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AIPROPX ReportFortune · 2h ago
Top economist says it’s ‘panic season’ in markets and it’s your fault for taking summer vacation. Blame the ‘harvest time’…
What is August really about? Owen Lamont, senior vice president and portfolio manager at Acadian Asset Management, suggests that for normal people, it’s about relaxing on the beach, but for financial markets, it’s “ panic season .”
Lamont, who is a portfolio manager at the $195 billion quantitative hedge fund and has been a faculty member at Harvard University, Yale School of Management, University of Chicago Graduate School of Business, and Princeton University, looked back at financial history and found a startling pattern.
“Even if systematic equities aren’t your thing,” he wrote in July 2025 on his Acadian blog, Owenomics , “you need to be mentally prepared for an epic financial disaster over the coming three months.”
His research draws a direct line between the timing of many of the most devastating financial crises and a centuries-old pattern: Market crashes tend to cluster during the so-called harvest time, spanning August to October.
The historical pattern
“For grizzled practitioners of systematic equity strategies,” Lamont writes, “August is the cruelest month.” He cast his mind back to the “ quant quake ” of August 2007, writing that analysts ever since have spent August “compulsively checking our phones and having nightmares about screens full of glowing red numbers.”
When reached for comment in August 2025, Lamont said every year around this time, panic is “certainly on my mind,” as it is for any quant equities managers who is over 50 years old.
Although overshadowed by the onset of the Great Financial Crisis in September 2008, the 2007 quant crash was a classic fit, Lamont writes, occurring during a sleepy time in markets when liquidity is thin because so many traders are away from their desks. Lamont cites modern research showing that August and September are periods of unusually low trading liquidity, as investors and market makers take summer vacations in the Northern Hemisphere. Lower market liquidity means less capacity to absorb big, sudden trades—a recipe for outsize volatility if a crisis does erupt.
Looking at the past 50 years, Lamont underscored the fact most major U.S. market crises have struck between August and October, when thinner markets amplified shocks. Among the historic market meltdowns during these months were two in September: 1998’s collapse of Long-Term Capital Management and 2008’s Lehman Brothers bankruptcy, and two in October: 1987’s Black Monday stock market crash and 1997’s Asian financial crisis. But going back to the founding of the United States itself, he sees a similar pattern.
The deep roots of harvest time
Lamont wrote that America’s first bubble, “ Scriptomania ,” occurred in July/August 1791, and the Panics of 1857 and 1873 occurred in August and September, respectively. Then the Panic of 1907 followed in October.
The culprit is clear to Lamont: summer vacation. But, in a chicken-or-the-egg discussion, he argues America’s agricultural economy created the need for time off in the summer, as that was when harvests occurred and money needed to flow from the big East Coast cities and into the Western agricultural regions.
Lamont cited Oliver Mitchell Wentworth Sprague ’s diagnoses of “panic season” in 1910’s History of Crises Under the National Banking System: “With few exceptions all our crises, panics, and periods of less severe monetary stringency have occurred in the autumn, when the western banks, through the sale of the cereal crops, were in a position to withdraw large sums of money from the East .” The pattern was spotted as far back as 1884 by English economist William Stanley Jevons . The creation of the U.S. Federal Reserve system itself was in part a reaction to such panics, Lamont adds, citing a 1986 American Economic Review article by Jeffrey Miron.
“If you do the rough math, there’s a 10% chance of an epic disaster between August and October this year, and just a 2% chance from November through the following July,” Lamont writes, cautioning investors to “be mentally prepared” for outsize risk in the coming quarter.
Lamont told Fortune that a market crash is still a “rare event,” and he wasn’t aware of any particularly levered players in the market that could spark a crash. But then again, he added, he wasn’t aware of any in August 2007 when the quant crash happened.
Lamont’s summer of 2026: panic season, live
A year on from that original conversation, Lamont has spent the summer of 2026 documenting a strange incarnation of panic season—not a crash, but a market that looks calm on the surface while churning wildly underneath it. As of late August, the S&P 500 hasn’t moved more than 1% in either direction on a single day since hitting a record high on Aug 13.
In a column titled “ Crazy days in the stock market ,” he catalogued single-day swings that wouldn’t have been out of place in his original panic-season essay: Microsoft’s market cap rose $450 billion on July 30 (by Lamont’s own measure, “1.04 Houstons,” using the Texas city’s entire taxable property base as a yardstick), while Apple lost $360 billion the very next day. Daily dispersion that week ranked third-highest since 2015, trailing only “vaccine Monday” in November 2020 and the DeepSeek shock of January 2025. Lamont told Fortune it was a “crisis-like mechanism on a small scale,” noting that some levered hedge funds got wiped out to the tune of tens of billions of dollars.
Lamont has also used the summer to flag two other symptoms he associates with late-stage market euphoria. In “ Hynix Hijinks ,” he pointed to SK Hynix’s Nasdaq ADR listing—the largest foreign equity sale in U.S. history—trading at a 49% premium to its Korean shares within days, calling it a &...
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