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1929: Inside the Greatest Crash in Wall Street History

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Re: 1929: Inside the Greatest Crash in Wall Street History

#81

Post by fuzzfactor »

panick21_ wrote: post #77

People often mix up the 1929 crash with the great depression. Those things are related but not strongly so. A stock market crash does not lead to a major recession or depression. The initial crash was worse in 1987 then in 1929. But in late 80s there was no recession. So crashes are bad for people who have invested but it looks much more like a bubble in hindsight because of how it turned out. Lots of good companies…

After 1929, nothing even came close until 1973 finally rolled around:

https://en.wikipedia.org/wiki/1973%E2%80%931974_stock_market...

This one did result in a recession, during which some people who had lived through the Great Depression once again had to live about the same way again, for years, whether you wanted to call it another depression of not.

In 1987 and 2008 those were highly measurable stock drops but mostly concentrated in the stock markets themselves. Without as much consumer exposure, nor the world-destroying ripple effects from more dramatic drops over a longer period of time under conditions that were magnitudes more unstable worldwide.

Re: 1929: Inside the Greatest Crash in Wall Street History

#82

Post by anovikov »

bitwank wrote: post #6
simonsarris wrote: post #4

Earlier 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.

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.

What's more important is that before the crash there was a period of crazy market growth. So averaged out over ~10 years it didn't look all that bad. Especially accounting for deflation that happened in the same time.

Arguably people who got caught in 1970s bear market had it worse.

On the other hand, in 1970s no one got hungry - in 1930s they totally did - but it had very little to do with the stock market, agricultural crisis was because of unexpectedly quick recovery of European crops after WWI and consequential overproduction of US farms (i.e. production that they assumed will be easy to sell to Europe, found itself without market), that precipitated crisis of bad debt, attempts to compensate prices with quantity, even more bad debt as a result, and ecological disaster due to overexploitation of soil - but stock market had nothing to do with it.

Re: 1929: Inside the Greatest Crash in Wall Street History

#83

Post by p1esk »

hdgvhicv wrote: post #79
p1esk wrote: post #58

Earlier quoted context omitted.

In this scenario I would take that 200k (or whatever there would be), and move to some low COL country.

You’re assuming that the US dollar retains a decent value and that foreign countries will put up with you for your wealth.

I’m assuming US dollar will have more value abroad than here.

Re: 1929: Inside the Greatest Crash in Wall Street History

#84

Post by panick21_ »

fuzzfactor wrote: post #81
panick21_ wrote: post #77

People often mix up the 1929 crash with the great depression. Those things are related but not strongly so. A stock market crash does not lead to a major recession or depression. The initial crash was worse in 1987 then in 1929. But in late 80s there was no recession. So crashes are bad for people who have invested but it looks much more like a bubble in hindsight because of how it turned out. Lots of good companies…

After 1929, nothing even came close until 1973 finally rolled around: https://en.wikipedia.org/wiki/1973%E2%80%931974_stock_market... This one did result in a recession, during which some people who had lived through the Great Depression once again had to live about the same way again, for years, whether you wanted to call it another depression of not. In 1987 and 2008 those were highly measurable stock drops but mos…

> In 1987 and 2008 those were highly measurable stock drops but mostly concentrated in the stock markets themselves.

But my point is exactly, how do you know that 1929 wasn't just like them? My whole point is that what actually matters is what happens after the crash.

1929 was special because of structural issue in the inter-war central banking system, but the right action could still have result in a strong bounce back where by latest 1931 would have been done.

Re: 1929: Inside the Greatest Crash in Wall Street History

#85

Post by guzfip »

techgnosis wrote: post #74

I read 1929 and my main takeaway was how unlikely it is for us to have a crash of that magnitude again. The differences between then and now are stark. First, everybody was buying shares on margin. Everybody. Random lower class households were buyings shares on 10:1 margin. They had door-to-door salesmen pushing shares on uneducated households. Second, nobody was talking about market cap. The whole world revolved aro…

> They had door-to-door salesmen pushing shares on uneducated households.

What is RobinHood, et al.?

Re: 1929: Inside the Greatest Crash in Wall Street History

#86

Post by fuzzfactor »

panick21_ wrote: post #84
fuzzfactor wrote: post #81

Earlier quoted context omitted.

