I know that some people pulled out before the crash back then; sensing something was amiss but I was wondering if the crash of 1929 itself was an unforseen and an immediate, surprise event. In other words were people completly blind sidded or were there murmurs and rumblings of needed "corrections" like we hear all over the place right now?

-- Adam Tershan (adamtersh@nospam.com), February 03, 2000

Answers

I've read up on several topics covering the Crash of '29. There were warning signs out there, but not much coverage with the media of the time, so people were indeed blind sided. I don't know if I buy into the comparison with today though..... sure, similiar situations, but still way different playing field from 80 years ago.....

-- Gary (gcphelps@yahoo.com), February 03, 2000.

Adam,

See this link about the late 1920's bull market:

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000mbl

Two things to keep in mind when reading this is that the annual unemployment rate for 1929 was 3.2%, and in the summer of 1929 (before the market crash), consumer prices were only about 1% higher than in the summer of 1928.

-- Linkmeister (link@librarian.edu), February 03, 2000.

well, I was only two at the time, so you'll have to forgive me for not knowing too much about the market.

-- elskon (elskon@bigfoot.com), February 03, 2000.

Get a copy of the book "the Creature from Jekyll island"....a history of the FED. It'll tell you all about that crash, well documented, and what was going on. TPTB knew all right, and the top guys had their money out of the market right before. The little guys were mostly blindsided.

-- lyn (lynhettler@hotmail.com), February 03, 2000.

Adam, there were indeed "rumblings", both in the years prior to 1929 as well as during that year itself. But most historians acknowledge that the warnings either did not reach the general public, as they were often of an academic nature, or what unease was communicated was overridden by the get-rich-quick exuberance of market players.

Here's a N.Y.Times link, with a following excerpt:

http://www.nytimes.com/library/financial/index-1929-crash-2.html

"Also like the 1990's, the rise in stock prices sparked warnings of excess from skeptics long before the actual top. Alexander D. Noyes, The Times' financial editor and probably the most respected financial journalist of the era, wrote a long and persuasive article comparing the 1920's ``speculative mania'' to previous manias and casting a skeptical eye on the ability of stock prices to continue rising. It was published on Nov. 15, 1925, nearly four years before the crash.

By 1929, such cautionary voices had been discredited, and the stock market had become a force unto itself, propelled by dreams -- and the reality -- of quick wealth. ``Playing the stock market has become a major American pastime,'' reported The Times in a magazine article published on March 24, 1929."

If you're interested, a compact paper on the main causes of the Great Depression is at:

http://www.escape.com/~paulg53/politics/great_depression.shtml

It's also interestig to note that Herbert Hoover, in his acceptance speech for the Republican Presidential nomination said, ""We in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us."

-- Bonnie Camp (bonniec@odyssey.net), February 03, 2000.

Essential reading: "The Great Crash 1929", J. K. Galbraith.

Essential warnings: 1. Those who do not learn their history are doomed to repeat it. 2. History never repeats, but it often rhymes.

(both are quotes, but I forget who from and may have mangled the exact words in my memory)

-- Nigel (nra@maxwell.ph.kcl.ac.uk), February 03, 2000.

Hi Adamn Just a quick note on '29. I've studied economics for many years, and my parents went through the missing 30's decade. But my understanding is that most people lost money in Trusts (Mutal funds of today), not directly involved in the stock market. And yes there were warning signs, but the media only gave people that which would tickle their ears. Justthinkin

-- justthinkin com (justthinkin@30s.com), February 03, 2000.

Read "A Fool and His Money" and "The Bear Book", both by John Rothchild, for an excellent perspective on forecasting and the market, including 1929 crash references. Yes, there were those who predicted doom. Unfortunately, in stocks, there are always bears who look wise in retrospect, just as bulls look foolish in retrospect, and in retrospect the 1929 crash was obvious. I would have thought by now a crash in (at least) the dot coms would be obvious, and I have been seriously wrong in predicting an immminent crash in them for over two years. I had a conversation with a friend 16 months ago in which I urged him to short Amazon, and had I taken my own advice, I would have lost my shirt.

I, for one, have given up trying to be right about where this market will go. I certainly know where a lot of stocks SHOULD go--into the crapper. Will they? With so much money coming into the markets?

Well, I wouldn't listen to me, if I were you, so where does that leave me? I have made more money over the past two years not listening to my conservative side--enough to cover a 50% drop now with a historically generous profit. Drives me crazy.

-- Imso (lame@prepped.com), February 03, 2000.

Hunt up "The Day the Bubble Burst" (it's listed but out of print on Amazon and it would be in your library. Library, yeah, the building with all the books, and a couple internet terminals with kids clustered around 5 deep), also "The Money Game" by "Adam Smith" I THINK this last was written by Paul Erdman using the historic "Adam Smith" pseudonym. Since they are BOTH from the 1970's they won't be pointing out the paralells, which will make reading them all the more scary.

Chuck

-- Chuck, a night driver (rienzoo@en.com), February 03, 2000.