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A week of historic desperation on Wall Street

Discussion in 'The Economy' started by Tropo, 18th Nov, 2008.

  1. Tropo

    Tropo Well-Known Member

    17th Aug, 2005
    A week of historic desperation on Wall Street
    Commentary: Current conditions have that 1929 feel

    Like the investing elite of 1929, today's celebrity investors are taking a beating. It's no wonder some of them, such as Buffett, have been urging investors to buy U.S. stocks because they look cheap.
    Stocks looked cheap on Oct. 25, 1929, as well, after banks led by J.P. Morgan & Co. (JPM:JPMorgan Chase & Co) tried to stem the tide by buying.

    By the way, the Dow Jones Industrial Average was down 7.7% through Wednesday and the S&P 500 is down 10% since Buffett's recommendation.

    ..........It took Wall Street 18 years to achieve its pre-crash levels, but the industry itself was forever changed. Depression-era lawmaking separated banking from investment banking. The Securities and Exchange Commission was formed.
    And, forgive me, but remember what happened to the Durants and the Meehans and the Mitchells of those days?
    Durant emerged from the cash almost penniless and was forced to live on a small pension from GM. Mitchell was forced to resign from National City and was prosecuted throughout the 1930s for his actions in the market during the 1920s. Meehan was barred from the business.
    It just takes a week of news from Wall Street to realize how much is history is repeating itself.
    Of course, some will argue that it's changing forever. Galbraith would probably write the idea off as the nature of mass illusion, too{EDF312AC-885E-4872-9786-28481463DCF0}
    Last edited by a moderator: 18th Nov, 2008
  2. bennymarsh

    bennymarsh Well-Known Member

    10th Nov, 2007
    Sydney, NSW
    Yeah, but a lot of it is forced selling by US hedge funds. Investors like Buffet will be shown to have bought a lot of quality companies at cheap prices, whereas those who are panicking and forcing the selling will never recover the money they lose and will be bitter and twisted for the rest of their lives ie the same as the depression generation who were always frugal!