After 1929, nothing even came close until 1973 finally rolled around: https://en.wikipedia.org/wiki/1973%E2%80%931974_stock_market... This one did result in a recession, during which some people who had lived through the Great Depression once again had to live about the same way again, for years, whether you wanted to call it another depression of not. In 1987 and 2008 those were highly measurable stock drops but mos…

> In 1987 and 2008 those were highly measurable stock drops but mostly concentrated in the stock markets themselves. But my point is exactly, how do you know that 1929 wasn't just like them? My whole point is that what actually matters is what happens after the crash. 1929 was special because of structural issue in the inter-war central banking system, but the right action could still have result in a strong bounce b…

That is a good point, crashes are going to happen, and what occurs afterward is what counts the most.

I think what everyone still living can observe is what did actually happen after each crash, using after-the-fact well-curated data having good-to-moderate degrees of provenance.

Going back to 1929, very little first-hand observation from before the crash is still available, and most people at the time didn't understand the implications either. When I was growning up though, my neighborhood was crowded by people from all walks of life who had been through it, before, during, and after. I would say many of their experiences have been unpublished probably because lots of them were "unpublishable."

With 1973, I had already been a teenage stockbroker well before that and I remember it well. The Nixon shitshow had been building for years. Presidential malfeasance can do damage like few other things, even worse when it's a US President which puts the dollar itself at stake.

So my observation is what happens before the crash has more influence on what happens afterward, compared to the steepness of the crash itself.

Re: 1929: Inside the Greatest Crash in Wall Street History

#87

Post by hdgvhicv »

p1esk wrote: post #83
hdgvhicv wrote: post #79

Earlier quoted context omitted.

You’re assuming that the US dollar retains a decent value and that foreign countries will put up with you for your wealth.

I’m assuming US dollar will have more value abroad than here.

Given your government is trying very hard to relive the global demand for the US dollar and thus repatriate the trillions of dollars held outside the US that seems very unlikely.

Re: 1929: Inside the Greatest Crash in Wall Street History

#88

Post by panick21_ »

fuzzfactor wrote: post #86
panick21_ wrote: post #84

Earlier quoted context omitted.

> In 1987 and 2008 those were highly measurable stock drops but mostly concentrated in the stock markets themselves. But my point is exactly, how do you know that 1929 wasn't just like them? My whole point is that what actually matters is what happens after the crash. 1929 was special because of structural issue in the inter-war central banking system, but the right action could still have result in a strong bounce b…

That is a good point, crashes are going to happen, and what occurs afterward is what counts the most. I think what everyone still living can observe is what did actually happen after each crash, using after-the-fact well-curated data having good-to-moderate degrees of provenance. Going back to 1929, very little first-hand observation from before the crash is still available, and most people at the time didn't underst…

In general I think the larger point is that the 'crash' is the point people in their mind associate it with the 'period after'. That is a sensible way for humans to think in most situation. And its not unreasonable for everyday people.

But if we are discussing economics we need to understand that the link between 'crash' and 'recession' is complex. You can have a country going into recession without a 'crash' and you can have a 'crash' without a recession.

Re: 1929: Inside the Greatest Crash in Wall Street History

#89

Post by Timwi »

keiferski wrote: post #70
eszed wrote: post #64

Earlier quoted context omitted.

The Wind is Rising , by HM Tomlinson. It's a diary of the first year or so of the second world war. It has an unforgettable first line: "All we hear from Berlin is the music of marrow bones and cleavers," and is similarly vivid throughout. It looks like you can borrow it from archive.org, but I suggest buying a physical copy. It was printed in 1941 - and I don't believe ever had a second edition - so it's on thin, wa…

Interesting how there is so little information about this book online. It’s a good reminder of how a ton of stuff basically still isn’t on the internet and is still only accessible in old books.

(in no small part due to copyright law)

Re: 1929: Inside the Greatest Crash in Wall Street History

#90

Post by kombookcha »

eszed wrote: post #64
hydrogen7800 wrote: post #14

Earlier quoted context omitted.

I read this more than 10 years ago, so I don't remember a lot, but I do appreciate it for being the only account of the crash that doesn't have historical hindsight. It was interesting to hear someone trying to make sense of things on a near daily basis during the fog of uncertainty. It makes me want to find other such accounts of historical events without the inevitable-seeming cause and effect sequence of events yo…

The Wind is Rising , by HM Tomlinson. It's a diary of the first year or so of the second world war. It has an unforgettable first line: "All we hear from Berlin is the music of marrow bones and cleavers," and is similarly vivid throughout. It looks like you can borrow it from archive.org, but I suggest buying a physical copy. It was printed in 1941 - and I don't believe ever had a second edition - so it's on thin, wa…

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