John Chang
Jedi
For a good account of how 1929 unfolded, suggest reading _Only Yesterday_. You'll need to thumb to the back of the book - as it talks about many other things as well that were going on in the late '20s. The chapter on FL real estate speculation might be a good read too.
The crash wasn't because people panicked, as most people assume - it was because credit dried up and people were forced to sell. People couldn't meet their margin calls, and their brokers dumped their shares on the open market. And if you read other accounts of 1929, people thought it wasn't that big a deal - volatility had been increasing for a while leading up to the "crash", and people assumed that it would recover.
A bull market ends like that - with the whole edifice honeycombed with debt, and volatility sky-high. There's always warning signs, if you know what to look for. It's the exact timing that always gets you.
Also the bank failures happened a few years later - in 1931 and 1932. People remarked about how slow the whole decline seemed, and that you could've slept through a good chunk of it without realizing what was going on.
I'm not sure we're repeating 1929 - it looks like this is going to turn into a slow grinding bear, a la 1970's. At the rate this is going, we could well be past 2010 before we see THE bottom. And we could very well see nominal highs in the Dow too, just like in 1973, before we see a 1974 decline. Treat the market price action as a fractal, take the 1970s pattern, and expand it - that's my opinion on what's going on. 2002 was "1968", we're headed towards "1973", and then we'll see "1974".
The crash wasn't because people panicked, as most people assume - it was because credit dried up and people were forced to sell. People couldn't meet their margin calls, and their brokers dumped their shares on the open market. And if you read other accounts of 1929, people thought it wasn't that big a deal - volatility had been increasing for a while leading up to the "crash", and people assumed that it would recover.
A bull market ends like that - with the whole edifice honeycombed with debt, and volatility sky-high. There's always warning signs, if you know what to look for. It's the exact timing that always gets you.
Also the bank failures happened a few years later - in 1931 and 1932. People remarked about how slow the whole decline seemed, and that you could've slept through a good chunk of it without realizing what was going on.
I'm not sure we're repeating 1929 - it looks like this is going to turn into a slow grinding bear, a la 1970's. At the rate this is going, we could well be past 2010 before we see THE bottom. And we could very well see nominal highs in the Dow too, just like in 1973, before we see a 1974 decline. Treat the market price action as a fractal, take the 1970s pattern, and expand it - that's my opinion on what's going on. 2002 was "1968", we're headed towards "1973", and then we'll see "1974".
