Which "fake facts" would those be? While I do keep my eye on what Zeev's turnips are projecting, anything I post, I am responsible for, not Zeev, not you, nor anyone else. If my facts are in error, then it is my fault. If you want to insult someone, insult me. Slamming Zeev in criticizing my post serves no purpose. If you have a problem with him, take it up with him. When looking at history, there are always a variety of conclusions you can reach, and not surprisingly many are inconsistent.
As for my sources, I would credit them to a thorough reading of the periodicals of 1928-1930 including the WSJ and Barrons. Of course this reading was done 25 years ago, and it is indeed possible or even likely that the passing of time has influenced the accuracy of my data. <VBG>
There is no question that the market in 1929 fell from 380 to about 200, nor that it recovered to 300 by spring of the following year, a net 21% drop. The severity of the initial drop was no doubt increased by the huge importance of margin at the time, and the fact that you only had to put down 10%. A 21% drop from the peak of 9300 would put us at about 7350, by the way, and would not be alarming. The real trouble started in spring of 1930, when the Dow began a relentless drop from 300 to 60 by mid-1932. A similar performance today would take us to 1500.
So my question to you is, what do you think caused the drop from 1930 to 1932 and the depression, and how do you think it could have been prevented? I have stated that I believe the largest blame falls on the Smoot-Hawley tariff, and the second largest portion of blame goes to excessively restrictive fiscal policy. The fact that WWII was enough to pull the world out of depression is indication to me that more fiscal stimulus in 1930-32 could have prevented the recession from becoming a depression. You on the other hand have stated that you believe that fiscal policy and monetary policy were expansive in 1929 and 1930. Do you believe that the depression was unavoidable them?
Carl |
