Make visible what, without you, might perhaps never have been seen.
- Robert Bresson
Originally posted by Michael Ernest:
Those are merely forward-looking statements and not intended as assurances of any sort that they contain fact or reasonable assumptions of market realities.
SCJP1.4, SCWCD
Originally posted by Alfred Neumann:
The 1929-31 stock market crash was unprecedented in many ways. It was not based upon a speculative bubble akin to the Tulip Bulb craze or the South Seas bubble. ...
Make visible what, without you, might perhaps never have been seen.
- Robert Bresson
Originally posted by Michael Ernest:
I'd say the crashes of '87 and '29 look familiar in most respects, with the exception that the margins allowed in trading during the late 20's is no longer permitted without checking for actual assets to back them up.
Associate Instructor - Hofstra University
Amazon Top 750 reviewer - Blog - Unresolved References - Book Review Blog
Originally posted by Thomas Paul:
And of course the effect on the economy was different. The crash of '87 did not spin the country into a recession and the markets stableized quickly after the crash. The Dow regained all of its lost wealth within two years. Why the difference? The major difference was that the markets were not heavily margined as in 1929. Also, the Fed tightened the money supply after the 1929 crash making things even worse.
Originally posted by Thomas Paul:
So the difference is that with a 20% drop in the market, the person who invested on margin is wiped out. The person who didn't invest on margin still has 80% of their wealth.
Originally posted by Thomas Paul:
Personal note: I remember Black Monday very well. I was a COBOL porgrammer for Dean Witter, Reynolds Inc. at the time. We spent the entire day staring at the tickers. We knew we were watching history. I was interviewed for TV (one of those "man on the street" things) on the Friday before Black Monday after the market had dropped 100 points. I said that the market was made of sheep and the sheep were panicking.
SCJP1.4, SCWCD
Originally posted by Alfred Neumann:
In the internet age I have to wonder whether the regulation will work anymore. What can the SEC do to brokers operating out of the Grand Cayman islands on the internet, for example? Nothing I suspect. So if people want to use 20's-style gearing today they probably can. Easily. Then there are derivatives. Casino gambling is still with us....
That would be Black Monday, 1987.Originally posted by Alfred Neumann:
Didn;t know they had COBOL and TV back then, Tom. I know COBOL is ancient, but that ancient?
Originally posted by Alfred Neumann:
A non-leveraged investor who bought and held the average stock in 1929 lost 87% of their investment by 1933. 13% is better than 0, but not much better. I suspect that was where the real damage occurred.
In the internet age I have to wonder whether the regulation will work anymore. What can the SEC do to brokers operating out of the Grand Cayman islands on the internet, for example? Nothing I suspect. So if people want to use 20's-style gearing today they probably can. Easily. Then there are derivatives. Casino gambling is still with us.....
Associate Instructor - Hofstra University
Amazon Top 750 reviewer - Blog - Unresolved References - Book Review Blog