Are We Heading Into Another 2008?
Maybe. Maybe not.
You know that feeling when you open your phone and suddenly everyone’s talking about Bitcoin crashing, your uncle’s bragging about his portfolio gains, and Trump’s tweeting about making America the “crypto capital of the world”? Yeah, 2025 has been that kind of year for financial markets. It’s not just you—the whole system has been on a rollercoaster, and honestly, keeping up feels like trying to watch every Netflix show at once while also understanding the lore.
Here’s the thing though: this matters more than you think. Not in a doom-and-gloom way, but because what’s happening in financial markets right now is basically a preview of the economic world we’re inheriting. The decisions being made today, about AI investments, crypto regulation, and how money flows through the economy, are setting the stage for our financial futures. So what exactly is going on in the financial market, and more importantly, what does it mean for us?
Let me break down the chaos into three major themes that are shaping markets right now, and why you should care even if you’ve never touched a stock.
The first big story is that capital markets are absolutely on fire right now, and I mean that in the best and worst ways possible. Think of capital markets as the matchmaker of the business world—it’s where companies meet investors, where mergers happen, where money finds its home. And this year? It’s been record-breaking. Goldman Sachs just posted record third-quarter revenue of $15.18 billion, with investment banking fees surging 42% from last year to $2.66 billion. We saw EA, the video game maker, get taken private in one of the biggest deals ever, companies like Chime and Figma finally going public, and Blue Owl dropping billions to help Meta build data centers. The deals are booming and the capital is flowing.
The engine driving all this? AI. Tech giants Alphabet, Meta, Microsoft and Amazon now collectively expect to spend more than $380 billion this year on AI infrastructure. Companies are pouring money into artificial intelligence at a rate that’s genuinely staggering. Let that sink in. Businesses are investing in AI nearly as much as all of us combined spend on everything we buy. Your money sitting in index funds or ETFs? It’s literally being used to build the AI systems that might replace half our jobs (kidding... mostly). This investment boom has been incredible for stock market returns. If you’ve been invested, your portfolio probably looks healthier than it has in years. But here’s the tension: when everyone’s throwing money at the same thing and valuations keep climbing, you start wondering if you’re at a party that’s about to get shut down. Are we funding genuine innovation, or are we just inflating another bubble? Both can be true, and that’s what makes this moment so weird.
Which brings me to the second theme: the market is more crowded than a Sabrina Carpenter concert, and there’s nowhere left to hide. Imagine you’re trying to find a good deal at a thrift store, but everything’s already been picked over and marked up to retail prices. That’s basically every asset class right now. The S&P 500 PE ratio hit 30.27 as of mid-November, which is historically elevated—the index has only exceeded 30 during the dot-com bubble from late 1998 to 2002. Credit markets? High yield spreads are in the tightest 5% of readings over the past 25 years. The spread between safe and risky debt is so tight that investors are basically getting paid peanuts to take on real risk. We saw this blow up spectacularly when subprime lenders like First Brands and Tricolor collapsed in October, exposing how banks like Jefferies and UBS had been betting on sketchy loans because there are no better opportunities in the market to generate an outperformance on return on investment.
Even the traditional safe havens aren’t helping. International stocks? They fall harder than US stocks whenever there’s trouble—like that saying about how when America sneezes, the world catches a cold. Real estate? Overpriced and basically locked out for most of us anyway. Gold? Even that’s expensive now. It’s like musical chairs where the music’s still playing but there aren’t enough chairs, and everyone knows it. Some big-name investors like Michael Burry are literally betting against the market, shorting it because they think we’re due for a correction. Now, I’m not saying you should follow them and start shorting everything—that’s a great way to lose money fast—but it tells you something about the nervous energy in the room.
If you’ve been invested, congrats, you’ve probably watched your numbers go up. If you jumped into crypto recently, well, you might have learned an expensive lesson about timing. And if you’ve been trying to buy a house? I’m sorry, that’s rough. But here’s the uncomfortable truth: the storm might be ahead of us, not behind us. All these gains we’ve seen could be built on shakier ground than we’d like to admit, especially with geopolitical tensions simmering everywhere.
The third theme is actually kind of exciting though: financial markets are innovating faster than ever, and that innovation is reaching us. Remember when investing felt like something only people in suits did? Now we’ve got platforms like Kalshi and Polymarket where you can literally bet on whether the Fed will cut rates or what Trump will say next. Robinhood made options trading accessible to everyone (for better or worse—it’s basically gambling but with stocks). In Canada, Wealthsimple lets you buy actual gold from your phone. These aren’t just gimmicks—they represent a fundamental democratization of finance.
More people are investing than ever before, buying ETFs, “buying the dip” when markets fall, and actually participating in wealth-building. This retail investor energy has genuinely stabilized markets in weird ways. As technology gets cheaper and AI makes personalized financial services more accessible, this trend is only accelerating. Understanding new tools like stablecoins and prediction markets isn’t just nerdy finance stuff anymore, it’s becoming basic financial literacy for our generation.
Look, I’ll be real with you: I am surrounded by people who work in finance, and even they’re constantly confused. I’ll mention stablecoins and get blank stares or jokes about whether that means coins that don’t fall over (because they are ‘stable’). People ask me why gold prices are surging or why real estate is tanking, and honestly, I’m figuring it out too. This stuff is genuinely complex, and the pace of change makes it hard for anyone to claim they’ve got it all figured out.
But here’s what I keep coming back to: as young people, we have the ultimate advantage—time. The volatility that’s freaking everyone out right now? In thirty years, it’ll be a blip on your chart. The best move is usually the boring one: keep investing regularly, diversify (yeah, I know, topic for another day), and tune out the noise. Don’t panic-sell your Bitcoin because it’s down 20%. Don’t try to time the market because you read some doomsday thread on Wall Street Journal.
The financial markets are giving us a window into the future economy we’re inheriting—messy, innovative, uncertain, but full of opportunity. Stay invested, stay curious, and remember that building wealth is a marathon, not a sprint. We’re all learning together.