Charles Mitchell and the 1929 stock crash • Hacker News Board

Re: Charles Mitchell and the 1929 stock crash

#21

Post by bruce511 » Thu, Oct 06, 2022, 5:13 AM UTC

wsc981 wrote: post #16

bruce511 wrote: post #10

The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money flows. It flows only when "there is something better". So to keep making money there always has to be "something better" and ultimately that becomes unsustainable. 1929 was a re-adjustment, where all the bullshit is cleaned away. It was perhaps the first time…

Quoted post unavailable.

What we are experiencing now is inflation, not hyper inflation. Inflation is currently around 10% per year.

Hyperinflation is where prices are changing during the day - effectively 10% or more in a day.

Normal inflation is not new, and nothing to panic about - its how the world currently works, and how it has for at least 50 years.

I get that if you are in a country which has had low inflation for a long time, then this time can be scary. But actually this is pretty normal for most of us.

Re: Charles Mitchell and the 1929 stock crash

#22

Post by Shorel » Thu, Oct 06, 2022, 5:24 AM UTC

bruce511 wrote: post #10

The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money flows. It flows only when "there is something better". So to keep making money there always has to be "something better" and ultimately that becomes unsustainable. 1929 was a re-adjustment, where all the bullshit is cleaned away. It was perhaps the first time…

I think it is properties again. And harder this time.

Except this time it is worse. It's not about the rising prices of properties, but the idea that there isn't something else more profitable than real state long term that makes me feel the economy is stuck in a bad place.

Cryptocurrencies are noisy news-makers, but their total value is still very small compared to basically anything else.

Re: Charles Mitchell and the 1929 stock crash

#23

Post by actually_a_dog » Thu, Oct 06, 2022, 5:25 AM UTC

bruce511 wrote: post #18

bogota wrote: post #12

Earlier quoted context omitted.

Really today its crypto? The tiny market and not the massively overpriced tech stocks trading way way above earnings. They have just slightly corrected from the covid mania but many are still trading at ridiculous multiples that everyone justifies with “they will keep growing”

Not exclusively crypto, but when I see adverts for crypto on TV, and hear it pitched over radio, then I wonder. At that point it's appealing to the least sophisticated investors, which to me is the first signal of a bubble. The nature of a ponzi scheme is that it starts small, but then has to appeal to an ever larger group. This ends with mass advertising to reach the biggest group of all. Then what? Couple this with…

You may be on to something here. JFK's father, Joe Kennedy, famously got out of the stock market before the 1929 crash after the kid shining his shoes gave him stock market tips. That's pretty much the equivalent of TV and radio ads for crypto.

Re: Charles Mitchell and the 1929 stock crash

#24

Post by Phurist » Thu, Oct 06, 2022, 5:27 AM UTC

bogota wrote: post #12

bruce511 wrote: post #10

The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money flows. It flows only when "there is something better". So to keep making money there always has to be "something better" and ultimately that becomes unsustainable. 1929 was a re-adjustment, where all the bullshit is cleaned away. It was perhaps the first time…

Really today its crypto? The tiny market and not the massively overpriced tech stocks trading way way above earnings. They have just slightly corrected from the covid mania but many are still trading at ridiculous multiples that everyone justifies with “they will keep growing”

That's what they keep saying throughout history, yet it seems that tech industry as a whole just wants to reach these highs over and over again. I wonder why ? Could it be because it's the superior business case, which can reach global markets at ease ?

Oh noo... noo how can that be... my wood workshop in Agbogbloshie Dumpsite, Ghana has the best business model known to mankind, how can it be that it can not compete with BigTechCorpo123 ? Oh.. I don't know... maybe because BigTechCorpo123 can sell their product to the whole world at ease while your wood toys have to be shipped by vans ?

Re: Charles Mitchell and the 1929 stock crash

#25

Post by saulpw » Thu, Oct 06, 2022, 5:28 AM UTC

> Pecora was no grandstanding politician. He was a cigar-smoking, fedora-wearing New York City prosecutor who liked to call the bank executives “banksters” because he saw them as finance gangsters.

Re: Charles Mitchell and the 1929 stock crash

#26

Post by tjr225 » Thu, Oct 06, 2022, 5:28 AM UTC

Shorel wrote: post #22

bruce511 wrote: post #10

The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money flows. It flows only when "there is something better". So to keep making money there always has to be "something better" and ultimately that becomes unsustainable. 1929 was a re-adjustment, where all the bullshit is cleaned away. It was perhaps the first time…

I think it is properties again. And harder this time. Except this time it is worse. It's not about the rising prices of properties, but the idea that there isn't something else more profitable than real state long term that makes me feel the economy is stuck in a bad place. Cryptocurrencies are noisy news-makers, but their total value is still very small compared to basically anything else.

