The U.S. stock market has soared about 40% since the Trump election. But is it over-valued and ready for a meltdown?

Shortly before the worst one-day crash in history in October 1987, the market had been charging ahead, with a 40% rise that year. The economy was on a roll, just like today.

What would happen if giant investment funds bailed out of stocks at the same time? Would there be another financial crisis, even worse than the events in 2008?

"We are more vulnerable to a radical readjustment," says our guest, New York Times journalist, Diana Henriques, author of the widely praised  "A First Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History." She is also the author of “The Wizard of Lies: Bernie Madoff and the Death of Trust,” a New York Times bestseller

"It is important for us always to remember that markets go up and they go down, says Diana. "What we need to worry about is do they fall apart when they fall."

"Even professional money managers today are alarmed at the fragility of market structures on which they rely."

In this episode, we look at potential solutions, including streamlined financial regulations, guaranteeing that authorities have a 360 degree view of where financial brushfires are erupting, and scrapping the highly fragmented system that we have today. We also take a second look to the findings of the Brady Commission, the post-mortem report after the "catastrophe" in 1987.

Hear more about the financial system and its flaws from our previous guests:  Roger Lowenstein on why we need The Federal Reserve; Rana Foroohar, of The Financial Times, on Wall Street's giant threat to the economy; ABC News Chief Business, Technology and Economics Correspondent, Rebecca Jarvis, on fixing everyday money mistakes.

Web Extra: How can you tell if a mutual fund is a good investment and or well regulated?