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1929: Inside the Greatest Crash in Wall Street History
41–50 of 90 posts
Re: 1929: Inside the Greatest Crash in Wall Street History
#42[deleted]
Re: 1929: Inside the Greatest Crash in Wall Street History
#43Earlier quoted context omitted.
Even if there was a 29 style crash, assuming you can hold for 20 or so years, less than the length of most home mortgages, you would still come out ahead. Not that it wouldn’t be painful for seniors and those who are middle age and not well diversified, but it’s hard to not see a US crash as a buying opportunity for international capital.
A 1929-style crash was accompanied by mass unemployment (~25%), meaning people were often forced to sell at the bottom precisely because they had no income. You can't "hold" if you're selling assets to eat. Also just because it recovered in the past doesn't mean it'll follow the same trajectory in the future.
"A 1929-style crash was accompanied by mass unemployment (~25%), meaning people were often forced to sell at the bottom precisely because they had no income. You can't "hold" if you're selling assets to eat."
That's the evil thing about economic crises. People with enough capital usually can sit them out and often even benefit. People with less capital often lose everything and when the recovery comes, they have nothing that could benefit from it.
I am close to retirement and I often think how quickly your reserves can be wiped out in a long enough crisis.
Re: 1929: Inside the Greatest Crash in Wall Street History
#44Earlier quoted context omitted.
Most people who have significant savings in the stock market don't have the lifespan to ride out a 25 year recovery cycle. And those young enough to have the time usually don't have much in savings yet.
I guess it depends what you call "significant". I am 40 and have over 200k in my 401k, which I think is significant. And I could most likely expect to live 25 more years. If there's a crash tomorrow, my money wouldn't grow the way I am hoping it will over that time, but I should come out ok considering that I will be getting discount stocks while the market recovers.
It is significant if you remain healthy and employed with income.
But it is basically nothing if you get laid off at age 56, and you can't find another job due to age discrimination, your COBRA runs out after 18 months, but you are not 65 years old yet for Medicare . Obamacare may be completely neutered by then, so private health insurance may cost $30k/year for a 57 year-old. You still have a mortgage, you can't afford health insurance, so you take a risk and decide to skip it, because you are healthy. Then you get pancreatic cancer, and without health insurance, your chemotherapy completely depletes your 401k in one year. Then you die of cancer at age 59, because you cannot pay for the treatments anymore.
Re: 1929: Inside the Greatest Crash in Wall Street History
#45Earlier quoted context omitted.
A 1929-style crash was accompanied by mass unemployment (~25%), meaning people were often forced to sell at the bottom precisely because they had no income. You can't "hold" if you're selling assets to eat. Also just because it recovered in the past doesn't mean it'll follow the same trajectory in the future.
Because we know of the '29 crash, the next one will always be different. Arguably the GFC was way worse, but way different.
How was the GFC worse? Not in unemployment rate. Not in losses to bank depositors, either. (As a kid, my mother lost money in a bank that went down in the Great Depression.) Not in business bankruptcies.
In what sense was the GFC worse?
Re: 1929: Inside the Greatest Crash in Wall Street History
#46Earlier quoted context omitted.
Because we know of the '29 crash, the next one will always be different. Arguably the GFC was way worse, but way different.
How was the GFC worse? Not in unemployment rate. Not in losses to bank depositors, either. (As a kid, my mother lost money in a bank that went down in the Great Depression.) Not in business bankruptcies. In what sense was the GFC worse?
It was worse because we bailed out the banks, because they were too big to fail, teaching them the lesson that they can do stupid shit and not really pay and consequences. There's no number on that to compare to a different situation, but thems the breaks.
Re: 1929: Inside the Greatest Crash in Wall Street History
#47Earlier quoted context omitted.
I hope not, my parents were teenagers at the time, my fathers life was terrible back then, he had to join the CCC to survive and to help out his family. He had told me working with the CCC was not a bed of roses and he saw many terrible accidents to some of the workers. But he was glad it existed. Also, back then, I believe people were on average stronger and more resilient people alive today. Having such a crash wil…
Yes, nothing in recent history gives me any faith that we'll all pull together in the face of economic hardship - as opposed to letting charlatan politicians put all the blame on already marginalized scapegoats.
Crashing the economy in order to put all the blame on already marginalized scapegoats may well be the point.
Re: 1929: Inside the Greatest Crash in Wall Street History
#48“The Great Depression: A Diary” is a great day by day first person account of someone living through the depression. It’s a great reminder how we don’t have a monopoly on insane politics https://www.goodreads.com/book/show/6601224-the-great-depres...
A book along similar lines: https://www.amazon.com/Not-Nickel-Spare-Sally-Cohen/dp/04399...
(haven’t read it yet so I can’t vouch for it)
Re: 1929: Inside the Greatest Crash in Wall Street History
#49Earlier quoted context omitted.
He's made a lot of predictions: Apple will acquire Disney (recent), Microsoft will acquire Yahoo (mid 2000s), we'd have a "hard landing" in 2023/2024. None of these have turned out true. It's especially hard to meaningfully evaluate claims of crashes.
Well, if I remember correctly Microsoft was very close to acquire Yahoo. So it means it made sense to do it. Even if you correctly predict the economic, political currents, sometimes it is up to the actions of individuals that are very hard to predict.
Oh great. Another Hari Seldon.
Re: 1929: Inside the Greatest Crash in Wall Street History
#50Earlier quoted context omitted.
How was the GFC worse? Not in unemployment rate. Not in losses to bank depositors, either. (As a kid, my mother lost money in a bank that went down in the Great Depression.) Not in business bankruptcies. In what sense was the GFC worse?
It was worse because we bailed out the banks, because they were too big to fail, teaching them the lesson that they can do stupid shit and not really pay and consequences. There's no number on that to compare to a different situation, but thems the breaks.
In at least some of those cases, the shareholders got nothing. We bailed out the depositors.