have adverse effects — including more downward price action for stocks, reignited inflation and tempered economic growth — he notes that "the war ratcheted up the immediacy of the sell-off."
Without it, markets would likely have been able to maintain stability.
Private credit — not a housing bubble — is threatening the financial system
In the late aughts, stress on the U.S. financial system was punctuated by the housing market's collapse in the wake of the subprime mortgage crisis.
Today, conditions are far different. Specifically, Thackeray says, many investors' concerns center around whether there's a bubble in private credit.
Private credit involves non-bank institutions (e.g., private equity firms, asset managers and business development companies) lending money to companies that wish to bypass the traditional banking system, often resulting in higher interest rates for borrowers and lower liquidity than are offered by their public debt counterparts.
While Hartnett pointed to "subprime tremors" as warning signs in 2007, today he says "policymakers always ride to Wall Street's rescue." That can encourage high-risk lending practices that can lead to additional defaults, thereby creating stress on the financial system.
The private credit default rate has climbed to a record high, causing significant concern among investors and analysts. According to Fitch Ratings, the rate increased to 5.8% year-over-year from January, marking its highest level since its inception in August 2024.
Given the private credit industry's lack of transparency, insights into how bad the problem has become are limited. But Thackeray says that those issues could bleed into traditional banking — a sentiment reinforced by Itay Goldstein, professor of finance and economics at the University of Pennsylvania's Wharton School.
In an interview published Tuesday, Goldstein told the university news service Penn Today that private credit lenders operate in what is often called the "shadow banking" system, performing functions similar to banks but with much less regulatory oversight and fewer disclosure requirements.
"This lack of transparency means that if something starts to break, we might not know until it's too late," Goldstein said. "A collapse wouldn't remain contained within financial markets."
A potential collapse of private credit would pose as much risk to Main Street as it would to Wall Street. Penn Today noted that private credit is increasingly funded by the savings of everyday people. For the past decade, prominent investment companies have been acquiring or partnering with life insurers and annuity providers to gain access to funds — and using those assets for private lending.
According to Penn Today, "If these loans default, it's not just deep-pocketed investors, investment bankers and the tech startups that received a lion's share of these loans who lose out. It's also the pensions and insurance policies that back them."
Corrections are normal and healthy
In addition to energy prices and private credit risks, the economy is grappling with a soft labor market and plummeting consumer confidence. Still, gross domestic product is forecast to grow. The Federal Reserve Bank of Atlanta expects 2% GDP growth in the first quarter of the year.
As for the stock market, corrections — declines of 10% to 20% from recent highs — happen, on average, once every year. The last time the stock market experienced one was in April 2025 during the fallout from President Donald Trump's tariff announcements. That puts the Nasdaq's most recent correction right on schedule.
The index has since recovered some of its losses on the president's proclamations that talks with Iran are progressing, but the market remains in a precarious position. Whether losses could extend beyond 20%, therefore placing stocks in a bear market, is highly conditional.
" Without question, we could see a 20% pullback, all dependent on how long the conflict in the Middle East continues, how long the Strait [of Hormuz] remains closed and how much damage it causes every day it's closed," Thackeray says. "By and large, we're seeing all sorts of damage ripple across the global economies."
But Thackeray also stresses that, although the potential for higher inflation is present, the market and economy remain healthy. The current risks to the financial system are much different than they were in 2008.
"We have a pretty strong consumer who's benefiting from the [One Big, Beautiful Bill Act] benefits this year, and consumers in general are in pretty good shape," he says. "So all that should bode well for companies and earnings in 2026."
That fundamental strength in the oversold names in the stock market is something that he sees as an opportunity for long-term investors.
"Maybe don't dump all your all eggs in the basket right away," Thackeray says. "We're never gonna time the bottom of any sort of a market. But if we start to put money to work in a methodical manner, we're going to benefit down the road, especially if we're a long term investor."
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