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To: Rock_nj who wrote (47863)	1/24/2009 6:29:10 PM
From: Lizzie Tudor	Read Replies (5) \| Respond to of 57684

yeah, and we've had this bifurcation between growth stocks and traditional stocks into the nas and dow which we didn't have before. The nas has fallen that 80% off peak, from 5150 in 2000 to 1200 in 2002. Thats as bad as it gets. Then it has stayed flat since. Thats a typical bear. In the 20s, the S&P had a construction more like the nas, not all these "value stocks". There was no such thing as a value stock in the 20s, it was all growth. In 2002 when the nas fell apart to 1200 I saw that NYT columnist Floyd Norris on CNBC call the bottom and say it felt like 1974 to him that day, he was exactly right while nutcases like Fred Hickey were calling for ANOTHER 50% haircut. So taking that analogy, in 1974 there was another 8 years of pain for stock market investors until the great bull market took off in 1982. This feels similar.

To: Rock_nj who wrote (47863)	1/24/2009 8:39:44 PM
From: stockman_scott	Read Replies (1) \| Respond to of 57684

Crash of ‘29 Holds Eerie Lesson for Today in Ahamed’s Bank Epic Email \| Print \| A A A Review by James Pressley Jan. 23 (Bloomberg) -- If you worry that we’re sliding into another Great Depression, spend a few evenings with Liaquat Ahamed’s “Lords of Finance: The Bankers Who Broke the World.” This is narrative history at its most vivid, an epic portrait of how the predecessors of Ben Bernanke, Jean-Claude Trichet and Mervyn King helped shove economies into the abyss in 1929. The lessons to be gleaned are both spooky and reassuring, showing how today’s dynamics both do and don’t resemble what unfolded in that age of ocean liners and evening dress. Ahamed is a money manager who advises hedge funds including the Rohatyn Group. Holding up a not-so-distant mirror, he traces the rise and stumble of a quartet of central bankers, now mostly forgotten, which was once dubbed the World’s Most Exclusive Club. “The Great Depression,” he says, “was not some act of God or the result of some deep-rooted contradictions of capitalism but the direct result of a series of misjudgments by economic policymakers, some made back in the 1920s, others after the first crises set in -- by any measure the most dramatic sequence of collective blunders ever made by financial officials.” The members of that interwar banking club were Montagu Norman of the Bank of England, Emile Moreau of the Banque de France, Hjalmar Schacht of the Reichsbank and Benjamin Strong of the Federal Reserve Bank of New York. Together, they rebuilt the global financial engine after World War I. Then they wrecked the machinery by tethering it to the gold standard, a system famously denounced as a “barbarous relic” by John Maynard Keynes, this book’s fifth major character and, ultimately, its hero. Achieved Nothing Only when it was too late did Norman conclude that he and his fellow bankers had achieved “absolutely nothing.” Nothing they did, he wrote in 1948, “internationally produced any good effect -- or indeed any effect at all except that we collected money from a lot of poor devils and gave it over to the four winds.” Ahamed opens his account with Benjamin Disraeli’s admonition, “Read no history -- nothing but biography, for that is life without theory.” Taking that advice to heart, he writes the book as five biographies set against the turbulent backdrop of events stretching from World War I to Bretton Woods. His reportorial style has the Barbara Tuchman touch. Learned yet unpretentious, he dips into diaries, letters and cables to pull out evocative vignettes. Norman, for example, gives his new German counterpart a warm welcome by picking him up at London’s Liverpool Street Station at 10 p.m. on New Year’s Eve, 1923. “I do hope we shall be friends,” Norman tells the man who would one day be drawn into Adolf Hitler’s orbit. Velazquez Grandee Ahamed knows how to sketch characters with a few bold strokes. Norman had “a broad forehead and a pointed beard, already white”; he looked less like a banker than “a grandee out of Velazquez.” Schacht had a “clipped military moustache and brush-cut hair parted very precisely down the center”; he “could easily have passed for a Prussian officer.” The author is blunt about these bankers’ intellectual failure to grasp how an economy works. Yet he’s sympathetic to the challenge they faced in trying to reanimate shell-shocked economies burdened by reparation payments and war debts. Central bankers, he says, can resemble Sisyphus in Greek mythology -- condemned to roll a boulder up a hill, only to watch it roll down again. Like Alan Greenspan, the four men described here saw their apparent successes melt into failure. Reluctant Lenders Ahamed largely withholds explicit parallels with our own times until his epilogue. Yet the analogies are clear, notably in the Fed’s decision in 1932 to pump money into the banking system. “Banks, shaken by the previous two years, instead of lending out the money used the capital so injected to build up their own reserves,” he writes. The epilogue puts our troubles in perspective by reminding us of the magnitude of the 1929-33 meltdown. In that three-year period, the real gross domestic product of major economies fell more than 25 percent, he writes. A quarter of all adult males had lost their jobs. Commodity prices collapsed. How bad things will get today is unclear, though it’s hardly reassuring to see Microsoft Corp. cutting up to 5,000 jobs. But I agree with the Will Rogers joke that Ahamed cites: “If stupidity got us into this mess, then why can’t it get us out?” “Lords of Finance” is from Penguin Press in the U.S. (564 pages, $32.95). It will be published in the U.K. by Heinemann in April (20 pounds). (James Pressley writes for Bloomberg News. The opinions expressed are his own.) To contact the writer on the story: James Pressley in Brussels at jpressley@bloomberg.net. Last Updated: January 22, 2009 19:00 EST