Crash of 1929 vs. Today

Ummm.. yeah..

Ah ........ no.......... I live in China and you should see all the empty buildings and apts. but they keep building because they would have a revolution if they stopped. Even the government here admits 20,000,000 people have moved back to the countryside because they cant find employment in the city. In some cities to quiet the riots the went into the factories and paid the workers because the companies have no money to pay them. Americans think they have problems at 8% unemployment, most countries wish their unemployment was that low. Why do you think the dollar increased in value when things started to go south. We have the most stable economy and currency in the world. It is now estimated that 80% of China's fresh water is polluted and is not usable. American problems are puny compared with what is happening overseas.

Some interesting bar charts. Particularly the Dow Jones 1929-1933

http://alphatrends.blogspot.com/2008...rspective.html

Whoa... Andrew Jackson kicked ass ! Is it me or he did not like the banks ?

We could really use Old Hickory today.

Yup. He would have gotten rid of the Federal Reserve and all of the other regulatory bodies that caused this crisis.

If the housing bubble occurred because of a lack of regulation, why did it not occur in Huston, which has barely any land use or housing regulations?

I like how Peter Schiff puts it, "The FED spiked the punch bowl and everyone got drunk."

Easy money leads to easy lending leads to mania's and bubbles... Happened before and will probably continue to happen as long as there is a system of Fiat money I guess.

Here is an updated chart from 05/09/2009. Pretty interesting...

The 1930s Redux

http://www.kathylien.com/site/wp-con...s/calendar.png July 31, 2009- Kathy Lien


I found something really interesting about the similarities of some of the news headlines in July to that of the 1930s.
Here’s news from July 24 2009 and July 24 1930. The news from today’s Wall Street Journal has been inserted and bolded to show the similarities. History doesn’t repeat, but does it rhyme?
Thursday, July 24, 1930: Dow 239.33 +5.03 (2.1%)

Market commentary:
Market opened with large buy orders for major industrials. Many majors in early trading reached highest point of last week. Buying broadened to rest of industrials in late morning; upward movement continued almost all day. Some short covering seen. Car stocks strong, particularly GM; in spite of generally weak news. Utilities strong; amusement stocks dull. Banks and trusts weak.
Strong housing data combined with good earnings reports to spur a stock-market rally that pushed blue chips to a new 2009 high and the Nasdaq Composite Index to a winning streak unparalleled even in the dot-com bubble.
The Dow Jones Industrial Average leapt 188.03 points, or 2.1%, to 9069.29, helped by gains in components 3M, up 7.4%, and AT&T, up 2.6%. Both announced declines in profits smaller than analysts expected.
The most recent advance was powered by a combination of unexpectedly positive second-quarter corporate-profit reports and reassuring economic data.
3M Co., maker of Scotch tape and Post-it notes, said second-quarter earnings fell 17%; that was better than analysts were expecting. Its shares rose 7.4%.
Ford Motor Co. said it returned to profitability in the second quarter, with net income of $2.3 billion versus a loss of $8.7 billion the previous year. That profit was the result of a $3.4 billion boost from restructuring debt. Without the one-time gain, Ford would have posted a loss, but a smaller one than the previous year. Ford stock was up 9.4%.
Prominent brokers, rumored to be supported by banking interests, recommended buying sound industrial stocks. Believe this month marks the bottom of the industrial recession and stocks are likewise scraping bottom. M.J. Meehan & Co. expressed confidence in industrial outlook and recommended investment in representative stocks at current prices.
On Monday, Goldman’s once-skeptical strategist David Kostin told clients he expects the S&P 500 to hit 1060 by year’s end, up from 940 previously. He boosted his overall estimate for profits at S&P 500 companies
MMM – BofA Merrill upgrades to Neutral from Underperform

L.G. Federman, Pres. Interstate Dept. Stores, believes “Business in general hit bottom last month,” and likewise for commodity prices. “Both are now picking up and I am confident the advance will rapidly gain momentum.”

How’s the economy, you ask? I have the proverbial good news and bad news, but in this case, they’re exactly the same: The U.S. economy appears to be hitting bottom…. Furthermore, there is a reasonable chance—not a certainty, mind you, but a reasonable chance—that the second half of 2009 will surprise us on the upside. (Alan Blinder, editorial page)
Conservative observers remain cautious; believe broker recommendations have so far attracted traders looking for quick profits, not long-term investors and general public. Recommend not reaching for stocks but buying leading issues on declines. Immediate outlook uncertain, but longer term considered encouraging.
Some traders wonder how durable the stock gains will be, noting persistent weakness in employment and corporate revenue that hasn’t shown much improvement even as profits have risen.