Property is intrinsically limited. Property in desirably places is especially intrinsically limited. You’re basically lucky if you own any property at all at this point.

Just take a gander and how much property in Hong Kong or Amsterdam costs and you’ll start to think it is cheap in the US. It’s only going to get worse. Do you think that people are going to desire living in Santa Monica or Queen Anne less over the next few hundred years?

Our planet is getting smaller relative to the amount of people that live on it and relative to the habitable places that exist.

Re: Charles Mitchell and the 1929 stock crash

#27

Post by Shorel » Thu, Oct 06, 2022, 5:32 AM UTC

bruce511 wrote: post #18

bogota wrote: post #12

Earlier quoted context omitted.

Really today its crypto? The tiny market and not the massively overpriced tech stocks trading way way above earnings. They have just slightly corrected from the covid mania but many are still trading at ridiculous multiples that everyone justifies with “they will keep growing”

Not exclusively crypto, but when I see adverts for crypto on TV, and hear it pitched over radio, then I wonder. At that point it's appealing to the least sophisticated investors, which to me is the first signal of a bubble. The nature of a ponzi scheme is that it starts small, but then has to appeal to an ever larger group. This ends with mass advertising to reach the biggest group of all. Then what? Couple this with…

Every time someone says cryptocurrencies are 'a bubble' I know they are not paying attention.

Or for some reason think there is going to be a single event that will finally end cryptocurrencies. Or they have an agenda and want them to end.

It's not a single bubble, that stuff happened several times already. They lost more than 50% of their value in a short amount of time, several times already.

It's a boiler. Its periodic bubbles, over and over again. Price fluctuations, slow climbing, then fast climbing, then it goes down, repeats. It has happened already, and it will be happening again and again.

Every time you will be watching, thinking: this time, this is 'the big bubble' and it will burst and cryptocurrencies will be no more. Except they will continue boiling, prices will go up and down, and you will have to wait for the next time.

Re: Charles Mitchell and the 1929 stock crash

#28

Post by ckw » Thu, Oct 06, 2022, 5:33 AM UTC

fshbbdssbbgdd wrote: post #17

photochemsyn wrote: post #15

Earlier quoted context omitted.

Indeed, but how about derivatives market for mortgage-backed securities? That was created by the abolition of Glass-Steagall. Heavily promoted by 'ol Alan Greenspan at the time, wasn't it? Free-market deregulation ideology in the name of international competitiveness was how it was sold as I recall.

Credit default swaps and collateralized debt obligations also predate the repeal of Glass-Steagall. I think Glass-Steagall got somewhat mythologized after the financial crisis, because there was a desire to hold related political figures responsible. It meant that people who endorsed the repeal had their fingerprints on the Great Recession. There’s some truth to the claim - Lehman was both an investment bank and a co…

The people who endorsed the repeal also successfully fought back attempts to regulate the OTC derivatives market, which arguably lead to the Great Recession.

See https://en.m.wikipedia.org/wiki/Brooksley_Born#Born_and_the_...

Re: Charles Mitchell and the 1929 stock crash

#29

Post by bmitc » Thu, Oct 06, 2022, 5:42 AM UTC

bruce511 wrote: post #10

The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money flows. It flows only when "there is something better". So to keep making money there always has to be "something better" and ultimately that becomes unsustainable. 1929 was a re-adjustment, where all the bullshit is cleaned away. It was perhaps the first time…

> At least today society is notably, collectively, smarter. There are a lot more naysayers in general, and whole there will be crashes, they tend to be more limited in scope and reach.

Is that really true?

Re: Charles Mitchell and the 1929 stock crash

#30

Post by lettergram » Thu, Oct 06, 2022, 5:42 AM UTC

bruce511 wrote: post #21

wsc981 wrote: post #16

Earlier quoted context omitted.

Quoted post unavailable.

What we are experiencing now is inflation, not hyper inflation. Inflation is currently around 10% per year. Hyperinflation is where prices are changing during the day - effectively 10% or more in a day. Normal inflation is not new, and nothing to panic about - its how the world currently works, and how it has for at least 50 years. I get that if you are in a country which has had low inflation for a long time, then t…

Hyperinflation does appear to have a loose definition of >=50% inflation by month.

https://en.m.wikipedia.org/wiki/Hyperinflation

> Normal inflation is not new, and nothing to panic about - its how the world currently works, and how it has for at least 50 years.

Even Rome had inflation, they’d dilute the amount of silver and gold in their coins.

The challenge at the moment is an asset deflation with a consumable inflation; with an economy which is shrinking. This is called stagflation and is different and has its own challenges.

https://en.m.wikipedia.org/wiki/Stagflation