What's coming?6 Dec 2019 16:35
Prepare yourselves for unwanted g&e-mails (I get at least one a day) flooding your mobs and computers with daily doomsday scenarios of mrkts about to suffer the worst mauling since the '08 recession or the '87 crash, the '29 crash the 'Great Depression' or various other upheavals, offering you strategies to safeguard your investments.
What they never tell you is mrkts always recover very quickly certainly within 2 years of recent crashes anyways, though the '29 lasted a fair bit longer and heralded the depression of the late '30s followed by World War 2. That was the 'Big Nasty.'
The Dow hit bottom in July '32 tanking almost 90% to close at 41. It took 25 years for the Dow to recover to the pre crash level of 1929 and more than 40 years for daily volumes to match those of that 6 days of madness.
The '29 crash was part of the cause certainly but not wholly the cause. For the country had other problems. Businesses were not sound, workers were being let go, a contraction was underway, auto and house sales had stalled and the banking system was wobbly, many banks had folded with depositors savings vanishing into thin air. Greed, abuse, insider manipulation, 'pools' bidding up stock prices, boy plumgers and financial reporters bribed to write favourable stories on selected overpriced stocks which were then touted to the unsuspecting public. All these and other shocking disclosures were masked by the surging equity mrkt. The high tide of euphoria was about to be shockingky exposed.
The day of reckoning was nigh. The wobble started on Oct 24th when rumours of the Exchange closing panicked investors and by Bloody Monday Oct 28th and then on the 29th everything seized up the rout was over. Wall St had laid a rotten egg. The good times gave way to bad which eventually put 13 million Americans out of work in '33. After the crash businessmen sold Apple's on street corners, many lived in cardboard shacks along the Hudson River and Groucho Marx memorably said "the pigeons are feeding the people in Central Park."
American life would never be the same again and poor old Groucho was wiped out in the crash losing he said in his autobio "120 weeks of work at $2000 a wk"7
Irvine Berlin of "there's no business like the stock business" (just kidding) & "Alexander's Rag Time Band" fame lost $5m. Jokers abounded one wag said " blimey I got diabetes at 42"... to which another replied " thats nothing i got REA at 178" heh heh heh!
I guess most of us are wary of this 10yr bull run and kinda expect a correction which would be preferable to an outright 'out of the blue' '87 style crash. Of course mrkts & companies are very clever in covering up financial misdeeds until they get rumbled a la Lehman and (Bernie Madoff), then the whole can of worms slitheres out exposing how badly banks were exposed to the housing mortgage scams in California. Over indebted and over leveraged, crammed full of unsaleable assets they paid a very
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