Second-quarter earnings so far better than expected. Third-quarter predictions are difficult; current business is below second-quarter average; if seasonal pickup does not develop until September, as leading authorities expect, the improvement won’t be reflected in third-quarter earnings.
As for earnings, based on results from just under one-third of the country’s biggest companies, 76% have surpassed analyst estimates, according to Thomson Reuters. Although that percentage could weaken in coming weeks, it currently eclipses the 73% recorded in the first quarter of 2004, the highest since Thomson Reuters began tracking that percentage in 1994.

Economic news and individual company reports:

Deposits at member banks up $1.494B to $21.317B in past six months. Similar increase to 1924, which was soon followed by business revival; caused by easy money policies of Reserve banks. However use of the money has been different from 1924; banks then increased commercial loans, but now there’s been a large decrease in commercial loans and large increase in security loans and investments; easier credit policy has so far failed to increase demand for business credit. However, if a recovery does come, the Fed would be reluctant to allow rates to rise; necessary expansion in Reserve credit could then lead to inflation.
Current interest rates: Fed. Reserve NY discount 2.5%; commercial paper 3.25%-3.5%; 90-day bankers’ acceptances 1.875%; call loans 2%.
First 8 rails reporting June earnings total $10.368M, down from $10.912M in May and $14.137M in June 1929.
The country’s two biggest rail operators said the dramatic drop in freight volumes over the past year has begun to stabilize, but that a full-fledged recovery in demand for shipping remains well out of sight.
Posting second-quarter earnings that sagged because of slack demand for shipping, Burlington Northern Santa Fe Corp. and Union Pacific Corp. both said they see no clear signs of an imminent rebound in business. In spite of recent improvement in demand for certain shipments, both rail operators expect a slow recovery.
Burlington Northern, based in Fort Worth, Texas, and the country’s biggest rail operator as measured by revenue, said earnings for the period were buoyed by a charge that hurt second-quarter earnings in 2008. Net income climbed to $404 million, or $1.18 per share, a 15% increase compared with $350 million, or $1 per share, a year earlier. Excluding the 2008 charge, earnings declined 10% compared with a year ago. Revenue fell to $3.32 billion, down 26% from $4.48.
Union Pacific, based in Omaha, Neb., said net income during the quarter fell to $468 million, or 92 cents per share, from $531 million a year earlier. Revenue during the period dropped to $3.3 billion, compared with $4.6 billion a year ago.

Yeah, but that chart from May no longer has correlation to 1929. A gold bug site is not exactly impartial when it comes to analyzing what the stock markets are/are not doing.

True a gold bug site may not be as impartial as one would like, but at the same time they don't out and out lie like a CNBC or other network... Also in 1929 the Fed didn't get involved with the printing press to level it has these days. So I guess the Dow can look like it is going higher because of inflation. I know inflation vs. depression, but there are some really strange thing going on... In the 1970's they had to come up with a new term, stagflation. So who knows if a new term will need to be made up for what is going on now. Some claim a hyper-inflationary depression? Sounds nasty, if something like that pans out.

I do think that we will see a 1:1 dow:gold ration though.

I agree with this. Look at the big clunker sale going on. Now this is our governments way to help. They want you to turn in a fully paid car to buy a new one and get deeper into debt. This logic makes me sick.

I was watching something and "they" were talking about bulldozing homes becomes there is too much inventory. This is "their" idea on how to prop up home prices. All the while homeless middle class people are moving into tent cities.

"They" are not putting guns to anyone's head to buy a new car.

And bulldozing homes rather than have them get vandalized and become eyesores bringing down the value of other homes in an area makes more sense than turning them over to someone who doesn't have the money to even pay the light bill.

I can only shake my head in disgust when I read posts like these-It doesnt come as any surprise u live in Florida either-Shit always flows south.

that is funny... Here is a tip Did you know that only 2% of the institutions make up 75% of the volume? Did you know that 45% of the worlds wealth has evaporated since 2007?

why is the stock market on a run? well because look at how they are saving cash by lay-offs and other cut backs... Joke at best... We will not recover until 2015 or 2020... The more the GOV gets involved the deeper and longer this DEPRESSION will last. The next 2-5 years we will see inflation as the fed is running out of tools.

What? WTF is that in reference too. Not what I posted.

Never mind not worth it here just carry on with it