Keynes's theory of financial markets underwent a sea change after the end of the stock market boom in the USA in 1929 and the onset of the financial crisis that followed.
The eventual outcome of this transformation was his theory of financial markets as unstable, "insane" "gambling casinos" presented in chapters 12, 13, 15, and 22 of The General Theory and in his defense of these ideas in the Quarterly Journal of Economics (hereafter QJE) in 1937, where he stressed their perverse influence on capital investment spending. This chapter provides an overview of his thinking about US financial markets in particular and global financial markets in general in the early 1930s. It also presents a few of Keynes's observations about the early onset of stagnation in the US economy and the deepening global depression during this period.