since you mention the investment trusts of the 20's, there's an interesting little historical tidbit i'd like to share, that ties in with the big 'cash on the sidelines waiting to jump in' myth.
on the weekend before the crash of 1929, a certain atmosphere of foreboding was certainly discernible...after all, the week before, the Dow had just suffered its biggest one-day price break ever, which was however recovered fully, due to the intervention of the bankster cartel, in what was then known as 'organized support'. it was remarkably similar to the action of the NAZ on April 4 btw.
anyway, on the weekend before the BK, the air was rife with rumors, mostly bullish ones. one of those rumors centered on the fact that the investment trusts had sizeable cash reserves that were supposedly to be deployed come Monday...the 'cash on the sidelines'. there was talk of huge buy orders waiting to pounce to 'take advantage of the greatly reduced prices'. the incantations of optimism over that weekend look almost funny in retrospect. the brokers even put ads into the papers urging people to buy as soon as the market opened on Monday. the 'sound fundamentals' were praised from every quarter, including president Hoover. businessmen,brokers, banksters, they all chimed in.
then came Monday and the panic began in earnest to everybody's vast surprise. on the evening following this fateful day, the banksters consortium that had rescued the market from the break it had suffered the preceding Thursday, still insisted that there was hope, though they didn't say why. another funny tidbit is that instead of being concerned with rescuing the market again (it was commonly believed they would do so again, come Tuesday!), they were only concerned that the decline be 'orderly'. now where have we last heard of 'orderly' declines? that's right, TODAY on tout TV. of course on Tuesday the willy-nilly panic continued without delay.
to come back to the trusts, after the market had crashed, it turned out their cash reserves were not going to be used to buy other stocks than their own - their primary concern was the precipitous decline in their own stocks, and they had heavily invested in each other to boot. so they wasted what cash they had to support their own stocks.
interestingly, the suckers rally off the crash low which was precipitated by Rockefeller announcing that he was buying, brought forth a renewed burst of optimism lasting until it became clear by mid '30 that the fundamentals had begun to deteriorate sharply. the optimistic propaganda from economists, the financial press and the administration continued while the market resumed its slide (sort of like the search for the NAZ low now).
it was of course replaced by deep pessimism once the low of '32 was reached, a 90% wipe-out accompanied by industrial output falling back to levels last seen in 1886.
when it was finally time to buy the dip, no-one wanted to do so anymore, and volume on the NYSE had shrunk to roughly 1/20th of the heady days of 1929. |
