A crash is coming, and it may be terrific... The vicious circle will get in full swing and the result will be a serious business depression. There may be a stampede for selling which will exceed anything that the Stock Exchange has ever witnessed…Wise are those investors who now get out of debt.
— Roger Babson, September, 1929
In the run-up to the 1929 crash, which heralded in the Great Depression, many pundits claimed that the new highs in the market signified that the business cycle had been “repealed.”
Stocks had never enjoyed such a bull market before, and this led many to believe that “the sky’s the limit.” All over the US, people put all the money they could find into stocks. Then, wanting to buy more, they bought on margin. Then, wanting still more, they borrowed privately to buy on margin - a double-dip into debt.
In essence, this meant that a large portion of the extreme bull market was the result of stock investments that were made with money that didn’t exist - a mere “promise” to somehow pay, with nothing to back that promise up.
This, of course, is the very essence of a bubble. And, sooner or later, bubbles pop.
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DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
4 comments:
INEVITABLE!! This is what amazes me about morons like jake day that think they should be spending city reserve funds on his personal popularity agenda
OMG. What do you expect him to do?? You gotta spend to get things done. You cry because he does nothing. Now you cry when he does. WTF. How about are asinine governor?? County council?? City council?? No it's Day's fault. Get a clue. The stock market is a gamble. Just like a casino. When the house wants it's money back. They will take it. PERIOD!! Nothing about some Mayor in a FREAKING LOWLIFE hick town is going to stop it. GROW UP SNOWFLAKE!!
@8:50 WTF are you talking about?? Yes absolutely criticizing Jake say for Salisbury MD upcoming shortfalls. Since when does constant warnings from economic leaders that the ridiculous imbalance in worldwide finances warrant you to go out and deplete what savings you do have? Wouldn't it be a more mature sensible reaction to save resources and prepare for the fallout? No snowflake here, my late grandfather lived through the depression and if we experience anything closely resembling that people like you will never make it!!
@8:50 since when is it a mature responsibility to provide social entertainment for the community as a whole?? Wouldn't it make more sense to provide stability?? I bet your getting so excited about this folk festival that is fout months away you piss yourself a little bit Everytime you think about it? This is about as stupid as Jake day's grand entrance paddling up to his mayoral podium with a half dozen "forced" city employees on hand to greet him
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