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From a stock market perspective it took a year and a half from top to bottom with a number of short lived upswings. True recovery took 20 years.
Late 20's, manufacturing, especially steel had been on the upswing for too long and speculation took over. When it slowed it caused a credit collapse, massive margin calls, and a run on the banks.
I don't think it is comparable at all. Latest estimation is 1.14 quadrillion dollars of derivatives that have been placed on the real estate of a country that now only manufactures money and even more real estate that no one wants. Taking into account inflation, the amount of speculation and monopoly money right now is hundreds of times bigger than wall street could have ever imagined in the 20's.
Transwiki:American History quotes Stock Market Crash - Wikiquote
From the above:
1929 “The fundamental business of the country, that is production and distribution of commodities, is on a sound and prosperous basis.” President Hoover, in a press conference on October 30, the day following the Stock Market crash.
From a stock market perspective it took a year and a half from top to bottom with a number of short lived upswings. True recovery took 20 years.
Late 20's, manufacturing, especially steel had been on the upswing for too long and speculation took over. When it slowed it caused a credit collapse, massive margin calls, and a run on the banks.
I don't think it is comparable at all. Latest estimation is 1.14 quadrillion dollars of derivatives that have been placed on the real estate of a country that now only manufactures money and even more real estate that no one wants. Taking into account inflation, the amount of speculation and monopoly money right now is hundreds of times bigger than wall street could have ever imagined in the 20's.
In the 20's the allowed people to trade on margin. Many people who could not afford to speculate did thanks to having a margin account.
Doesn't that sound all too familiar with the subprime mess and HELOCS ?
Lax regulations allowed people to take on debt they really could not afford.
this is the biggest fear, that the bailout will just drag the economy on like what happened in Japan. Infact our bailout policy is very similar to the Japanese financial crisis. If it drags on then it will be hell for a long time.
Actually the bailout plan, along with all the other bailouts are putting us in a soft crash vs a hard crash IMO. They might pull it off though and avoid depression. But at what cost ? hyperinflation ?
In the 20's the allowed people to trade on margin. Many people who could not afford to speculate did thanks to having a margin account.
Doesn't that sound all too familiar with the subprime mess and HELOCS ?
Lax regulations allowed people to take on debt they really could not afford.
A 1 to 1 margin account is fine. I use one all the time. Subprimes are fine. Helocs are fine. MBS are fine. Those are all yesterdays buzzwords and the problem is much bigger.
In fact, none of those previous products would have caused a major problem if they stopped there. But no, they leveraged 100s of magnitudes larger because the debt was rolled up into CDS insurance policies that were then loaned out at 100 to one which were rolled up into more insurance policies and that fictional money was loaned out. It was debt on top of debt ad infinitum with a micro asset 10 levels back that can never be valued or defined. Its a paperwork stack that owns america many times over but is based off of almost nothing.
We should look at the manufacturing slowdown of the great depression with envy.
A 1 to 1 margin account is fine. I use one all the time. Subprimes are fine. Helocs are fine. MBS are fine. Those are all yesterdays buzzwords and the problem is much bigger.
In fact, none of those previous products would have caused a major problem if they stopped there. But no, they leveraged 100s of magnitudes larger because the debt was rolled up into CDS insurance policies that were then loaned out at 100 to one which were rolled up into more insurance policies and that fictional money was loaned out. It was debt on top of debt ad infinitum with a micro asset 10 levels back that can never be valued or defined. Its a paperwork stack that owns america many times over but is based off of almost nothing.
We should look at the manufacturing slowdown of the great depression with envy.
Yes..but all we have today is GM and Ford and look at them.
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