Skip to comments.Scary 1929 market chart gains traction
Posted on 02/11/2014 9:39:48 AM PST by Straight Vermonter
CHAPEL HILL, N.C. (MarketWatch) There are eerie parallels between the stock markets recent behavior and how it behaved right before the 1929 crash.
That at least is the conclusion reached by a frightening chart that has been making the rounds on Wall Street. The chart superimposes the markets recent performance on top of a plot of its gyrations in 1928 and 1929.
The picture isnt pretty. And its not as easy as you might think to wriggle out from underneath the bearish significance of this chart.
I should know, because I quoted a number of this charts skeptics in a column I wrote in early December. Yet the market over the last two months has continued to more or less closely follow the 1928-29 pattern outlined in that two-months-ago chart. If this correlation continues, the market faces a particularly rough period later this month and in early March. (See chart, courtesy of Tom McClellan of the McClellan Market Report; he in turn gives credit to Tom DeMark, a noted technical analyst who is the founder and CEO of DeMark Analytics.)
(Excerpt) Read more at marketwatch.com ...
Scouts Out! Cavalry Ho!
Scouts Out! Cavalry Ho!
If you dig into the episode....which few historians really get into finance details....there’s this drop a day or two prior to the big drop....and it appears that a small number of individuals knew of some big calamity coming in the days ahead, and shed their accounts....walking away.
I should also point out in 1914....just after the crown prince is killed from the Hapsburg Empire.....the British stock market fell apart in just a matter of a day or two. Almost no historian will touch that story today....but for a brief time (several days)...banks across England went into holiday status, and most people expected absolute failures to occur. We never hear about that episode.
Lot of things about this era of 1900 to mid-1930s....we just seem to lack real history on or understanding. It’s funny....we know more about 1865....than 1929.
This is an example of how gamblers lose money when they think they found a system.
The 1928-29 chart has a low of 200 and a high around 380. The market lost nearly half its value,
The 2014 chart has a high of 16,400 and a low of 12,400, or about 1/4 value lost, if we draw the lines in parallel.
That’s it! I’m cashing in my retirement funds and going off the grid.
I’m very suspicious of ANY market advice from people who are themselves heavily invested in the market. There are people right now who stand to make a great deal of money if the market goes down. Likewise if it goes up. I’m not saying these folks always have ulterior motives, but their own investments are likely colored by their view of the market. Meaning? They personally stand to gain if their predictions come true, and there’s a greater chance of their predictions coming true if they can convince others to join them.
I’m already out of stocks and holding cash.
This is called historical fractal analysis (a form of technical analysis) but almost never works for predictive purposes (the congruence eventually disappears). However, I do believe the market will sink to that that 50% off clearance sale one way or another.
Reminder to myself to buy lots of toilet paper before April.
Very true. A drop to 13,000 (interpolating from the chart as the bottom) would be an 18.6% drop of where we are today (15,980). Nowhere near 50% but a significant decline from today. Average market “correction” is 10%.
Yeh, but GLOOM DESPAIR AND AGONY gets more page hits than reality.I’ve learned to take any gloom-and-doom story, especially economic ones, with about ten tons of salt. Economic forecasts are like weather forecasts - a giant crap shoot.
The fed fueled gambling racket (aka: the stock market), is on the verge of going bust. And as with some European countries, bank accounts and retirement funds will be conficated, and draconian tax rates will be employed by the government to bail out the bank and business interests, again. Of course all of this will be blamed on the greedy 99%, while the 1% will walk away fom the whole mess they created clean as a whistle, all the while laughing at all of the idiots in government and the general population who fell for their bullshit plans for systematically looting the US economy. This is how soros made his fortune, and you’re an idiot if you think he couldn’t pull it off here.
Proves nothing. Predicts nothing.
If you want a better indication of what’s going to happen to the American business world, look at the team of law-breaking marxists currently collecting a salary at the White House.
Come on now, don't be confusing people with the facts. People wanna panic.
It doesn’t take a weatherman to see which way the wind is blowing...
“confiscated”? well, sort of. In the case of Greece which is the most recent relevant example, the confiscation amounted to discounting the federal bonds by upwards of 80%. First they discounted, hair cutted, the ones held by banks then they whittled their way into personal holdings. That’s the situation I fear most here-—the gummint will simply tell banks holding federal bonds to kiss off.
A Progressive Republican
followed by an Ultra-Progressive
Then as now.
I’m out of stocks and out of cash and out of precious metals and holding a Ziploc bag of random coins. LOL
Hoover:He(Hoover) had also called on the Federal Reserve Board to raise interest rates, but the board lowered them instead, thus fueling a stock market boom in the two years prior to his presidency.Hoover and the Great Depression
And if it crashes the main effect we non investors will see is that all that inflation that the FED has built into the money will start appearing big time in the prices we pay for food and everything else. The current 9% or so real price inflation will jump up.
The 1929 leg down began when it became apparent there were the votes in the Senate to ensure that Smoot-Hawley would move to reconciliation.
And Soros’s fortune will go from 20 billion to some multiple of that. He will become the most powerful man on Earth if he is not that already..
Be thankful that George Soros is past 8- and that he doesn’t live to be 105.
get money out of the banks .... market crash is one thing but bank holiday is another... what about the 200 trillion in derivatives floating around... there is no way the financial markets can handle a stock market crash today. the QE tightening has a multiple ripple effect through the system and it is not positive. why did dhs buy 1.6 billion hollow point bullets.... not for target practice...
The fed fueled gambling racket (aka: the stock market), is on the verge of going bust.
Where would the market be today without the Fed’s massive QE program? We’ll never know for sure but it certainly wouldn’t be anywhere near the level it is today.
In June 1929, the national debt was $17 billion. Interestingly, it is $17 trillion today. However, the debt to GDP ratio was only about 16% when the depression began; debt is about 100% of GDP today.
thanks for posting this.
the USA was in far better financial condition in 1929. In fact the government had no significant debt at all. Nor did the public. And such instruments of Fraud such as derivatives and MBS’s and whole works. There is a time coming soon when we may be going down for the last time.
I lost all of mine in the Great Global Warming Polar Vortex Catastrophe of ‘14. It was bad, total wipe out.
Excellent analogy. If I had paid heed to a lot of the investment articles posted here, I would have lost a lot of money.
Time fibs and absolute level fibs can be in different ranges.
In other words, the different absolute ranges over one year in itself is not misleading.
Said during an interview in Mexico and while on the grid. . .First rule about going off grid, don’t tell people where you are and don’t hold a press conference telling people where you are.
The money supply increased (in billions) from 20.8 in 1921 to 24.9 in 1925, or nearly 20%, and from 24.9 in 1925 to 26.4 in 1929, or 6%.If there is a similar deceleration of the rate of increase in the money supply now, then look out.
- a 3 year boy on TV news today : “Please Jesus make it warm!” -