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Charles Mitchell and the 1929 stock crash

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Re: Charles Mitchell and the 1929 stock crash

#41

Post by eftychis »

throwaway290 wrote: post #37
Shorel wrote: post #22

Earlier quoted context omitted.

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.

I think it's scarcity (or to be precise scarcity mentality, which would probably extend into post-scarcity). The very reason for trying to find profit in the first place, real estate crypto or whatever, arises from wanting to outcompete someone else for resources.

That is the definition of an economy.

Re: Charles Mitchell and the 1929 stock crash

#42

Post by DocTomoe »

lmm wrote: post #39
ReptileMan wrote: post #31

Earlier quoted context omitted.

Except why is no one asking the question why so few places are desirable and doing something to alleviate it.

Because housing policy is set up so that homeowners in desirable places are the ones who have control over whether more housing gets built there, and unsurprisingly they vote to enrich themselves at the cost of everyone else. The only way to fix it is to set planning rules strictly at the national level, but who's going to vote for that?

And - in all fairness - enriching yourself only is the side-effect, the major other output being "there now is a (more) desirable place".

People want to live at increasingly more desirable places, and that is true even more so for people who cannot afford to: If such desirability was no object in their quest, Detroit would be full of people, the Bay Area wouldn't have so many issues with housing, and housing prices would be a non-issue.

If the alternative is "everywhere sucks equally", which is the likely outcome of a national-level central planning, I doubt you will find many takers.

Re: Charles Mitchell and the 1929 stock crash

#43

Post by silisili »

DSingularity wrote: post #40
silisili wrote: post #32

Earlier quoted context omitted.

> Property in desirably places is especially intrinsically limited. Yes...but property values are way up all over. Boise, Phoenix, Nashville...even middle of nowhere Kansas. El Paso is having it rough. They've always had super cheap houses to the point of unbelievable...what most would consider a decked out mansion for 300k or so, and a 3+ percent property tax. Guess what's happening now that everyone's regular ol 15…

Why would they sell? They live there now. Why also would builders not keep prices high buy produce less? 2008 was bad loans coming to head. I don’t think it’s going to be the same.

> Why would they sell

In many cases, they don't, they just walk away.

Would you stay in a 500k 2000sqft house that you have no equity in, when a 300k 2000sqft house was for sale next door? In a non-recourse state?

And even for principled people, when you lose your job or fall behind on something you overpaid for, it's really easy to just walk away.

Re: Charles Mitchell and the 1929 stock crash

#44

Post by throwaway290 »

eftychis wrote: post #41
throwaway290 wrote: post #37

Earlier quoted context omitted.

I think it's scarcity (or to be precise scarcity mentality, which would probably extend into post-scarcity). The very reason for trying to find profit in the first place, real estate crypto or whatever, arises from wanting to outcompete someone else for resources.

That is the definition of an economy.

That's a weird definition of economy you have, but you do you.

Re: Charles Mitchell and the 1929 stock crash

#45

Post by irjustin »

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.

My pessimistic view will say greed will wipe out any "collective" smartness and the cycle repeats.

Re: Charles Mitchell and the 1929 stock crash

#46

Post by sroussey »

logifail wrote: post #33

> "The bank was just basically selling anything that came along that they could make money on, and really weren’t telling investors about what their internal investigations had uncovered about the quality of the securities." That line sounds like it could be straight out of The Big Short (2015), essentially nothing has changed in the best part of 100 years.

Can I interest you in an ICO?

Re: Charles Mitchell and the 1929 stock crash

#47

Post by bruce511 »

Shorel wrote: post #27
bruce511 wrote: post #18

Earlier quoted context omitted.

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 per…

I agree that it's bubble and bursted several times. The key part of the rescue though is bringing in new money with another level of investors.

The current level seems to be pitched at "everyone". After that there's not much place to go. There are some territories currently excluded and they may come into the fold, but probably won't.

The root problem is that it's utility is limited, and as yet has not found a way to grow that utility in proportion to its overall growth.

By contrast a stock like say apple seems (and may be) bonkers, but apple has shown consistent utility growth. They improve sales by appealing to more market. People by an iPhone to use it, not to keep it and sell it for more.

Of course crypto may not crash. Red flags don't mean certain collapse. They are, after all, just red flags.

Re: Charles Mitchell and the 1929 stock crash

#48

Post by eesmith »

hypertele-Xii wrote: post #5
burglekutt wrote: post #3

Such a clickbaitey title. There were just a few.. THOUSAND.. causes that culminated in the 1929 crash, but saying one person caused it gets those clicks.

> "Mitchell more than any 50 men is responsible for this stock crash." — U.S. Senator Carter Glass, November 1929. [1] [1] https://web.archive.org/web/20070905000359/http://www.time.c...

If he were one of 10,000 then he could be 50x more responsible than the next, and still not be "the banker who caused the 1929 stock crash."

BTW, I stuck that phrase into Google Scholar and found https://www.cambridge.org/core/journals/business-history-rev...

> Extremely successful both as an investment and as a commercial banker, Charles E. Mitchell was identified by contemporaries as the epitome of the unscrupulous “money changers” whose speculative dealings they felt played a major role in the Crash of 1929 and the ensuing economic collapse. This portrayal has been echoed and elaborated by historians and commentators down to the present day. In this article Dr. Huertas and Dr. Silverman demonstrate that Mitchell's activities, while sometimes ill-advised, were motivated by the economic “good sense” of the day and were not attributable to either rampant immorality or ungoverned greed. At the same time, they direct the attention of economic historians to the monetary policies of the Federal Reserve system in the 1920s and 1930s—in which Mitchell also played a role—and suggest that a more potent source of the Great Depression lies therein.

Re: Charles Mitchell and the 1929 stock crash

#49

Post by imtringued »

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.

If you own land you own a piece of the planet. How much is permanent ownership over a given plot of land worth? Millions? Billions? Trillions? Infinite?

Why would any sane person even run a business if the government pays massive subsidies (public services) to make your land more valuable? Just buy more land.

Re: Charles Mitchell and the 1929 stock crash

#50

Post by thebradbain »

silisili wrote: post #43
DSingularity wrote: post #40

Earlier quoted context omitted.

Why would they sell? They live there now. Why also would builders not keep prices high buy produce less? 2008 was bad loans coming to head. I don’t think it’s going to be the same.

> Why would they sell In many cases, they don't, they just walk away. Would you stay in a 500k 2000sqft house that you have no equity in, when a 300k 2000sqft house was for sale next door? In a non-recourse state? And even for principled people, when you lose your job or fall behind on something you overpaid for, it's really easy to just walk away.

Even in non-recourse states, walking away from your mortgage will decimate your credit score and preclude you from getting a mortgage on a cheaper property in practice, even if theoretically it pencils out on paper.
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