Tuesday, Aug 14, 2007
History: Life is unfortunately a cycle - Will it happen again? 1929 & 2007
www.stock-market-crash.net: Wall Street Crash of 1929
I read this article with interest and it is fascinating how similar things are today as they were 77 years ago. The “Roaring Twenties” was fueled by increased industrialization and new technologies, such as the radio and the automobile. Air flight was also becoming widespread, as well. The economy benefited greatly from the new life changing technologies.
Posted by steve dee @ 10:21 AM (129 views) Add Comment
6 Comments
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1. The Capitalist said...
You are right. Also check out this guy on You Tube - a maverick voice of sanity about investments, markets and inflation...
Zapata George
http://www.youtube.com/watch?v=HiW2-hygtzU
2. dohousescrashinthewoods said...
I think, with all the hardships and disenfanchisement that various people feel here - feelig left out and powerless and consequently somewhat bitter about the generation above who seem to have it all sorted - that major turmoil would provide enough disruption to generate opportunities.
If it gets bad, howerver bad it gets, keep leeking for opportunities. However cheesy this sounds, those who can seize the day while it is still dark will enjoy the dawn of a new era. (If that is indeed what is happening)
3. george monsoon said...
In the 20's was the rest of the world as tied into each other as it is now?
I am wondering what the effects of a complete global meltdown in the stockmarkets would have?
4. Orwell said...
I think we have a few property 'millionaires' at the mo who live on that alone..
5. Red Kharma said...
The Dow only fell from 400 to 145 in 1929. It is no fun losing 65% of your money, but that wasn't the problem. The problem was high leverage. If I understand correctly, derivative instruments are "worth" around 10 times the value of the underlying assets currently which is clearly a source of potential problems. The 1929 stock market seems closer to the property markets to me. Tiny deposits (or none), huge leverage. i.e. 20 times plus for most mortgages, interest only mortgages, borrowing on this equity to fund 2nd homes, holiday homes and BTLs. High leverage/debt is what makes money and what destroys money, not simply market falls in the underlying assets.
6. inbreda said...
I am interested in being self sufficient and my missus has just bought me a book called "Ten Acres Enough - The classic 1864 Guide to Independent Farming" (Yes, 1864!!!). I'm only on page 15 but I'd like to quote from page 1...
"...The crisis of 1837 nearly ruined me... Previous to this crisis, necessity had driven me to the banks for discounts, one of the sore evils of doing business upon insufficient capital. As is always the case with these institutions, they compelled me to return the money at the very time it was least convenient for me to do so. - they needed it as urgently as myself. But to refund them I was compelled to borrow elsewhere, and that too at excessive rates of interest, thus increasing the burden while labouring to shake it off.
"Thousands have ... been crushed by the load. Yet I was not insolvent. My property had cost me far more than I owed, yet if offered for sale at a time when the whole community seemed to want money only, no one could have been found to give cost. Hence I struggled on through that exhausting crisis haunted by perpetual fears of being dishonored at bank, -lying down at night not to peaceful slumber, but to dream of fresh expedients to preserve my credit for tomorrow. I have sometimes thought that the pecuniary cares of that struggle were severe enough to have shortened my life, had they been much longer protracted."
Goodbye BTL!!!