Jeff's Editorial #86 – Market crash 1929...

This week marks the 80th anniversary of "Black Tuesday," Oct. 29, 1929, which is considered the climax of the stock market crash that preceded the Depression, and a day that changed America's economic history. America's Great Depression was a ripple effect of the Great Stock Market Crash of 1929, which bankrupted much of America.

It took over a year after the crash that the recession turned into the Great Depression which could not be forecasted. Hoover tried his best to take some actions that Obama is trying now, but Hoover, unfortunately, did not have all of the economic regulations and policies that we have now. He believed in the true spirit of cooperation among neighbors, friends, and community to help out those who needed help, not the government, but the tide of unemployment reached 25% by 1932, and overwhelmed their economy.

Do you think that the market crash of late 2008 to early 2009 can lead to a bigger recession and perhaps a depression in 2010 and beyond?

Dow is 9,868 points and S&P 500 index is 1,067 at the time of writing.

Comments: 15

Gina Raffa Oct 27, 2009, 9:11pm EDT

I dont think there will be another depression for about another 15-20 years, but yes, of course there will be another one. History tends to repeat itself, all the time

Jeff S. Oct 27, 2009, 9:46pm EDT

If you review the Dow Jones charts of 1929 - 1931 and another of 2008 - 2009, there is an uncanny resemblense in the way the market climbed up (381), then dipped in October 1929 (down to 230) and September 2008. Then the market recovers dramatically in the next seven months (up to 290), then descends down to below 60 over the next few years.

I hope this scenario does not repeat.

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Tim Nelson Oct 28, 2009, 10:42am EDT

Only the high unemployment rate, some stock markets will actually do quite well.

Jeff S. Oct 28, 2009, 12:48pm EDT

As of noon 10/28/09, NASDAQ index is down 5% in 5 days.

Tim Nelson Oct 28, 2009, 3:54pm EDT

My IRA's are about the only thing doing well for me. I'm still unemployed, but my IRA's went up 35% year to date. I'm just back from my 6 month portfolio review this afternoon.

Jeff S. Oct 28, 2009, 8:19pm EDT

I'm glad you're winning at this game

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Peter Joseph Swanson Oct 28, 2009, 4:00pm EDT

We would have had a collapse of everything but there was a stimulus (Hoover didn't know to do that and treated it for inflation which made it worse) and there's also bank rules now since then, to prevent runs on the banks. We have learned from history in what to do when the collapse happens.

Jeff S. Oct 28, 2009, 8:24pm EDT

There are many differences in our economic environment since 1932. Major changes were instituted by FDR, such as FDIC, Social Security, SPIC, and minimum wage. Since then others instituted Medicare, Welfare, Regressive, then progressive income tax, etc. So we seem to be better off than 2009, but are we really? I recommend watching the Frontline aired on Oct 20, 2009.

Peter Joseph Swanson Oct 29, 2009, 11:34am EDT

Was that the one with the people in the beauty parlor ???

FAMatch - FinancialAdvisorMatch Oct 29, 2009, 11:35am EDT

I think the very fact that we have more value in our ecomoy will avert Great Depression-like conditions. We have a lot more of a cussion and a lot more forms of protection. I think this recession will take a while to recover from, but I don't see anyone lining up at the breadline just yet.

Jeff S. Oct 29, 2009, 12:28pm EDT

Peter, the episode I refer to is entitled, "Warning," at PBS.org http://www.pbs.org/wgbh/pages/frontline/warning/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid

Peter Joseph Swanson Oct 29, 2009, 1:14pm EDT

I have slow speed, but I've seen a lot of the shows.

I usually only watch PBS shows.

Jeff S. Oct 29, 2009, 3:00pm EDT

I never say never, but I expect that the chance of 1932-like Great Depression has a very low chance of occurring. But tell that to the people who are unemployed now.

Peter Joseph Swanson Oct 29, 2009, 6:19pm EDT

The unemployed won't get any relief soon. This year is still crash and burn. Next year is piecing it back together. No hope for the unemployed until a year after next.

That's my guess.

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*Carol ~Bronx Southern Belle D. Nov 9, 2009, 8:27pm EST

Actually, I have faith in this country that we just have to ride these things out. As for unemployment, it's sad.

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Jeff's Editorial #86 – Market crash 1929 vs. 2009: Do you think Great Depression can repeat?

Comments: 15

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